How much do people aged 66 or over pay in income tax?

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Brendan Burgess

Brendan Burgess

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A married couple where one is aged 66, has an exemption from income tax if their income is below €36,000

|Age <65|Age 65|Age 66
Income|€36,000|€36,000 |€36,000
tax|€2,250|0|0
PRSI|€1,440|€1,440|0
USC|€1,839|€1,839|€1,839
Total|€5,529|€3,279|€1,839
Effective Tax Rate|15%|9%|5%

This example is based on a married couple with a single income.

A married couple where both are working, who earn €36,000 would have an additional credit of €1,650 so they would pay only €600 tax if under 65.
 
Hi , another set of figures:
Income: 44,000
Tax : 7410
USC: 1586
Total; 8996
% Tax 20%

Ded PSP 1950

Tot ded: 10,946

Age 69 widowed.
 
How does that compare with a person / a couple bringing in similar incomes ?

I suspect the above comparisons may be significantly more generous than those for similar income households below retirement age, which seems wrong given the difficult economic times our country is in.

If anything, there is more justification than ever for stricter means testing before granting concessions and possibly heavier taxing of the older generation.
 
My parents earn approx 900pw and pay 5-8% income tax/USC.

This is an unbelievably low income tax rate.

Taxes on over 65s are too low, compared to the many benefits that they get.

Two med cards
Travel passes
Free TV licence
Subsidised water charges and elec

State pension not touched, Child Benefit cut three times

Small cuts to PS pensions, larger cuts to PS pay.

This is an intergenerational conflict, and families with young children have lost.
 
Protocol said:
...
Taxes on over 65s are too low, compared to the many benefits that they get.
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This household pays taxes at the same rates as under 65s pay.
Two med cards
Travel passes
Free TV licence
Subsidised water charges and elec
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Really? How do we get all these goodies? All I have got so far is a travel pass, which I use just occasionally.
 
Protocol said:
This is an unbelievably low income tax rate.

Taxes on over 65s are too low, compared to the many benefits that they get.
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Hi Protocol

This is probably a much more key issue than the one I have raised which is just the very generous tax treatment.
 
Over 65s pay less income taxes in several ways:

(1) the income tax exemption of 18k single / 36k married.

This exemption only applies to those over 65.


(2) the Age tax credit for people aged 65+ of 245 single / 490 married

(3) exempt from 41% DIRT on deposit interest if income less than 18k single / 36k married

(4) lower USC rates
 
Padraigb said:
This household pays taxes at the same rates as under 65s pay.

Really? How do we get all these goodies? All I have got so far is a travel pass, which I use just occasionally.
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As I outlined above, my parents pay less income taxes than people <65 on the same income.

They receive the HBP Household Benefits Package - free TV licence, cheaper elec, and will get 100 off water charges.

They also have travel passes and 2 med cards.

Indeed, when my father was in FT employment aged 62, and earning 70k, he received all the above benefits.

At that time, he was paying 5k tax on the 70k as he made large AVCs.

I would guess, between age 60 and 70, he will earn 500,000 and pay max 50,000 in tax/USC/PRSI.

I must actually check the figures sometime.
 
Interesting threads;

It suggests that the 65+ are getting away with a lot.Maybe they are .

So between the lines I read a roll back of some of the (goodies) pensioners have.

Brilliant ! . Because as all the posters approach Pension time they can look forward to having voted less for themselves.

Wonderful !

ps ; I am biased as I am 62.
 
Protocol said:
As I outlined above, my parents pay less income taxes than people <65 on the same income.

They receive the HBP Household Benefits Package - free TV licence, cheaper elec, and will get 100 off water charges.

They also have travel passes and 2 med cards.

Indeed, when my father was in FT employment aged 62, and earning 70k, he received all the above benefits. How could a 62yo in full-time employment on 70k have a free travel pass?
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My parents are over 65/70 and are typical members of that subset, with a comfortable lifestyle. It is fair to say that they are financially better off now in their golden years than at any stage in their younger days, with no mortgage now and an income of circa 1k per week.

If the free tv licence of €160 was ended or the €35 per month free electricity allowance, they would be annoyed, but they could easily afford these bills.
 
Protocol; How could a 62 yr old in FT employment on 70k have travel passes, med cards etc. ?

The conditions for receiving Household Benefit P between 65 to 70 are that you be living alone and in receipt of certain SW payments.

