Tax on Pensions

[roker]

I have 4 small pensions including state pensions.
I don't understand the document from the tax office, but after 15yrs of retirement this is the first time I have to pay tax because I am over €36,000 for myself and wife this never changed for many years but the pensions have incremented over the year plus the extras given from the government on cost of living.
I'm sure I'm not the only one, should we not be making a case to increase the tax allowance

 

[Farma1]

What do you think the allowance should be and who else should be paying the tax rises to for you to keep all the other benefits you have - the cost of which to to the state is increasing massively (healthcare, subsidised travel, household benefits package etc)

36k for an 80 year old couple (assuming your wife same age 'ish) sounds a reasonable amount to me before some basic rate tax starts to contribute to society? Your tax will be small at 20%.

 

[azerty]

36k is for a couple, 18 k for a single person.
Workers on 18k would also pay very little.
Actually a lot of younger household do not pay tax if we consider the support they received.

 

[Steven Barrett]

I have 4 small pensions including state pensions.
I don't understand the document from the tax office, but after 15yrs of retirement this is the first time I have to pay tax because I am over €36,000 for myself and wife this never changed for many years but the pensions have incremented over the year plus the extras given from the government on cost of living.
I'm sure I'm not the only one, should we not be making a case to increase the tax allowance

You pay no USC on the State pension and get an additional €490 tax credit when you are over 65. Do you not think that is enough?

Retirees are the best looked after demographic in the country. If you get increased tax credits, how is it going to be paid for? We either reduce services, but not the HSE, which old people use the most, or other services which younger people use. Or else you tax working people more when there is a cost of living crises.

 

[roker]

You pay no USC on the State pension and get an additional €490 tax credit when you are over 65. Do you not think that is enough?

Retirees are the best looked after demographic in the country. If you get increased tax credits, how is it going to be paid for? We either reduce services, but not the HSE, which old people use the most, or other services which younger people use. Or else you tax working people more when there is a cost of living crises.

I didn't want a political speech, I am merely pointing that the allowance hasn't kept track of inflation and back to the status quo

 

[Marsupial]

I have 4 small pensions including state pensions.
I don't understand the document from the tax office, but after 15yrs of retirement this is the first time I have to pay tax because I am over €36,000 for myself and wife this never changed for many years but the pensions have incremented over the year plus the extras given from the government on cost of living.
I'm sure I'm not the only one, should we not be making a case to increase the tax allowance

You are free to make such a case should you wish.

However, as an over 65 year old, I feel fortunate to have an age tax credit that I never looked for, don't need and don't feel can be justified.

But then I'm one of those sad old people who don't feel that the world owes them a living.

 

[ClubMan]

Marginal relief may also be relevant in this case.

Marginal relief

This page explains marginal relief

www.revenue.ie

 

[Farma1]

should we not be making a case to increase the tax allowance

Apologies OP, Steve and I read this as you asking a question as to whether this forum believes you should be making a case to increase the tax allowance. If you were merely pointing out that the allowance (like many others) hasn't moved fully with inflation then yes that would be correct.

 

[ClubMan]

Apologies OP, Steve and I read this as you asking a question as to whether this forum believes you should be making a case to increase the tax allowance. If you were merely pointing out that the allowance (like many others) hasn't moved fully with inflation then yes that would be correct.

So, nothing to do with pensions specifically in spite of the thread title?

 

[Steven Barrett]

I didn't want a political speech, I am merely pointing that the allowance hasn't kept track of inflation and back to the status quo

It's not supposed to keep in line with inflation.

And we all know that once you give it, you can't take it back. So giving a 10% increase in tax credits will be permanent, even if inflation goes back to 2%.

 

[T McGibney]

It's not supposed to keep in line with inflation.

It really should though. And it's taken for granted in Britain for example that they should.

And we all know that once you give it, you can't take it back. So giving a 10% increase in tax credits will be permanent, even if inflation goes back to 2%.

