Invalidity pension taxation

[ivorystraws]

Hi,

I am in receipt of invalidity pension since April 2011. I have recently received a letter from the Revenue detailing that I have a liability in respect of unpaid tax on that invalidity pension. I am also in receipt of a Permanent Health Insurance payment but that is processed through my employer and so is taxed accordingly.
So now the Revenue has updated my records and additional tax will be deducted by my pension provider or employer.

I would just appreciate any clarification anyone can provide on this and confirmation on whether this is correct? I am aware of the confusion over the recent pension taxing controversy this week so I'm wondering if this is a mistake and/or whether there is anything else I need to be aware of?

Thanks.

 

[ClubMan]

Invalidity Pension is taxable assuming that you are talking about the SW/DSP one and that is what you are asking?

http://www.citizensinformation.ie/e...ment/taxation_of_social_welfare_payments.html

Double check your total gross income, tax credits, payslips and ultimate net income to make sure that there are no mistakes. Also make sure to claim all credits and reliefs available to you. If in doubt maybe post the detailed figures here for comment.

 

[ivorystraws]

Invalidity Pension is taxable assuming that you are talking about the SW/DSP one and that is what you are asking?

http://www.citizensinformation.ie/e...ment/taxation_of_social_welfare_payments.html

Double check your total gross income, tax credits, payslips and ultimate net income to make sure that there are no mistakes. Also make sure to claim all credits and reliefs available to you. If in doubt maybe post the detailed figures here for comment.

Yes I am referring to SW/DSP invalidity pension. I'll just have to recheck my credits as you suggested. I wouldn't be an expert at reviewing tax credits so it would be helpful for me to post my questions on this thread but what would suggest I post?

 

[ClubMan]

Ideally (for the year(s) in question) info such as...

• a breakdown of your gross income from all sources
• the details from your statement of tax credits
• the details from your P60(s?) (you might not have this for 2011 yet)
• maybe some details from your job and SW payslips

 

[Joe_90]

Well if the Revenue were not aware of your invalidity pension they would assign all your credits to your pension provider.
So say your pension is €20,000. 20,000 x 20% = 4,000 - 3,300 = 700.
But if you are in receipt of IP of €10,062 then your credits will be reduced by €2,012.
Now your pension is €20,000. 20,000 x 20% = 4,000 - 1,288 = 2,712.
You may have different credits or pension but the principle is the same.