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All 5 parts of A GUIDE TO TAX AND ENTITLEMENTS IN 2015

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Part 2  

Part 3  

Part 4  

Part 5  

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Euro NotesTAXATION

Under the Tax Credit system, Tax Payable = Gross Tax minus Tax Credits.
Gross tax liability is calculated on your total income (after deduction of superannuation and permanent health benefit) by applying 20% to income up to your standard rate cut-off point and 40% on the remainder. The cut-off point in 2015 will be:

Standard Rate Cut-off Income 2015

 

Weekly

12 Month Value

Single/Widowed

€650.00

€33,800

Single Person Child Carer

€726.92

€37,800

Married (one income)

€823.08

€42,800

Married (two incomes)

€1,300.00

€67,600

If you rent rooms in your own home for less than €12,000 gross, this will be exempt from income tax and USC, provided the tenant is not your own child, and the rent is not being paid by the employer of the tenant.

If you care for up to 3 children in your home and receive less than €15,000, this income will be exempt from tax but a minimum €500 Social Insurance is payable. If you exceed these amounts, the exemption is lost and the whole lot is taxed. You must be registered with the HSE as a child minder.

Your Tax Certificate will show the annual value of all your Tax Credits and the equivalent weekly or monthly amount which are subtracted from this gross liability to yield the tax payable:

Tax Credits 2015

 

Single Person

€1,650

Married Couple

€3,300

Widowed

€2,190

Single Person Child Carer

€1,650

PAYE Credit (per individual)

€1,650

Age Tax Credit (per individual)

€245

Incapacitated Child

€3,300

Home Carer’s Tax Credit

€810

Dependent Relative

€70

 

Tax credits which are unused are not refundable. They will be carried forward from week to week during a tax year, but if unused after the end of the tax year, they are lost.

Age Exemption: Persons aged 65 or over are exempt from income tax if their gross incomes from all sources is under €18,000 (single), €36,000 (married).

An Incapacitated Person, or one or more of their family, can deduct up to €50,000 from their taxable income to employ a home help.

Mortgage Interest: Mortgage relief does not apply to new loans taken out after 31 December 2012.

Certain expenses carry a 20% Tax Credit:

Employer provided childcare is subject to income tax as Benefit in Kind.

A Universal Social Charge applies to gross income from whatever source (excluding only Social Welfare Payments) and without deduction of pension contributions

An exemption applies to persons whose total income is under €12,012 (€231 per week). The self-employed pay 11% on income over €100,000. Persons aged 70 or over and Medical Card holders whose aggregate income does not exceed €60,000 pay a maximum 3.5%.

Pay Related Social Insurance (PRSI) applies to gross income (with no deduction for pension contributions) of workers and the self-employed aged 16-66. A single rate of 4% now applies to both categories with no ceiling. Public servants on modified rate will now pay 4% on their income in excess of €75,036. All workers are exempt from Social Insurance if they earn less than €352 per week. The minimum contribution by a self-employed person is €500 per year. From 2014 PRSI applies to unearned income of persons who are required to make a tax return. Insignificant income (e.g. bank interest) of a PAYE payer is not affected.

Pensions: A certain portion of gross earnings under €115,000 can be put into a pension tax free. It is up to 15% (under 30 years) rising in steps to 40% (60 years or over), allowable at your top rate of tax. However, a ceiling of €2 million applies to the total value of a person’s pension plan. Any benefit that accrues over that value will have a 41% retention charge, before ordinary tax is applied to the balance. In 2014 and 2015 a person may withdraw 30% of AVCs, but you will be taxed at your marginal rate of tax. The levy on private pension funds is being reduced from 0.75% to 0.15% in 2015 and eliminated thereafter.

DIRT Tax: A single retention tax of 41% applies to interest earned on ordinary deposit accounts, investment accounts and all Credit Union accounts. Persons who are 65 and over, or permanently incapacitated, can, if your total income is not sufficient to make you taxable, notify your bank and receive the interest without deduction of DIRT. From 14 Oct 2014 until end 2017, First Time Buyers can get a refund of DIRT on savings to make up a deposit of up to 20% on the purchase of a home.

Local Property Tax is chargeable on the owner of a residential property at a rate of 0.18% of the market value on 1 May 2013 as fairly assessed by that owner (a higher 0.25% applies to the excess over €1million). This valuation will not change before 1st November 2016. For 2015 the Dublin Councils have agreed to reduce the tax due under this calculation by 15%.

Exemptions include:

Inability to pay:

An owner may defer the entire payment:

Home Renovation Incentive:

An income tax credit of 13.5% applies to home renovations up to a maximum expenditure of €30,000 undertaken before 31 December 2015 and will be refunded over the two years following the year in which the works are carried out. To qualify at least €5,000 (inclusive of VAT) must be spent. Both home owners and landlords can avail of this credit. The tax credit is only available where Local Property Tax and Household Charge are up to date. If planning permission is required, you have up to March 2016 to complete the works.


