115,000 private sector pensioners fiddling the system

waster81

It seems that 115000 pensioners have being claiming the state pension while also receiving their own private sector pension

http://www.rte.ie/news/2012/0105/pensions.html

Thoie

waster81 wrote: »

It seems that 115000 pensioners have being claiming the state pension while also receiving their own private sector pension

http://www.rte.ie/news/2012/0105/pensions.html

There's nothing wrong with claiming both, you just have to declare it to Revenue, and pay income tax, if appropriate.

The state OAP on its own comes in under the threshold for paying income tax. However if you had a private pension as well, the combined incomes might move you into the tax bracket.

Icepick

Here is another shocker. You don't have to be a private sector worker to have a private pension.

waster81

Thoie wrote: »

There's nothing wrong with claiming both, you just have to declare it to Revenue, and pay income tax, if appropriate.

The state OAP on its own comes in under the threshold for paying income tax. However if you had a private pension as well, the combined incomes might move you into the tax bracket.

yes and thats the point they havent being declaring that they receive both

waster81

Icepick wrote: »

Here is another shocker. You don't have to be a private sector worker to have a private pension.

But public servants cant get state pension!

Geuze

They can.

Many PS hired pre April 1995 didn't pay PRSI class A, so they won't get a CSP.

But many did pay PRSI class A, and so will get a State Pension, integrated with their work pension.

I know plenty of them.

Geuze

Yet again you ask why have PS agencies left it this late to talk to each other and exchange data?????

It looks more and more that Revenue and DSP should migrate to one software system.

gerryo777

waster81 wrote: »

It seems that 115000 pensioners have being claiming the state pension while also receiving their own private sector pension

http://www.rte.ie/news/2012/0105/pensions.html

Probably the same crowd that go on about the unemployed 'scroungers' and the 'unmarried mothers' and the like.... about time they were caught!!!

amacachi

Geuze wrote: »

Yet again you ask why have PS agencies left it this late to talk to each other and exchange data?????

It looks more and more that Revenue and DSP should migrate to one software system.

The cost of such a system would run into the billions, remember what country you're in.

waster81

Geuze wrote: »

They can.

Many PS hired pre April 1995 didn't pay PRSI class A, so they won't get a CSP.

But many did pay PRSI class A, and so will get a State Pension, integrated with their work pension.

I know plenty of them.

Many thousands post 1995 will not be claiming both

Geuze

All PS hired post 1995 will get a PRSI pension integrated with their work pension.

Their pension will have two elements - the CSP and a work pension element.

hmmm

How in the name of all that is holy did Revenue only realise now that 100k+ people were under-declaring their pensions? How does a pensioner go about declaring that they receive a private pension in the first place? The Revenue has details of all of this on file, why was it not matched?

This looks like a nightmare for a lot of people.

Thoie

waster81 wrote: »

yes and thats the point they havent being declaring that they receive both

Your original post didn't make that particularly clear - it seemed as if you were saying they were fiddling the system by claiming the state pension.

To be honest, looking at Revenue.ie (which is normally fairly helpful), the only mention I found about income tax on pensions was about foreign pensions - I wouldn't have automatically known that I'd have to notify Revenue that I was receiving the State pension - I'd have assumed they'd know that.

Doing a search on Revenue, it's only when you get to page 29 of a PDF entitled "Guide to completing 2010 Pay & File Returns" that I found the first mention that I'd need to declare it.

As the majority of pensioners were probably previously PAYE employees, they may not even be aware of filing tax returns. Now, as they say, ignorance is no defense. They owe the money, fair enough, but of 100+k pensioners, I doubt all of them were genuinely fiddling anything.

Hopefully the Revenue will have learned from this, and will liaise with the Dept of Social Welfare in future to make sure that all new recipients of the state pension are made aware of the requirement to file tax returns.

Paarthurnax

hmmm wrote: »

How in the name of all that is holy did Revenue only realise now that 100k+ people were under-declaring their pensions? How does a pensioner go about declaring that they receive a private pension in the first place? The Revenue has details of all of this on file, why was it not matched?

This looks like a nightmare for a lot of people.

Its getting ridiculous at this stage, last week we had 20 millon given out in pensions to dead people. It all adds up and we wonder where the money is all going. The state has been haemorrhaging money for years.

expectationlost

this is revenue fault their records were wrong not the pensioners fault

zenno

The father was talking about this earlier when i seen him and his state pension was cut today in a letter from the revenue and he is married and gets €29,100 per annum so what happened there ? he is below the €36,000 so he should be exempt from tax.

when the government says you have to declare the amount you have each year I thought that was only if you are over the €36,000 ?. surely you don't have to declare if you are under the €36,000 as they would have this information already on their government computers.

foggy_lad

hmmm wrote: »

How in the name of all that is holy did Revenue only realise now that 100k+ people were under-declaring their pensions? How does a pensioner go about declaring that they receive a private pension in the first place? The Revenue has details of all of this on file, why was it not matched?

This looks like a nightmare for a lot of people.

