James Bannon (Longford-Westmeath, Fine Gael)
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Question 190: To ask the Minister for Finance if old age pensioners are exempt from DIRT tax on their savings; if not, the reason for same; and if he will make a statement on the matter. [22694/08]

Brian Lenihan Jnr (Dublin West, Fianna Fail)
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I am advised by the Revenue Commissioners that since April 2007, individuals are exempt from DIRT on their savings income provided they or their spouse are aged 65 or over and their total income in a year (including the savings income) is below the annual exemption limit — currently €20,000 in the case of a single person and €40,000 in the case of a married couple. These exemption limits are increased where the individual has one or more dependent children.

In order to claim the exemption, the person must make a declaration (on Form DE 1) to the financial institution where the account is held, to the effect that either they or their spouse are aged 65 years or over during the year, and that their total annual income does not exceed the exemption limit. Where a person makes such a declaration, the financial institution will pay any interest accruing on the relevant account without deduction of DIRT. Should the individual's circumstances change following the submission of this declaration form, they are required to notify the financial institution to that effect.

Where a person's income marginally exceeds the relevant exemption limit, he or she will not be entitled to the exemption but may be entitled to a partial refund of the tax deducted.

Prior to April 2007, there was no direct exemption from DIRT on savings income beneficially owned by persons aged 65 and over. However, in cases where the individual or his/her spouse was aged 65 or over and their income was less than the exemption limit, he or she could apply to Revenue for a refund of the DIRT they had paid.