 

SOCIAL WELFARE

The Basic Social Welfare rates from January 2015 are:

Basic Social Welfare rates from January 2015

 

Adult

Adult Dependent

Contributory OAP (Full Rate)

€230.30

€206.30 (aged 66 or over)

Non Contributory OAP

€219.00

€144.70 (aged 66 or over)

Contributory Widows - under 66

€193.50

 

Contributory Widows - 66 or over

€230.30

 

Invalidity Pension

€193.50

€138.10

Maternity Benefit

€230.00

 

Supplementary Welfare

€186.00

€124.80

Carer’s Allowance - under 66

€204.00

 

Carer’s Allowance - 66 or over

€239.00

 

All Other Payments

€188.00

€124.80

Living Alone Allowance

€9.00

 

Over 80 Allowance

€10.00

 

In assessing eligibility, the CWO takes into account all income coming into the house including part-time earnings of a spouse and income of other adults. Full-time students and persons working over 30 hours are not generally eligible. Decisions can be appealed to Social Welfare Appeals Office, D’Olier House, D’Olier Street, Dublin 2 (Ph: 01-6732800; LoCall 1890 74 74 34).

Pensioners who don’t have a Social Welfare pension can qualify at age 66 on the same terms provided their means don’t exceed the Contributory OAP rate by more than €100.

If you are aged 70 or over, you can qualify for all of these free schemes regardless of your income or its source and regardless of who lives with you. If you are widowed and aged 60 or over, you can retain the free schemes and free travel if your late spouse had them, and you satisfy the other conditions.

 

 


 

OPTIONS FOR THE UNEMPLOYED

STARTING YOUR OWN BUSINESS

WORK AND TRAINING

A maximum rate of €160 BTEA/VTOS will be paid to persons aged 25 or under. If you are on these schemes, you must apply for waiver of the Student Contribution under the third level grant. Part-time VTOS options can be taken up without affecting Social Welfare entitlements subject to approval.

Upper Income Limit (fewer than four children)

 
   

Special Rate Maintenance (€2,375) and Student Contribution (€3,000)

€22,703

Full Maintenance (€1,215) and Student Contribution (€3,000)

€39,875

(with part-entitlement graded down with rising income to:)

 

Half Student Contribution (€1,500)

€54,240

The maintenance payments are higher if your college is over 45 kilometres from your home (€5,915 (Special Rate), €3,025 (Full Rate)). To qualify for the special rate, one of those whose income is being assessed must be on FIS or a Social Welfare payment. For each additional family member in college, about €4,700 is added to the other means-tests. Families with four or more dependent children also have higher upper income limits. If you are over 23, and have been living independently of your parents from 1 October of the year before entry onto the course, the means-test will apply to your own income (and that of your partner if any).

 

 

HEALTH

 

Medical Cards

   
 

Medical Card

GP Only

 
 

Under 66

66 and over

Under 66

66 and over

Single living alone

€184.00

€201.50

€276.00

€302.00

Single living with family

€164.00

€173.50

€246.00

€260.00

Married or cohabiting couple

€266.50

€298.00

€400.00

€447.00

(or single parent)

       
         

Additional Allowance for Dependent Children

       
 

Medical Card

GP Only

 

for each of first two children under 16

€38.00

 

€57.00

 

for third and each subsequent child under 16

€41.00

 

€61.50

 

for each of first two children over 16

€39.00

 

€58.50

 

for third and each subsequent child over 16                        

€42.50

 

€64.00

 

for each child over 16 in full time third

€78.00

 

€117.00

 

level education (no grant)

       

The HSE will consider cases outside these guidelines in special circumstances, for example to cover one family member with high medical costs. Medical Card holders do not have to pay exam fees for children. Persons with British or EU pensions, who have no Irish Social Welfare pension, generally qualify for the Medical Card regardless of income. Students will only qualify for a Medical Card in their own right if they have an independent income of at least €164 (this can include a student grant which would not count in the Medical Card means-test).

A spouse is assessed with half of the couple’s joint income and assets. The HSE can assess assets transferred in the past 5 years. The balance of the cost will be met by the State.

If the assets are in property, the contribution can be deferred until settlement of the person’s estate, but the money owing will be increased by the Consumer Price Index each year. In the case of the family home only, the contribution will be capped at 22.5% (i.e. after three years of care). The deferred charge against the home will not be collected during the lifetime of a surviving spouse or a disabled child. This deferral must be separately requested by the patient, or by a care representative approved by the Circuit Court for a patient who is not capable of making the decision themselves.

 


 

Update on Water Charges:

Certainty:

All households will know what their maximum bills will be until the end of 2018, which is particularly important for larger households or those with high usage due to medical needs.