Unless there's actual deflation, war or 2008-type existential crisis, there should never be a need to take anything back.

If inflation is 10% this year it should increase by 10%
If inflation falls to 2% this year it should then increase by a further 2%.

This isn't even hard but we've collectively forgotten that government should serve and work for the people, not the other way around.

 

[Steven Barrett]

It really should though. And it's taken for granted in Britain for example that they should.

Unless there's actual deflation, war or 2008-type existential crisis, there should never be a need to take anything back.

If inflation is 10% this year it should increase by 10%
If inflation falls to 2% this year it should then increase by a further 2%.

This isn't even hard but we've collectively forgotten that government should serve and work for the people, not the other way around.

In the UK, the triple lock is on the State pension. The OP wants his tax credits adjusted so he doesn't have to pay any tax.

And the triple lock was suspended in 2022 and will probably be suspended this year too. It has also been called unsustainable by the IFS because it puts an even higher burden on workers.

 

[T McGibney]

In the UK, the triple lock is on the State pension. The OP wants his tax credits adjusted so he doesn't have to pay any tax.

And the triple lock was suspended in 2022 and will probably be suspended this year too. It has also been called unsustainable by the IFS because it puts an even higher burden on workers.

The triple lock is a different issue altogether, and a matter of social welfare provision, not tax policy. The UK political and personal finance media are occasionally agog when the Chancellor refuses or fails to index link a tax band, credit or allowance. That sort of dismay is almost non-existent here.

 

[Silversurfer]

You pay no USC on the State pension and get an additional €490 tax credit when you are over 65. Do you not think that is enough?

Retirees are the best looked after demographic in the country. If you get increased tax credits, how is it going to be paid for? We either reduce services, but not the HSE, which old people use the most, or other services which younger people use. Or else you tax working people more when there is a cost of living crises.

Do you really think that retirees use the HSE the most? What about free GP care for children? That seems to have increased by age each year.

 

[ClubMan]

Do you really think that retirees use the HSE the most? What about free GP care for children? That seems to have increased by age each year.

Google the 2019 Oireachtas document titled "The Effect of Changing Demographics on Irish Health Expenditure".

On average, people in older age groups consume more healthcare than younger adults. Therefore, if the number of people in older age groups increases, it is expected that healthcare expenditure will increase also, as the amount of healthcare being demanded has increased.

 

[T McGibney]

Do you really think that retirees use the HSE the most? What about free GP care for children? That seems to have increased by age each year.

There's also an oft-repeated saying that the median person consumes 50% of their lifetime healthcare in their final year of life. I have no link or evidence to prove or disprove it but it certainly has rung true in the past in relation to some of my deceased relatives.

 

[Farma1]

Do you really think that retirees use the HSE the most? What about free GP care for children? That seems to have increased by age each year.

Very strange question that. Every single part of the health budget from GP budgets, to medicines bills, to days spent in hospital is significantly higher once you pass retirement age and naturally will be - we are living far longer with long term conditions that require treatment than ever before. No-one begrudges that and I hope it still there when I need it!

 

[Marsupial]

This isn't even hard but we've collectively forgotten that government should serve and work for the people, not the other way around.

And if we all vote for populist parties then soon enough we'll all be drowned in freebies - all paid for by the other guy.

 

[T McGibney]

And if we all vote for populist parties then soon enough we'll all be drowned in freebies - all paid for by the other guy.

Well if populism means not having 33% tax bills on foot of exempt thresholds that have either in the case of CGT been frozen for 20 years or have actually been cut substantially in the past 20 years, at a time when the exchequer has so much money it's struggling to find fripperies on which to spend it, bring it on.

 

[Silversurfer]

Google the 2019 Oireachtas document titled "The Effect of Changing Demographics on Irish Health Expenditure".

The current child dependancy ratio who are aged 15 and younger is 31.4
The aged dependency ratio of adults who are 65 and older is 17.2