The announcement by Revenue that 115,000 pensioners have
been underpaying their tax will come as a shock to many. The reason apparently
is because the Revenue didn’t know they were in receipt of Social Welfare
pensions and therefore hadn’t factored this extra income into their tax
allowances.
The Revenue press release on this matter indicates that the
tax payable could exceed €4,000 for a single person or €8,000 for a married
person. Taking the lower figure as an average it would seem that the tax
foregone could amount to €460m – about the amount collected by the pension
levy. Its begs the question whether or not the pensions levy could have been prevented?
Amazingly there is no suggestion that previous underpayments
will be collected. The Revenue's focus will be on getting it right from now on.
Other pensioners who paid their tax in full and are now paying a pension levy
on top can only look with envy at their peers who have neither exposure.
