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Tax credits

  • 28-04-2017 9:46am
    #1
    Ben Gadot
    Closed Accounts Posts: 1,767 ✭✭✭


    Hi all, wondering if you can assist on this one. My mother has a private pension through my father's old pension scheme.

    She rang me to say she was taxed significantly more on her pension and the thing I thought initially was that it was due to tax credits.

    Sure enough on her slip her tax credit is showing as zero. She's going in to try and sort it with revenue buy she's panicking at the minute as she believes it might be permanent. I'm of the opinion it's something that can be fixed, but just wondering is it possible that her tax credit could have been removed permanently?


Comments

  • #2
    coylemj
    Registered Users, Registered Users 2 Posts: 25,478 ✭✭✭✭coylemj


    If that pension is her only income (for this discussion, disregard the state widow's pension) then she should be getting her tax credits but the employer who pays the pension can only give her tax credits if he gets a statement from the revenue stating how much credit she is due and what rate of PAYE and USC she should pay. In the absence of such a statement, an employer is obliged to deduct tax at the 'emergency' rates which is basically the top rate for everything (40% PAYE and 5% USC) with no credits.

    I'm assuming that your father is now deceased and your mother is getting an occupational widow's pension - did she sort out her tax situation when your father passed away?

    Her tax credit can't be removed permanently but she can only get credits once so if she has another source of income (e.g. a pension she is entitled to in her own right) , that employer may be already giving her the credits that she is due in which case she would be entitled to no tax credits for the income she gets from your father's pension fund. Tax credits are allocated to each person, you don't get them once for each income stream so it's very much possible to have an income on which you get no tax credits but that should not be the case if it's her only income.


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