The fallout from the Irish Revenue's disclosure that thousands of pensioners
will receive an unexpected tax hit continues, with the agency forced to re-open
customer enquiry lines and facing calls for a public information campaign.
An exchange of information programme between the Revenue and the Department
of Social Protection (DSP) revealed inaccuracies in information held on DSP-issued
pensions. Around 115,000 pensioners are set to receive letters from the Revenue
detailing the error, with many told to expect greater tax deductions from their
DSP pensions in future.
If a recipient of a DSP pension has no other sources of income, they are not
liable for income tax on the DSP pension. However, if, in addition to the DSP
pension, an individual also has another source of income – for example
an occupational pension from a former employer – they may be liable to
tax on the DSP pension.
According to the Revenue, there are discrepancies between its own records and
those of the DSP which detail entitlement to various forms of state-funded pension.
It believes that, if, over time, pensioners have failed to inform the Revenue
of any changes in circumstance or payment, its records might have fallen out
of line with the amounts actually paid by the DSP.
Since the news broke on January 5, the Revenue has had to field 20,000 calls
on the matter, and it is expected that department officials will be called on
to answer questions in parliament over the coming week. The Revenue has confirmed
that its helpline will be re-opened on January 9 to deal with queries.
The Revenue came under immediate criticism from the Age Action charity, with
spokesman Eamon Timmins stressing the anger caused by the news, stating that
it may cause further hardship for many older people. The charity has now called
for the Revenue to launch a public information campaign in the coming months
to highlight steps which pensioners need to take in order to remain tax compliant.
Timmins said: “The letters have caused anger and anxiety among older people
who previously believed they were tax compliant and who had been tax compliant
all their working lives. However, this exercise by the Revenue Commissioners
has highlighted misunderstandings among older people regarding their tax obligations.”
“On the basis that the Revenue Commissioners receive accurate updates
from the Department of Social Protection about what payments an individual receives,
what other information do the Revenue Commissioners require about a person’s
circumstances, or any changes in their circumstances that occur during the year,
in order to ensure a person pays the correct amount of tax. A public information
campaign is needed to highlight these issues so that we do not have a recurrence
of this week’s events,” Timmins added.
LAWANDTAX-NEWS.COM
