Duncan Smith (Dublin Fingal, Labour)
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494. To ask the Minister for Finance the reason a person (details supplied) in County Kildare is paying tax on income. [19062/21]

Paschal Donohoe (Dublin Central, Fine Gael)
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In general, payments from the Department of Social Protection (DSP) are taxable sources of income unless they are specifically exempt from income tax. In situations where a person is in receipt of both a private pension and a State pension from DSP, the tax due on the DSP payment is collected by reducing the annual tax credits attributed to the private pension.

I am advised by Revenue that the person in question has income from private pensions and a DSP pension. The combined amount of these payments exceeds her tax threshold and as such she is correctly liable to tax. The amount of tax due is collected by reducing the tax credits attributed to her private pensions. These tax credits were adjusted at the end of January to take account of an increase in her DSP pension since the beginning of 2021.

The adjustment was input by her private pension provider in respect of her February payment and was also backdated to take account of the tax due on the January payment. Revenue has confirmed that the correct monthly tax was deducted from the person’s March payment and this amount will remain the same for 2021 provided there are no further changes to her taxable income.