asked the Minister for Finance if he has any plans, in the context of the next budget, to reduce or remove altogether income tax assessment on social welfare and other pensions.
Ceisteanna—Questions. Oral Answers. - Income Tax Assessment on Pensions.
8.
Because of the operation of the personal reliefs and age allowances, an old age pensioner is not at present liable to tax unless the total income exceeds £1,000 in the case of a single person and £1,910 in the case of a married man.
Alteration of any of the income tax reliefs or allowances is a budgetary matter. It would not be appropriate at this time to give any indication of what proposals the next budget statement might or might not contain which would affect the position of old age pensioners in the matter of income tax.
Will not the Minister agree that it would be a welcome gesture if the portion of the income that constitutes a pension be exempted? The people concerned are old and have given a lifetime of service to the State.
As I have indicated, the limits were increased this year, far in excess of any increases given in the past. It would be true to say that most pensioners are not liable for tax, but on the proposition of exempting such portion of pension as exceeds those limits where that arises, the difficulty is that one is then giving special relief to those who are better off rather than to people who are not as well off. The basic principle of income tax should be related to income. The Deputy may know of cases where people are in receipt of pensions and are also in receipt of other incomes that put them in a high income bracket. I do not think there is any case for exempting such people from tax.
I am not asking the Minister to exempt them from tax but only to exempt the pension part which is only a small share of their income. The Minister spoke about generous increases. Will he not agree that there was no increase for those people in October this year, as was customary in the past few years under the former Government?
The Deputy is now referring to social welfare increases. The vast majority of people in receipt of social welfare pensions are not paying tax, but since the Deputy raised the question may I point out to him that the increases when they were granted in October were granted for two reasons: first, the rate of inflation was enormously high, about three times what it is today and, secondly, it was a method by the then Government of saving money.
In the context of tax concessions to many other sections of the community, does the Minister consider it socially just that an old age pensioner is liable for income tax on any earnings or income in excess of £19 per week? This is the situation with regard to single old age pensioners. Does the Minister consider that is an adequate allowance in any circumstances?
All I can say in that regard is that the allowance is vastly greater than it was when Deputy Desmond had more of a say in what happened than he has now.
In view of the major concessions given to many sections of the community in the past 12 months totalling tens of millions of pounds, can the Minister find any justification for continuing a situation where a person in this country with a single pension who lives alone and who earns more than £19 a week is liable to payment of income tax?
I have allowed a considerable number of supplementary questions on this matter. I am calling Question No. 9.