SRCOP and State Pension

M

Macbeth

Registered User
Messages
33
I have a query about the treatment of the state pension for tax purposes.
I know that this is taxable income but is it treated in the same way as say,
PAYE income? I am on PAYE and in receipt of an occupational pension and my wife receives a pro-rata state pension of approx. €10,000 per annum. We are jointly assessed.
In my 2015 tax credit certificate, my SRCOP starts off not at 42,800
but at 52,800, so it seems to be increased by the exact amount of my wife's pension.
It is then reduced by 10,000 to bring it back to 42,800. The tax credits are also adjusted accordingly, i.e. reduced by 2,000. In addition, the PAYE tax credit is shown as 3,300 and not 1650, as I would have expected.
All of this suggests to me that my wife's pension "income" is being viewed in the same way as if she were an employee on PAYE. Is this correct - or have Revenue made a mistake?
I don't want to be in a situation where there is an underpayment of tax and have Revenue seeking to collect it later. Any replies would be appreciated.
 
The SP is added to other income, and the total is taxed as normal.

Yes, the receipt of the SP means the recipient will also get the PAYE tax credit.
 
Protocol said:
The SP is added to other income, and the total is taxed as normal.

Yes, the receipt of the SP means the recipient will also get the PAYE tax credit.
Click to expand...

Thanks for the information but I am puzzled as to why the SRCOP was increased by 10,000 and then reduced
by the same amount. Why is this?
Also, my certificate for 2014 did not have any of these adjustments (when our circumstances were the same),
so do I need to contact Revenue about this?
 
http://www.revenue.ie/en/tax/it/leaflets/it1.html#section3

The SRCOP for married couples with two incomes in 2015 is 42,800 with an increase of 24,800 max.

So your SCROP is increased by your wife's income.

So your SRCOP becomes 42,800 + State Pension.

Now, if that pension was taxed at source, then that would be it. However, we don't tax OAP at source in Ireland, so instead we increase the taxes on your other incomes.

To do that, the SRCOP and tax credits are cut.
 
If you think that these adjustments to the SCROP and tax credits weren't made in 2014, then yes, there is a potential tax liability, as the OAP may not have been taxed.

So, yes, I would contact them.
 
You must log in or register to reply here.
Back
Top