Caoimhghín Ó Caoláin (Cavan-Monaghan, Sinn Fein)
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Question 468: To ask the Minister for Finance the ratio of the income of the top five per cent income earners to the average income per head. [28257/06]

Brian Cowen (Laois-Offaly, Fianna Fail)
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It is assumed that the Deputy is referring to income for the purposes of income tax and that information required by the Deputy is the ratio of the average income of the top five per cent of income earners to the average income of all income earners.

I am informed by the Revenue Commissioners that the most recent basic data on incomes available from which information of the type requested by the Deputy could be derived are in respect of the income tax year 2003.

If income averages are calculated by reference to gross income, the average income for 2003 of the top five per cent of income earners is €149,238 and of all income earners is €30,804. This is a ratio of 4.8:1. The corresponding figures for average total incomes are €131,709 and €29,186 respectively, a ratio of 4.5: 1.

Gross income is income which:

is prior to deductions for capital allowances, interest paid, losses, allowable expenses, retirement annuities etc;

is after deduction of superannuation contributions by employees but not by the self-employed;

includes income of individuals whose total income falls below the exemption limits;

does not include certain other income which is not income for tax purposes or is exempt from tax such as profits or gains from stallion fees, profits from commercial forestry and certain income from patent royalties, certain investment income arising from personal injuries, child benefit, maternity benefit and unemployment assistance paid by the Department of Social, Community and Family Affairs, certain earnings of writers, composers and artists, bonus or interest paid under Instalment Savings Schemes operated by An Post, interest on certain Government securities, certain foreign pensions which are exempt from tax in the foreign paying country, portions of certain lump sums received by employees on cessation of their employment, statutory redundancy payments and certain military pensions; and

does not include or not fully include other income sources such as interest income that does not need to be declared or is not recorded (but from which tax has been deducted), unemployment benefit and disability benefit (non-recording of non-taxable amounts and of amounts taxed by restriction of repayments or indirectly through employers in the PAYE system), and the incomes of certain self-employed persons, including some farmers, as well as some individuals in receipt of pensions, who are not processed annually on tax records because their incomes are below the income tax thresholds.

The information on incomes is based on income returns on Revenue records at the time the data were compiled for analytical purposes, representing 90 per cent or more of all returns expected.

To arrive at the figures for total income the gross income is reduced by various relevant deductions and allowances such as capital allowances, losses, allowable expenses and retirement annuities.

A married couple who has elected or has been deemed to have elected for joint assessment is counted as one tax unit.