asked the Minister for Finance if he will consider as a matter of urgency exempting old age pensioners from PAYE on their superannuation pensions.
Ceisteanna—Questions. Oral Answers. - Old Age Pensioners Tax Exemption.
120.
Mr. Kenny
I assume that the Deputy is referring to the tax liability of persons in receipt of a contributory old age pension and also a pension under an occupational scheme operated by their former employer.
In principle all pensions are treated for income tax purposes as earned income but, of course, they qualify for the normal income tax allowances and reliefs including the additional allowances granted to persons aged 65 years and over. Full relief from income tax is granted in respect of contributions towards Social Welfare Act pensions and pensions under superannuation schemes approved by the Revenue Commissioners. In addition, superannuation funds of approved retirement benefits schemes enjoy generous tax relief. For instance, income arising to the funds in respect of its investments and deposits which are held for the purposes of the schemes is exempt from tax.
Taxation changes are a matter for consideration in the light of the budgetary situation and the Deputy will appreciate that I cannot at this stage indicate what my next budget may or may not contain.
Will the Parliamentary Secretary say whether he is aware that it is a source of embarrassment to the Government that the old age pensioners are taxed?
That is a separate question.
Mr. Kenny
It is a separate question but if the Deputy asks it next week he will receive the reply.