Following clarification received from the Deputy’s office, I understand that the question relates to the issue of increasing the age exemption limits.
A person aged 65 and over is fully exempt from income tax where his or her total income from all sources is less than the relevant exemption limit. For 2019, the exemption limits are €36,000 for a married couple or civil partners and €18,000 for a single individual. Where an individual exceeds the exemption limit, he or she is liable to tax based on the normal system of rate bands and tax credits, subject to marginal relief where relevant.
These other supports for the over 65s may apply depending on the personal circumstances of the individual. They include the Age Tax Credit which is available to all individuals aged 65 or over who do not qualify for an exemption from income tax. This credit is currently set at €245 for single individuals or €490 for a married couple or civil partners.
Reduced rates of Universal Social Charge apply for those aged over 70 with total annual income of less than €60,000. Furthermore, there is no charge to PRSI (Pay Related Social Insurance) for those aged over 66.
The State Contributory Pension and the State Non-Contributory Pension are not chargeable to Universal Social Charge (USC) or Pay Related Social Insurance (PRSI).
The purpose behind the age exemption limits is to strike the appropriate balance between ensuring that those who are in receipt of income pay some tax and contribute to the Exchequer, against the need to safeguard against poverty in retirement.
I am satisfied that the current limits are appropriate and represent the appropriate use of limited resources, taking account of the various other State supports for the over 65s. In 2016, this measure benefitted 74,400 taxpayer units and I understand that there is no evidence to indicate that the current exemption limits are causing any undue financial hardships for those over 65.
However, I am conscious of the significant contribution made by individuals generally to the rebalancing of the public finances, and of the challenges that individuals continue to face notwithstanding the improving economic conditions.
It is expected that continued progress in this area will also be made in the context of limited resources available in Budget 2020 balanced against all of the competing demands.