Dáil Éireann díospóireacht -
Wednesday, 26 Jan 2000

Vol. 513 No. 1

Written Answers. - Disability Support Service.

John Perry

Ceist:

367 Mr. Perry asked the Minister for Finance if his attention has been drawn to the income tax situation of persons (details supplied) who participated on a training programme and secured placement on a part-time basis with a company where they are allowed to go on a scheme earning a maximum of £50 per week without effecting their disability allowance; if his attention has further been drawn to the fact that they are liable for income tax on earnings over £100 and that their disability allowance is classified as income; the plans, if any, he has to redress this problem; and if he will make a statement on the matter. [1955/00]

Minister for Finance (Mr. McCreevy):

Disability allowance is a non-taxable allowance. However, an individual in receipt of disability allowance is liable to income tax on other income, including income derived from rehabilitation part-time work. Tax is computed in the normal manner and the individual will have entitlement to the normal tax free allowances.

Where the other earnings of an individual in receipt of disability allowance exceed £50 per week, it is regarded as an employment for pay related social insurance contributions, PRSI, purposes. The normal contribution rules apply, as follows: the employer pays a contribution based on the total income, and the employee pays a contribution based on the total income. However, the first £100 of income is exempt from the pay related social insurance contribution.

The Deputy provided details in respect of three individuals. I am informed by the Revenue Commissioners that disability allowance was incorrectly taken into account when computing the taxable income of one of these individuals. The position has now been rectified and an amended certificate of tax-free allowances will issue to the taxpayer shortly.