Colm Burke (Cork North-Central, Fine Gael)
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42. To ask the Minister for Finance if he will consider increasing the age related tax exemption to income tax from €18,000 per annum where an individual is aged 65 years or over, and €36,000 per annum for married couples and civil partners, jointly assessed to tax, where either individual is aged 65 or over, in view of the fact that there have been increases to the State pension in the past number of years and this exemption has not been increased since 2011; and if he will make a statement on the matter. [16043/25]

Paschal Donohoe (Dublin Central, Fine Gael)
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As the Deputy is aware the current thresholds for the income tax age exemption are €18,000 per annum where an individual is aged 65 years or over, and €36,000 per annum for married couples and civil partners, jointly assessed to tax, where either individual is aged 65 or over. The relevant income thresholds may be increased further if the individual has a qualifying child. Additionally, marginal relief may be available where the individual’s or couple’s income exceeds the relevant exemption limit but is less than twice that amount.

The current tax arrangements for persons aged 65 or older compare favourably with the tax treatment of the generality of taxpayers. For example, the age tax credit or the age exemption limits and marginal relief are available to persons aged 65 or over. In addition, reduced rates of USC also apply for persons aged 70 or older where their total income is €60,000 or less per annum. Furthermore, the State Contributory Pension and the State Non-Contributory Pension are not chargeable to USC or Pay Related Social Insurance.

The Commission on Taxation and Welfare recommended that age should be removed as a factor for determining the charge to income tax and USC as it narrows the base and breaches the concept of horizontal equity. Further details are set out in the Report of the Commission, at the following link - www.gov.ie/en/publication/7fbeb-report-of-the-commission/

As such, I have no plans to increase the age exemption limits.

However, persons aged over 65 can avail of the age exemption or the normal tax system of credits and bands.

With the substantial increases to tax credits in recent Budgets, the effective entry point to income tax has increased for all taxpayers, including those aged 65 or older. For 2025, the effective entry point to income tax for an individual in receipt of the single person credit, employee/earned income credit and the age credit is €21,225 per annum.

Therefore, depending on their personal circumstances, it may be more beneficial for persons aged over 65 to be taxed under the normal tax system of credits and bands.

I would encourage all taxpayers to ensure that they are availing of the most beneficial tax treatment.

Finally, the Deputy may wish to note that Revenue is hosting a series of over 65s "All you need to know about tax" events in the comings weeks and further details can be located on Revenue's website - www.revenue.ie/en/news/articles/revenue-over65s-event.aspx#:~:text=Home%20News-,Revenue%20is%20hosting%20an%20over%2065s%20%22All%20you%20need%20to,register%20in%20advance%20of%20attending