Michael McGrath (Cork South Central, Fianna Fail)
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I propose to take Questions Nos. 236 and 237 together.

It is a general principle of taxation that, in the absence of a specific exemption, income from all sources is subject to tax. A charge to tax under schedule E is imposed in respect of certain Social Welfare payments by virtue of section 126 of the Taxes Consolidation Act 1997. That section specifically applies tax to the widows (contributory) pension, retirement pension and old age (contributory) pension, among other benefits.

I am advised by Revenue that taxation of the pension double payment follows the taxation of the normal pension payment and tax is payable in respect of taxable pensions and benefits, while no tax is due in respect of exempt payments such as disability allowance, or domiciliary care allowance.

A person’s tax liability depends on his or her personal circumstances, available tax credits and any other income. An individual whose sole income is a State pension payable by the Department of Social Protection, would not incur a tax liability because of the tax credits available.

Finally, I am advised by Revenue that Social Welfare payments are not liable to PRSI or USC.

I currently have no plans to make adjustments to the tax treatment of the pension double payment.