Medical cards as we know are means tested. I cannot understand how in earning 70k a person is granted a medical card. Unless it was on medical need ...but this person was in FT employment ?

Like Padraigb I got travel pass at 65 but nothing else, as family members were living at home then. Never was entitled, and still not, and will not, to medical card with income far below 70k.

There are many variables in this area of over 65s tax: income, marital status, SW payments, dependents, mortgage, high rental payments etc. Not every over 65 owns their own home mortgage /rental free and many have children still in college.

But even considering the above variables, the tax rate payable is the same 20% or 41% depending on income.
 
I don't begrudge any of the older people anything they get. Neither do I begrudge them if they pay less in tax percentages, nor getting travel pass, med cards, etc, etc, etc. We have become a bewildering type of nasty people who don't want anyone else having/getting something we don't get ourselves. The old people deserve every privelage they get, long may it continue. I'm guessing you'll go for the public servants next because they're working and earning, even though most of them are struggling like everyone else. Oh, I forgot, they earn too much. Grow up people, these older citizens are taking care of far more than they should be. Making sure they're comfortable is what we should be doing, not this bloody begrudgery we're becoming famous for.
 
One spouse >70, one spouse 62.

So HBP was awarded. mED card details, see below:


QUOTE BELOW

To qualify for a medical card your weekly income must be below a certain figure. Here we explain the means test for those who are aged over 70. See also other information about the medical card and how to apply.

There are different means test rules for those under 70 years of age.

The assessment of a couple for medical card purposes is based on the age of the older person.

Income, savings, investments and some property are taken into account in the means test. However, there are certain exceptions.

According to the HSE's guidelines, if your income is derived solely from social welfare allowances or benefits or HSE allowances, you should be granted a medical card even though your payment may be in excess of the income guidelines for your age and situation.

If your income is above the limits for a medical card you will get a GP Visit Card if your weekly income is not over €700 (single person) or €1,400 (married or cohabiting couple). You can also apply for the Drugs Payment Scheme.

There are some categories of people exempt from the means test, including people entitled to a medical card under EU Regulations.
 
noproblem said:
I don't begrudge any of the older people anything they get. Neither do I begrudge them if they pay less in tax percentages, nor getting travel pass, med cards, etc, etc, etc. We have become a bewildering type of nasty people who don't want anyone else having/getting something we don't get ourselves. The old people deserve every privelage they get, long may it continue. I'm guessing you'll go for the public servants next because they're working and earning, even though most of them are struggling like everyone else. Oh, I forgot, they earn too much. Grow up people, these older citizens are taking care of far more than they should be. Making sure they're comfortable is what we should be doing, not this bloody begrudgery we're becoming famous for.
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As a society where many people have experienced wage cuts, tax increases and welfare cuts, we can't afford to leave one group relatively well protected.

Now I don't mean somebody receiving a COAP just, i.e with 230pw income.

I mean that pensioners on 500-1000 + per week have been protected from much of the fiscal contraction during the past six years.

I would love to be able to afford this, but we can't.

Yes, they did pay 12-15% interest rates during hard times in 1980-1990, that's true.

But with still massive fiscal deficit of 5bn+, we can't afford to charge really, really low taxes on people aged 65+ earning 40-50k+, while at the same time giving them so much social benefits.
 
noproblem said:
We have become a bewildering type of nasty people who don't want anyone else having/getting something we don't get ourselves. The old people deserve every privelage they get, long may it continue.
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It's not nasty to try to spread the pain of fiscal adjustment across the entire population.

We can't afford to give some groups "privileges".

This is the size of our fiscal deficits:

2012 = 13.4 bn
2013 = 11.8 bn
2014 est = 7 bn
2015 est = 5bn

We are borrowing billions, which future generations must repay, while my parents pay 5-8% income tax on 900pw.

Lunacy.
 
Protocol said:
But with still massive fiscal deficit of 5bn+, we can't afford to charge really, really low taxes on people aged 65+ earning 40-50k+, while at the same time giving them so much social benefits.
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The social benefits have been pared back in recent years. The HBP is basic enough, with an annual free TV licence worth €160 and a monthly gas/electric allowance of €35.

From Jan 1st 2014 a married couple with 1 > 70 years old with weekly income > €900pw no longer qualifies for a medical card. Over 70 and over €46,800 pa = no medical card.

Public transport is not overburdened with elderly citizens using their free travel. A lot of elderly never use their free travel passes.
 
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