Michael McGrath (Cork South Central, Fianna Fail)
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It is assumed that the Deputy’s proposals are to increase the married age exemption limits to €45,000 and €50,000 per annum respectively.

On that basis, I am advised by Revenue that the estimated first and full year cost of increasing the age exemption limit to €45,000 for a married couple and €22,500 for a single person would be in the order of €180 million and €210 million respectively.

The estimated cost of increasing the age exemption limit to €50,000 for a married couple and €25,000 for a single person would be in the order of €310 million and €360 million respectively.

These costs include corresponding increases to the limits on marginal relief but do not included any increase in the child addition limits.  

At present, I have no plans to increase the age exemption thresholds.  It is also important to take into account that the current tax arrangements for persons aged 65 or older compare favourably with the tax treatment of the generality of taxpayers.   For example, persons aged 65 or over may also avail of the age tax credit, which currently amounts to €245 per year for single persons or €490 per year for married couples or civil partners.  It is also important to point out that a taxpayer is always given the benefit of the more favourable treatment as between the use of marginal relief or the normal tax system of credits and bands.  

Furthermore,  reduced rates of USC also apply for persons aged 70 or older where their total income is €60,000 or less. Additionally, the State Contributory Pension and the State Non-Contributory Pension are not chargeable to USC or PRSI. 

As the Deputy may be aware, the recent Commission on Taxation and Welfare recommended that age should be removed as a factor for determining the charge to Income Tax and USC.  The report stated that the determination of an individual’s tax treatment based on age narrows the base and breaches the concept of horizontal equity, whereby those with similar income should pay the same proportion of that income in taxes. It also breaches the concept of intergenerational equity. Further details are set out in the Report of the Commission, located at the following link - www.gov.ie/en/publication/7fbeb-report-of-the-commission/

My Department has begun work on a review of the personal tax system, taking account of the recent report of the Commission on Taxation and Welfare, and considering a range of personal taxation issues.