Pensioners who have had tax taken from them even though they are not liable for it will have this corrected “as quickly as possible”, they were told today.
Pension Ombudsman Paul Kenny met the Revenue Commissioners this morning to review the situation regarding tax liabilities for those older people in receipt of an occupational pension as well as a State pension.
The meeting was held at the request of Revenue, Mr Kenny said.
The tax authority earlier confirmed it had written to 15,000 people to inform them they may find tax being deducted even though their total income is likely to fall below the threshold for payment of tax. They will have new tax certificates issued and will be refunded through their employer or pension provider, Revenue said.
Some 150,000 pensioners received letters about their tax liability last week, after Revenue received detailed information from the Department of Social Protection about pension payments. About 115,000 of them, the majority of whom are on smaller occupational pensions, will have some liability for tax.
Revenue has been criticised for its handling of the issue by advocacy bodies for older people. The letters were sent after Revenue received personal data from the Department of Social Protection, under a legal provision to allow such transfers of information.
Minister for Finance Michael Noonan has said it was public knowledge that €45 million would be saved as a result of data sharing exercises between Revenue and the Department of Social Protection, despite claims from the Opposition that the Government had taken a decision not to reveal this information at Budget time.
Describing today’s meeting as “productive and positive”, Mr Kenny said he was happy that things were being “brought under control” and that Revenue would make the necessary steps to correct the situation as quickly as possible.
“That small group of people who may have had tax deducted, for which they are not liable, will receive refunds quite quickly, as work on the exemption certificates has already started.”
Mr Kenny said arrangements for Revenue to be provided with regular feeds of information from the Department of Social Protection were underway.
This would ensure changes to people’s benefits would be brought to Revenue’s attention immediately and tax credits adjusted accordingly, without the need for the taxpayer to notify Revenue individually.
Revenue indicated the volume of calls it was receiving in relation to the pensions issue was still “very high”, although it could not provide exact figures. Some 20,000 calls were handled last Friday and Saturday alone.
Mr Kenny said it was important if someone had a worry that they did speak to Revenue about it.
He said the “vast majority” of people were tax compliant, and expressed “sympathy and understanding for the worry that this updating exercise has caused”.
He said he was assured that, once this initial exercise was completed, there would be “certainty and clarity into the future”.
Revenue defended the letters to the 15,000 people who may find themselves paying tax even though they are not liable.
The letter indicates that these people will be issued with a new tax certificate “shortly” indicating that they are exempt from tax.
Revenue said it was important that the individual tax records be changed once the issues came to light, in order that the situation could be sorted out from the beginning of the 2012 tax year.
Single people over 65 with an annual total income of less than €18,000, or married people on less than €36,000, are exempt from income tax. Also not liable for income tax are people in receipt of a long-term Department of Social Protection pension with no other sources of income.