Ciarán Lynch (Cork South Central, Labour)
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Question 189: To ask the Minister for Finance his views on an alternative to the collection and refund of the 1% levy in cases in which it is obvious from the outset that the individual or the couple concerned have no prospect of reaching or breaching the income limit; his further views on exceptions when the deduction of the levy is a cause of anxiety and distress to persons who will in fact have no liability ultimately; and if he will make a statement on the matter. [11193/09]

Brian Lenihan Jnr (Dublin West, Fianna Fail)
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The income levy is deducted on any payments of income made on or after 1 January 2009. The income levy legislation provides for a refund after the end of the year where there has been an over-deduction of levy.

On an administrative basis the Revenue Commissioners have advised employers and pension providers that where they are satisfied that an individual under the age of 65 years will only have an individual income from them of less than €18,304 annually, or where aged over 65 years, irrespective of marital status, an income less than €20,000, then they should not deduct any income levy. These administrative arrangements are highlighted in the Frequently Asked Questions on the Income Levy which are available on the Revenue website at www.revenue.ie/en/spotlights/income-levy.html

Where these arrangements are applied, the income levy will only be deducted in cases where there is likelihood that there will be a liability for the year.

In the case of the exemption for those aged over 65 who are married, the legislation provides for a refund after the end of the year because it would not be possible for either the Revenue Commissioners or an employer or pension provider to know during the course of the year whether or not all of the requirements necessary for the exemption to apply have been met. This would include knowing, for example, if the person or their spouse had turned 65 in the tax year, if they had other income sources and the aggregate income from these sources, if there had been a change in employment circumstances or if there had been a change in marital status during the year.

Revenue would not be in a position to establish many of these matters until after the end of a tax year and, accordingly, the legislation provides for the exemption to apply on the basis of a person making a repayment claim after the end of the tax year.

Michael Ring (Mayo, Fine Gael)
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Question 190: To ask the Minister for Finance if all household income is taken into account in determining the rate and amount of tax payable by a public service pensioner who qualifies for a subsequent contributory old age pension; if the dependant relative allowance is means tested and taxed if applicable when such allowance is granted; and the checks and balances in place to ensure that aggregate income is taxed in appropriate cases. [11217/09]

Brian Lenihan Jnr (Dublin West, Fianna Fail)
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Where a public service pensioner qualifies for a contributory old age pension and where appropriate, a qualified adult or qualified child allowance is applicable, all of this income would form part of his or her aggregate income for tax purposes. In the case of a public service pensioner receiving a contributory old age pension, the contributory old age pension, together with any additions that are taxable, may be taxed by restriction of tax credits for the year of assessment or as part of total income under self assessment. Means testing of social welfare payments is a matter for the Department of Social Community and Family Affairs.