Invalidity Pension & Tax

Hi all,

Does anyone have a handle on how much tax would be due for a person (age 63) getting invalidity pension and no other income? Approx €200 per week.

Also, anyone have any experience on how the Revenue is likely to handle a situation where the recipient didn't declare the pension for a considerable period of time?

thanks for any info
Sean.

While Invalidity Pension is taxable as such, tax is not deducted from the payment. If it is their only income, there will be no tax liability on it.

If they had other income for during the relevant time that they failed to declare the pension, then there could be a liability, the amount of liability will depend on how much other income was being earned and what tax band they were in. If the person was already in the higher tax band from the other earnings, then there could have been an underpayment of tax of up to 41% of the value of the pension by failing to declare it.

Thanks Ildánach, I figured as much.

I will have to get someone to go to the Revenue with the pensioner and sort out the paperwork - she won't be able to do it on her own. She got all scared after hearing gossip that someone went to jail for not declaring their pension.
thanks again
sean.

As always the advice would be go to Revenue before they come to you.

A friend who just recently realised her widow's pension (which she has been on for the past 6 years) is taxable had a very straightforward experience with revenue. She also has other income.
Following a phone call to revenue we put together a tax return for the past 6 years including the pension income, sent it off to revenue. They came back with the amount owing and a payment plan, a lump sum now plus a reduction of tax credits spread over the next 3 years. No penalties or interest. Good result