Vol. 490 No. 6
54 Mr. Higgins (Dublin West) asked the Minister for Finance the basis on which the Revenue Commissioners increased the tax against a person (details supplied) in receipt of invalidity pension and an Irish Life pension in view of the fact that no increase in income has occurred. [10861/98]
The taxpayer's Irish Life pension and the invalidity pension which he receives from the Department of Social, Community and Family Affairs are taxable. However, the invalidity pension is paid without tax being deducted and, in order to collect the tax due on the invalidity pension, it is necessary to reduce the taxpayer's tax-free allowances by an amount equal to the invalidity pension he receives.
The taxpayer will receive a weekly increase of £6.30 in his invalidity pension with effect from 5 June 1998. The inspector of taxes has calculated that the total amount of invalidity pension to be paid to the taxpayer in the current tax year, 1998-99, will be £7,004. This amount must be taken into consideration in calculating the taxpayer's tax-free allowances to avoid an underpayment of tax arising at the end of the tax year.
