Brendan Griffin
Question:206. Deputy Brendan Griffin asked the Minister for Finance his views on matters raised in correspondence (details supplied); and if he will make a statement on the matter. [45418/22]
View answerTuesday, 20 September 2022
Questions (206)
Written answers
As the Deputy is aware the pension fund levy was introduced in 2011 to support the recovery of the wider economy and was time bound in duration. For the years 2011, 2012 and 2013, the rate was 0.60% of the pension scheme assets. For the year 2014, the rate was 0.75% of the assets and for the year 2015, the final year of the levy, the rate was 0.15%. The levy went to fund the tax reductions and expenditure measures introduced in the Jobs Initiative.
The Universal Social Charge (USC) came into effect on the 1st January 2011 to replace the Income Levy and Health Levy, neither of which gave relief for pension contributions. It was a necessary measure to widen the tax base, remove poverty traps and maintain revenue to reduce the budget deficit. It is a more sustainable charge than those it replaced and is applied at a low rate on a wide base.
The USC is an annual tax payable on an individual’s total income in a year, subject to a number of exemptions and reliefs. In particular, an individual is not liable to pay USC where his or her total income in the tax year does not exceed €13,000 and individuals aged 70 and over benefit from a lower rate of USC (provided their total income does not exceed €60,000).
Pensions, other than pensions paid by the Department of Social Protection, form part of an individual’s income for USC purposes in years in which they are paid and are charged to USC.
PRSI is not payable on an individual’s income once they have reached the age of 66.
An individual may be eligible for the yearly Age Tax Credit if they are 65 years or older in the tax year, or jointly assessed or separately assessed with a partner who is 65 years or older in the tax year.
The Age Tax Credit is as follows:
|
Status |
Amount of Credit |
|
Single, widowed, surviving civil partner or singly assessed |
€245 |
|
Jointly or separately assessed |
€490 |
In addition an individual may not have to pay Income Tax if they or their spouse or civil partner are aged 65 or over, where their total income is less than, or equal to, the exemption limits.
The exemption limits are as follows:
|
Personal circumstances |
Exemption limit |
|
Single, widowed or a surviving civil partner |
€18,000 |
|
Married or in a civil partnership |
€36,000 |
For dependent children, the exemption limits are increased by €575 per child for the first two children and €830 per child for each additional child.