I have been advised by the Revenue Commissioners that the taxpayer is in receipt of two pensions, a social welfare contributory pension and an occupational pension in respect of her late husband's employment in Coillte Teoranta. Both pensions are taxable. There has been no reduction in either pension and in fact the social welfare pension will be increased in July.
The social welfare pension is paid gross, i.e., without deduction of tax, and the tax attributable to it is collected by reducing the taxpayer's tax-free allowances against her occupational pension. The increase in the social welfare pension will result in an increased tax liability for 1991-92. Accordingly, the tax-free allowances against the taxpayer's occupational pension have been reduced, in order to collect the increased liability in a manner evenly spread throughout the tax year. As a result, the net, i.e., after-tax occupational pension received by her has been reduced. The taxpayer is being correctly taxed on the occupational pension in excess of £209 per annum, i.e., £17.41 per month.