Tax credits reduced by State contributory pension

[Broadcaster]

Hi, Having received our 2025 tax credit cert, I see our tax Credits are reduced by the State Contributory Pension that both my wife and I receive. This has reduced our tax credits by approximately €6k! It wasn't the case last year so has something changed that I missed. I already submit the the pensions for tax purposes each year.

Can anyone explain this change.

Many thanks

 

[Dr Strangelove]

How old are you?

 

[Broadcaster]

I'm 72 and my wife is 70

 

[ClubMan]

It might help to post details of your before and after credits and standard rate band.

 

[ClubMan]

Taxation of social welfare payments

Find out which social welfare payments are taxable, and which payments are not.

www.citizensinformation.ie

Social welfare payments are taxed by reducing your tax credits and rate band. Your non-social welfare income determines how tax due is paid.

Taxation of Department of Social Protection pensions

This page outlines how pension payments from the Department of Social Protection are taxed

www.revenue.ie

If you are a PAYE taxpayer​

We reduce the annual tax credits and rate band on your Tax Credit Certificate (TCC) to take account of the pension.

 

[Broadcaster]

Standard rate band is Rate band 1
2024 = Tax credit Self and Spouse (Personal +Employee+Age credits) = €7900 nothing on that form re State Pension
2025 = " " " = €8490 this year deduction of €6156 (State Pension)
Net credit €2334
We've made a return every year including both State and private pensions.

 

[Broadcaster]

I should add that as we have rental income, we complete a tax return each October/Nov and pay preliminary tax etc.
My wife also has a very small UK pension and we include that in our tax each year. I'm just at a loss to know why the State pension credit is only this year being displayed on the cert given we are both on State pensions for several years!

 

[ClubMan]

Standard rate band is Rate band 1
2024 = Tax credit Self and Spouse (Personal +Employee+Age credits) = €7900 nothing on that form re State Pension
2025 = " " " = €8490 this year deduction of €6156 (State Pension)
Net credit €2334
We've made a return every year including both State and private pensions.

I meant list out all credits and standard rate band figures from the respective statements of tax credits.

 

[Broadcaster]

Apologies Clubman only getting back to this now.
I've attached the relevant statements for 2024 and 2025.