John V. Farrelly
Ceist:61 Mr. Farrelly asked the Minister for Finance the reason a person (details supplied) in County Meath is being deducted PRSI and PAYE on her pension; and whether she is entitled to a rebate.
Written Answers. - Pension Deductions.
I have been advised by the Revenue Commissioners that the taxpayer has a social welfare pension and a pension from Meath County Council. Both pensions are taxable.
However, as the taxpayer's income does not greatly exceed the exemption limit for tax purposes she is entitled to marginal relief. Marginal relief operates to ensure that the tax payable in respect of the taxpayer's total income is no more than 52 per cent of the excess of her total income over the exemption limit. In every case in which it applies, it is more favourable to the taxpayer than taxation under the normal system of applying the standard rate to her taxable income, that is income less personal allowances and reliefs. Though the rate of tax is higher, it is still more favourable because the amount of income to which it applies is considerably less.
An amended certificate of tax-free allowances which entitles the taxpayer to this marginal relief was issued on 17 May 1991 granting net tax-free allowances of £1,053 for the current year at tax table C (52 per cent.) Any tax overdeducted will be refunded by Meath County Council on operation of this certificate.
The Inspector of Taxes has reviewed her liability for the tax years 1989-90 and 1990-91. She was also entitled to marginal relief for these years. As overpayments of £15.90 for 1989-90 and £213.28 for 1990-91 have arisen, cheques for these amounts will issue to her within the next ten days.
The county council have confirmed that PRSI is not being deducted by them, as the taxpayer is not liable to PRSI.