Pension audit yields almost double amount expected

Monday 06 January 2014 19.25
Thousands of pensioners had presumed they did not need to declare their State pension to Revenue in addition to any private income
Thousands of pensioners had presumed they did not need to declare their State pension to Revenue in addition to any private income

An audit of pensioners who were in receipt of a State pension and private retirement income has yielded almost double the €45m originally expected.

Thousands of pensioners had presumed they did not need to declare their State pension to the Revenue Commissioners in addition to any private income. 

However, in 2012 the Revenue Commissioners controversially announced that it would write to 150,000 pensioners informing them that they were obliged to declare income even if it came from the Department of Social Protection. 

In a Dáil reply to Fianna Fáil finance spokesman Michael McGrath, Minister for Finance Michael Noonan said pensioners were being contacted about the collection of outstanding taxes. 

"Where underpayments of tax were discovered, PAYE balancing statements and amended notices of assessment were issued to the taxpayers concerned in respect of the particular years reviewed and discussions were held with regard to collection of arrears due," the minister said.

€24.5m was paid in relation to years prior to 2012. 

In Budget 2012, the Government said it expected to raise an extra €45m, however Minister Noonan said a provisional amount of €65m had been collected. 

Mr McGrath said that in the vast majority of cases, the issue here was not one of deliberate tax evasion.

"Pensioners in receipt of private pension income made the reasonable assumption that the Revenue was aware they were also in receipt of a State Pension from the Department of Social Protection," he said.

"It came as a complete surprise to the pensioners concerned that they had in fact been building up a liability because their State pension was not being taxed by Revenue," he added.

"The fact that Revenue has now collected double the original estimate of €45m from this compliance initiative is evidence that no one really knew the extent of the taxes that were due but not paid," Mr McGrath said.