George Lee (Dublin South, Fine Gael)
Link to this: Individually | In context

Question 144: To ask the Minister for Finance if his attention has been drawn to the fact that persons aged over 65 years do not automatically receive an exemption from DIRT tax; the cost to the Exchequer of processing DE1 forms to exempt persons aged over 65 years from paying DIRT tax; his plans to reduce the bureaucracy involved in exempting people aged 65 years from paying DIRT tax; and if he will make a statement on the matter. [42532/09]

Brian Lenihan Jnr (Dublin West, Fianna Fail)
Link to this: Individually | In context

Persons aged over 65 are not automatically entitled to an exemption from Deposit Interest Retention Tax (DIRT). Since April 2007, individuals are exempt from DIRT on their savings income provided:

1. the person or their spouse is aged 65 or over and

2. the person's 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.

The exemption process works on a self assessment basis so that a person over 65 who is within the income limits completes the Form DE1 to have the account exempted from DIRT. In the absence of this form, a financial institution must deduct DIRT. However, where tax is deducted from the savings income of an individual who qualifies for the exemption but has not completed Form DE1, he or she will be entitled to a refund of that tax.

There is no direct cost to the Exchequer in processing Forms DE1 since they are not processed by the Revenue Commissioners but are submitted to, and retained by, the financial institution – whether bank, building society or credit union - with whom the person has a deposit account. That institution then applies the exemption to any interest paid on that deposit account.

I have no plans to change the current system as I consider it necessary in order to ensure that the exemption is applied correctly.