Dáil Éireann Debate, Thursday - 16 July 2026
276. Deputy Michael Cahill asked the Tánaiste and Minister for Finance if he will give consideration to points raised in correspondence (details supplied); and if he will make a statement on the matter. [54618/26]
Amharc ar fhreagraAs the Deputy will be aware, the ‘Programme for Government 2025: Securing Ireland’s Future’, contains specific undertakings with regard to personal taxation, it commits to “implementing progressive changes in taxation if the economy remains strong, including indexing credits and bands to prevent an increase in the real burden of Income Tax while in the event of an economic downturn and unexpected deterioration in the public finances we would postpone changes to Income Tax credits or bands, as we did in Budget 2021”.
Turning specifically to the tax treatment of pensioners, the current thresholds for the income tax age exemption are €18,000 per annum where an individual is aged 65 years or over, and €36,000 per annum for married couples and civil partners, jointly assessed to tax, where either individual is aged 65 or over. The relevant income thresholds may be increased further if the individual has a qualifying child. 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.
The current tax arrangements for persons aged 65 or older compare favourably with the tax treatment of the generality of taxpayers. The age tax credit (€245/€490 for single and married persons respectively) or the age exemption limits and marginal relief are available to persons aged 65 or over. Reduced rates of USC also apply for persons aged 70 or older where their total income is €60,000 or less per annum. Furthermore, the State Contributory Pension and the State Non-Contributory Pension are not chargeable to USC or Pay Related Social Insurance.
With the substantial increases to tax credits introduced by the previous Government, the effective entry point to income tax has increased for all taxpayers, including those aged 65 or older. For 2026, the effective entry point to income tax for an individual in receipt of the single person credit, employee/earned income credit and the age credit is €21,225 per annum and for a married two earning couple in receipt of the married person credit, two employee/earned income credit and the married age credit is €42,450 per annum.
Therefore, depending on their personal circumstances, it may be more beneficial for persons aged over 65 to be taxed under the normal tax system of credits and bands.
I would encourage all taxpayers to ensure that they are availing of the most beneficial tax treatment.
Finally, as the Deputy will appreciate, decisions regarding tax reliefs and expenditure supports are normally made by the Government in the context of the annual Budget. Such decisions must have regard to available resources and the sound management of the public finances.
