Irish Independent article, 20th September 2025. Revenue takes it easy when taxing pensioners.

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S class

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There are lots of errors and misinformation in this article.
Also no reference is made about the fact that the age tax exemption and age credits have not been increased in line with inflation for a very long time period.

A more suitable title for this article would be...

Revenue are applying stealth increases when taxing pensioners.
 
I see that it is from the later part of the article

Revenue takes it easy when taxing pensioners​

The Government has put in place structures to ease the financial burden of people who have hit 65, and the Revenue Commissioners are doing their bit.

Older people pay income tax at the lower rate (20pc) on more income than workers.

Up to €18,000 a year, or €36,000 per couple, is taxed at 20pc, compared to just €16,250 for workers.

It’s a common misconception that the state pension isn’t taxed. All income is assessable for tax, but this misconception arises because the maximum you can earn on the state contributory pension is €15,043.60 – and more, once the Christmas bonus, or dependent rates, are added. But it’s rarely enough to bring a pensioner into the tax net.

However, if they also qualify for a range of benefits, or have a separate pension from work, then the whole lot is added together for tax purposes.

This can easily tip them into the tax net – and then it becomes their responsibility to file a tax return.

There is no PRSI charged on income for over 70s.

Any interest earned on savings is not subject to Dirt tax if you are over 65 and earn less than €18,000 a year.
 
Revenue applies the laws set by the government. So it has really been the policy of successive governments.

PRSI is the big one. It is not really linked to benefits so it is, in effect, another tax. And should apply to all income whatever age you are.

So the overall point of that statement is correct: Pensioners are taxed even less than the ordinary worker.
 
Brendan Burgess said:
Up to €18,000 a year, or €36,000 per couple, is taxed at 20pc, compared to just €16,250 for workers.
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The 18k and 36k are tax exemptions.

Tax is not applied up to this amount. The article states that it is taxed at 20%. Incorrect.

Up to 44k is taxed at 20% for any single worker. The article states 16.25k. Incorrect.

Any single worker earning 20k is effectively exempt from income tax, because they have 4k tax credits.

The age tax exemption is no longer of benefit to the majority of pensioners, compared to the tax credits granted to workers of any age.



Brendan Burgess said:
There is no PRSI charged on income for over 70s.
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This is misleading.
A person aged 66 who is in receipt of the COAP is not charged Prsi on their income.


Brendan Burgess said:
So the overall point of that statement is correct: Pensioners are taxed even less than the ordinary worker.
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The overall point of the article is that Revenue take it easy on taxing pensioners.

My point is that this situation is being changed by stealth, because there has been no increases to age tax exemption or credits for very many years.
 
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Brendan Burgess said:
Revenue applies the laws set by the government. So it has really been the policy of successive governments.

PRSI is the big one. It is not really linked to benefits so it is, in effect, another tax. And should apply to all income whatever age you are.

So the overall point of that statement is correct: Pensioners are taxed even less than the ordinary worke
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Not Correct,
The Blind spot most people have and don't want to Accept or acknowledge is they amount of tax and PRSI older people seen taken from there payroll up until the tax marches , Both of us are old enough to remember the tax march in Dublin on March 20 1979 when over 200,000 workers marched against the unfair burden on PAYE employees, many would have been in the tax /PRSI net on low wages from the time the started worked,

between 25% and 30 % was taken from My first pay packet Which was an Apprintance wage of 20% of a full trademan wage,
PS
Most of the people who were at that march in 1979 would have voted FF or FG, by the way,
 
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A person over age 65 earning in excess of €21225 would pay €245 less income tax than a younger person. Not a lot less.

A person over age 65 earning 20k is treated the same as a younger person for income tax.
 
Brendan Burgess said:
For the vast majority of people PRSI is just another tax. It is a fiction to link it to the fund. There is no fund.

There should be and I would be a huge advocate of treating a person's contributions as being in a fund in their name, but I could get no support for this idea.
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Brendan
I am very well aware you got no support for this idea,
The reason been PRSI is funded for the most part from Payroll PRSI Some see to 20% of payroll others see 4% of income going in and others pay a lot less and get the same pension
Enough of off topic
A good example of people Mixing up Income tax and other taxes with PRSI is the recent Posts on this site about Schools Secretary's and Caretakers
You had lots of people getting all hot and bothered at the thought of the new arrangements result in back dating of pension entitlement's been unaware for the most part most Pension will come out of the PRSI fund one way or another and up to 20% of their payroll in already going into the PRSI fund since the started working in Schools,
A quick check would tell you some were only paying 4% to the fund,
es
 
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S class said:
People over 66 are liable for Prsi.

Class M on pensions and class J if they continue in employment.
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But class M and J involve zero payment by the individual so while it's technically correct to say that they're liable for PRSI, it's also arguably kind of moot since they don't actually pay anything?
 
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S class said:
Revenue are applying stealth increases when taxing pensioners.
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Only if you believe that the Office of the Revenue Commissioners is the entity that decides national taxation policy.

Many of us would argue that that'taxation policy is a matter for the Governemnt of the day.


S class said:
People over 66 are liable for Prsi.
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Or, more accurately, individuals aged over 66 are liable for PRSI if they opt to keep working and don't apply for the State Contributory Pension.
 
Brendan Burgess said:
It's fully on topic.

PRSI is a tax like any other. And those over 65 generally don't pay it. So they have less deductions than younger people.
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PRSI is not a tax like any other tax,some pay away more depending how your are paid your income,
Example
If you looked at the associated cost of making a part
A self employed person would have a 10.5% advantage over a paye worker making the same part when it comes to Prsi before adding profit,
of lets say 20%

A PAYE workers part would cost an extra 10.5% to cover extra PRSI before profit is added,
in Germany social security is around 1% lower for the self employed,
if you were to go by what you are suggesting now there is little chance of it ever getting sorted,
USC was the Troikas way of levelling things up Employees PRSI was 12 % and came down to 4% when the USC was brought in,

In around about way high income payers are subsidising the lack of a fairer social security system in Ireland since the time the TROIKA arrived,
Same goes for all PAYE tax payers and employer's who pay wages trough PAYE since PRSI Was brought in,
 
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