Dáil Éireann Debate, Tuesday - 20 January 2026
379. Deputy Conor Sheehan asked the Tánaiste and Minister for Finance the reason a person’s private pension (details supplied) is now being taxed at a rate that is 50% more than that of 2025; and if he will make a statement on the matter. [4253/26]
View answerAs the Deputy may be aware, Section 188 of the Taxes Consolidation Act 1997 (TCA 1997) provides for an age exemption for any year of assessment where an individual is aged 65 years or over and his or her total income does not exceed €18,000 per annum. Where an individual is a married person or civil partner and is jointly assessed to tax, the age exemption will apply where either individual is aged 65 or over and where the couple’s total income does not exceed €36,000 per annum. Additionally, marginal relief may be available where the individual’s or couple’s income exceeds the relevant exemption limit but is less than twice that amount. Where marginal relief applies the individual or couple is taxed at 40 per cent on all income above the exemption limit to a ceiling of twice the exemption limit.
However, persons aged over 65 can avail of the age exemption or the normal tax system of credits and bands, whichever is more beneficial.
In this case, Revenue have advised me that the overall taxable income of the person concerned has increased from 2025 to 2026, which resulted in the increase in income tax deducted from their occupational pension.
I am further advised by Revenue that having reviewed the record of the person concerned, they have removed the age exemption from their record for 2026 as it is not the most beneficial tax treatment available in this instance.
As a result of this update, Revenue confirms that the person concerned is now chargeable to income tax at the normal tax credits and rate band of 20 per cent. Any income tax over-deducted from the person concerned to date in 2026, will be refunded to them by their pension provider through their upcoming payroll. An amended Tax Credit Certificate for 2026 will issue to the person concerned by post, confirming their updated position for this period.
Revenue have also informed me they will contact the person concerned in the coming days to assist them in finalising their income tax return for 2025 as they may have overpaid income tax for that period.
