Thursday, 23 January 2014
Property Taxation Collection
The Minister of State will be aware the closing date for every householder to indicate how he or she intended to pay his or her local property tax was 29 November last. People who wanted to pay their local property tax through their social welfare payments indicated that online and the system accepted that it would be deducted from a widow's contributory pension.
However, three weeks into the new year and approximately eight weeks since the closing date, widows received a letter from the Revenue Commissioner telling them that as long as they were in receipt of the widow's contributory pension, deduction at source was not an option for them. They were asked to go online again and choose any other method of payment other than deduction at source but the local property tax cannot be deducted from their widow's pension, from their wages if they are working or from a private pension.
I cannot understand why it took eight weeks to notify these people or why the local property tax cannot be deducted from the widow's contributory pension. The Minister for Social Protection told us the local property tax could be deducted from social welfare payments. I tried to include jobseeker's benefit in the list of options but the Minister said that was not possible because it was a short-term payment. The widow's contributory pension could not be considered a short-term payment. I am dealing with a number of people, one of whom is in her late 80s so she is unlikely to change her status at this stage of her life. I await the reply from the Minister of State.
I am taking this Adjournment debate on behalf of the Minister for Social Protection, Deputy Burton, who apologises to the Senator for being unable to take it herself as she is at a committee meeting dealing with the Estimates. The Senator will be aware that the local property tax legislation allows for a person who is liable for the local property tax and who is in receipt of certain social protection payments to have local property tax deducted from his or her payments.
The Revenue Commissioners have agreed with the Department of Social Protection on a facility for the deduction at source of this tax from a large number of schemes. This includes the widow's, widower's and surviving civil partner's contributory pension. Deduction of the local property tax, LPT, from Department of Social Protection payments commenced in July 2013. With effect from 17 January 2014, 19,770 customers are having deductions for local property tax from their payments under social protection schemes. I can advise the Senator that 4,283 of those are on a widow's, widower's or surviving civil partner's contributory pension. To maintain statutory minimum income and to ensure a customer is left with enough resources to live on, the Finance (Local Property Tax) Act 2012 provides that deductions from social welfare payments in respect of the local property tax will not breach the statutory minimum income guarantee as set out in the Social Welfare Consolidation Act 2005. That rate is currently set at €186 per week. The maximum personal rate of pension for someone under age 66 on a widow's, widower's or surviving civil partner's (contributory) pension is currently €193.50: thus only €7.50 per week can legally be taken from this payment in order not to bring the recipient below the basic social assistance personal rate of €186 per week. That appears to be the issue.
For those aged 66 and above with a maximum pension of €230.30 per week, the total amount that can be deducted is €44.30. This amount is calculated after a deduction is made for recovery of any existing court orders or social protection overpayments and is based on the primary personal rate only. Secondary payments, which cover specific benefits, are not taken into account in determining whether a claimant's scheme payment is greater or less than €186 per week.
There were 16 additional requests for deductions from this particular scheme which were not implemented as to do so would have the customer's welfare payment below the basic social assistance rate. In these cases the customer would have been advised by the Revenue Commissioners to choose another method of payment. I would like to assure the Senator that the Revenue Commissioners have advised that no penalties will be applied to those who signed up for the deduction at source facility from their social welfare payments and where the deduction was not accepted. However, a penalty may apply if an alternative payment arrangement is not made by the customer. The Minister for Social Protection appreciates the convenience for social welfare recipients of having the deduction facility in place, but her overriding obligation is to have safeguards which ensure a customer is not left without sufficient income. The Minister is reviewing the implications of allowing customers to have deductions made on a voluntary basis from their welfare payment which has the effect of bringing their payment below the basic rate in some clearly defined instances.
I acknowledge the presence in the Gallery of the delegation from the cross-Border body in Northern Ireland. I welcome them to the Chamber.
This is a complex area, however, with intertwined policy and legal implications, and it requires careful consideration before any final decision is made in this regard.
I thank the Minister of State Deputy Perry for being present but it is a pity the Minister for Social Protection, Deputy Burton, was not present because I would have appreciated the opportunity to discuss this issue in more detail with her.
Yes, but if a person must have a basic income of €186, how can the local property tax be deducted at source as very few people are in receipt of payments at a higher rate? I do not understand the reason it cannot be done.
Let me clarify, did the Minister of State say that only 16 in Ireland-----
I apologise. I thought the Minister of State had said this facility had been disallowed in the case of 16 widows in total, which is a very small number to be disallowed. The point I was about to make is that all these widows must be in my constituency. The number of people who have come to me would almost add up to that number.
I think this is an issue that needs further discussion. In one of the cases I am dealing with, a widow who is in receipt of payments for her three children, so her payment is above €186 per week, has chosen to pay her property tax from the widow's pension. We should be glad when people are willing to pay their property tax. We should make it as convenient as possible for them and not put obstacles in their way to pay the property tax. It is three weeks into the new year and these social welfare customers cannot have their property tax deducted at source.
In the speech that was circulated, the Minister of State did not refer to any other payments. I brought this to the attention of the Minister for Social Protection because people have come to me to deal with the matter. There are people on other social welfare payments who are encountering the same problem, but there is no reference to them in this reply. I am not happy with the reply. I know the Minister of State said the Minister is considering it but she will not have it done in time for this year.
I called for a debate on the issue but was advised by the Leader to table an Adjournment matter. I am not quite happy with the reply and I reiterate my call for the Minister for Social Protection to come to this Chamber for a debate on the issue. I know this is not part of the portfolio of the Minister of State, Deputy Perry, but I thank him for coming to the House to take the Adjournment debate.
I may be able to allay some of the Senator's concerns. At present, ten payments are included: the contributory State pension, the non-contributory State pension, the widow's, widower's or serving civil partner's contributory pension, the widow's, widower's or serving civil partner's non-contributory pension, the disability allowance, the carer's allowance, the one-parent family payment, the invalidity pension, the State pension transition and the blind pension. Deductions from social protection payments for local property tax are made in accordance with instructions received from the Revenue Commissioners. The final point is that deductions for local property tax from social protection payments commenced in July 2013 and as of the week ending 17 January 2014, some 19,000 weekly deductions at source are being made for local property tax, giving a total of almost €110,000 per week in comparison with the year ending 12 July 2013. Of the 19,000 people who have deductions made from their social protection payment, 4,000 are in receipt of widow's, widower's or surviving civil partner's contributory pension. The Department was unable to make deductions for a further 16 customers who requested to have deductions made from their widow's, widower's or surviving civil partner's contributory pension as their weekly personal payment was below the personal rate of supplementary allowance of €186 per week. The person whose case Senator Moloney raises must be on an income of less than €186 per week.
She certainly is not. I know the Minister of State is reading a reply from another Department and he referred to disability allowance. The disability allowance is €188 per week and if one can deduct property tax from that, it will take the payment under €186.