Dáil Éireann Debate, Tuesday - 5 March 2019
141. Deputy Jackie Cahill asked the Minister for Finance the way in which a contributory old age pension is treated for taxation for a person that is paying class S PRSI; and if he will make a statement on the matter. [10404/19]
View answerAs the Deputy will be aware, for individuals to qualify for the Contributory State Pension they must be over the age of 66. If an individual is over the age of 66, they are exempt from paying PRSI on their income.
However, in relation to the tax treatment of the State Contributory Pension and the taxation of self-employed persons in the context of the question asked by the Deputy, I am advised by Revenue that the position is as follows.
The State Contributory Pension is chargeable to income tax under Schedule E by virtue of section 19 of the Taxes Consolidation Act 1997. The Department of Employment Affairs and Social Protection advise Revenue of individuals who are in receipt of the State Contributory Pension and the amount of the pension paid. Where Revenue has this information, it will automatically show on the individual’s pre-populated income tax return.
Generally, individuals who are self-employed, and under the age of 66, pay Class S PRSI. Self-employed individuals are required to file an annual income tax return. The annual income tax return must be filed no later than 31 October following the end of the tax year in the case of those taxpayers who file a paper return and not later than mid-November following the end of the tax year in the case of those taxpayers who file their return using Revenue’s Online Service (ROS). Details of any taxable payments received from the Department of Employment Affairs and Social Protection should be either included or confirmed on the annual income tax return. Any tax due in respect of such payments is payable at the same time as the annual tax return is required to be made.
