asked the Minister for Finance if, in view of the fact that the recent increases in social welfare contributions have resulted in workers being liable to higher income tax payments on the part of the contribution which is liable to income tax, and that the increase in contribution is thereby made greater for these workers, he will take steps either to increase the fraction of the contribution which is tax-free or to eliminate the payment of income tax on these contributions altogether.
Ceisteanna—Questions. Oral Answers. - Income Tax: Social Welfare Contributions.
6.
The statement on which the first part of the Deputy's question is based, namely, that the recent increases in social welfare contributions have resulted in workers being liable to higher income tax payments on the part of the contribution which is liable to income tax, is not correct. Accordingly the second part of the question does not arise. Social insurance contributions are taken into account in computing income tax liability in so far as they are related to widow's (contributory) pension, orphan's (contributory) allowance and old age (contributory) pension. Under section 10 of the Finance Act, 1961, so much of an employee's contribution as is referable to these benefits is allowable as a deduction in computing income for income tax purposes. As a consequence of the recent increase in social insurance contributions, enhanced deductions have been allowed for income tax purposes with effect from 3rd January, 1966. For example, in the case of an ordinary male employee, the annual amount of the contribution deductible has been increased from £8 to £10 and, in the case of an ordinary female employee, from £7 to £8. Corresponding increases have been allowed to other categories of contributors.
Is the Minister aware that these adjustments have not yet been made?
I am not aware that they have not become effective, even though they have been made.
I have seen many of these cases where the workers were not getting the proper amount.
I am sure the appropriate adjustments will be made.
In fact they have not been adjusted even in the case of State employees.
I shall make inquiries about that.