The revenue would have known about the private pensions but were not aware that these people had also applied for and were receiving the non means tested contributory state pension because there is no transfer of information between government departments like revenue health social protection etc.

foggy_lad

zenno wrote: »

The father was talking about this earlier when i seen him and his state pension was cut today in a letter from the revenue and he is married and gets €29,100 per annum so what happened there ? he is below the €36,000 so he should be exempt from tax.

when the government says you have to declare the amount you have each year I thought that was only if you are over the €36,000 ?. surely you don't have to declare if you are under the €36,000 as they would have this information already on their government computers.

his state pension was not cut but he is now paying tax on a portion of his income because he has gone over the treshold, and you must declare everything you earn from every source.

zenno

foggy_lad wrote: »

his state pension was not cut but he is now paying tax on a portion of his income because he has gone over the treshold, and you must declare everything you earn from every source.

well he said he added everything up and is under so he can't understand why he was hit.

Victor

hmmm wrote: »

How does a pensioner go about declaring that they receive a private pension in the first place?

You make a tax return.

The Revenue has details of all of this on file, why was it not matched?

Not necessarily.

expectationlost wrote: »

this is revenue fault their records were wrong not the pensioners fault

I think there is joint responsibility.

zenno

foggy_lad wrote: »

but he is now paying tax on a portion of his income because he has gone over the treshold

yes i see. he said it was on his income that was cut but how is he over the threshold if his whole income including his wifes is €29,100 ? when it only affects those earning €36,000 and over. bit confused here.

foggy_lad

zenno wrote: »

yes i see. he said it was on his income that was cut but how is he over the threshold if his whole income including his wifes is €29,100 ? when it only affects those earning €36,000 and over. bit confused here.

He should try filling out some kind of tax calculator like this one http://www.deloitte.ie/tc/ and include all income even from your mother

Are they being assessed together or separately?

zenno

foggy_lad wrote: »

He should try filling out some kind of tax calculator like this one http://www.deloitte.ie/tc/ and include all income even from your mother

Are they being assessed together or separately?

he said the both of them were assessed together as he said to me that he calculated everything up again. he's damn good at the mathematics so i'd say he has it calculated perfectly. again himself and his wifes total income from everything is €29,100

Edit: Thanks for the calculater link I will get him to try this tomorrow.

mistermouse

Fuel Allowance etc would all be allocated differently if everything was declared. I know someone who declared everything and despite earning around €330 per week is not entitled to Fuel Allowance for example

I'm not saying Pensioners are deliberately defrauding the system, but quite an amount would be saved on other benefits if all was declared

It still in most cases is a fraction of the fraud that goes on with others

Geuze

expectationlost wrote: »

this is revenue fault their records were wrong not the pensioners fault

Incorrect.

The pensioners had failed to inform the Revenue that they were in receipt of a State Pension.

Geuze

zenno wrote: »

The father was talking about this earlier when i seen him and his state pension was cut today in a letter from the revenue and he is married and gets €29,100 per annum so what happened there ? he is below the €36,000 so he should be exempt from tax.

when the government says you have to declare the amount you have each year I thought that was only if you are over the €36,000 ?. surely you don't have to declare if you are under the €36,000 as they would have this information already on their government computers.

All income is taxable.

State Pensions have not been cut.

If he is married, and all their incomes add up to less than 36k, then they have no tax liability.

"Govt computers"??!!! - no, they can't read minds, we must tell the Revenue if we are in receipt of State Pensions.

DubArk

I just got off the phone with my 80 year old widowed mother who was away for Christmas with my eldest brother and family. She was reduced to tears on the phone this morning after receiving the letter from the Revenue. The letter was as clear as mud to her and when she read it out to me, I was none the wiser either and I work on financial matters all day. What a bunch of complete knobs. Is there one brain cell functioning within the Irish Government?

Did they not realise, that unless explained in simple English, that this would cause stress to our older population. At least I had a chance to talk to her and reassure her that I would sort it out ASAP.

How many older people who don’t have someone to help them, are in distress at this news? 115,000 people have been contacted by the revenue!?! I grow more and more ashamed of this countries government and previous governments every day.

antoobrien

zenno wrote: »

yes i see. he said it was on his income that was cut but how is he over the threshold if his whole income including his wifes is €29,100 ? when it only affects those earning €36,000 and over. bit confused here.

foggy_lad wrote: »

He should try filling out some kind of tax calculator like this one http://www.deloitte.ie/tc/ and include all income even from your mother

Are they being assessed together or separately?

I think for joint assessment it has to be registered with revenue, might want to check this out as well (could just be part of the form).

mathepac

expectationlost wrote: »

this is revenue fault their records were wrong not the pensioners fault

I don't agree. Every individual tax-payer is responsible for their own tax-matters and for being tax-compliant.

I know it comes as a shock to some pensioners that they may now fall into some taxable income bracket, but the reality for a lot of them is that they paid tax and knew about their responsibilities before they retired and drew their pensions. It's not as if they reached retirement age and the words "tax liability" and "income" were automatically erased from their vocabularies or from their knowledge bases.

Rather than blame Revenue or "them computhers" again, what about the financial advisors and pensions experts some of these people would undoubtedly have consulted prior to retirement? Do they not bear huge responsibility here in retirement and tax-planning terms? They were paid very handsomely over the contribution years for their input.

antoobrien

amacachi wrote: »

The cost of such a system would run into the billions, remember what country you're in.

I wouldn't mind spending a billion to overhaul the entire government software system, but it wouldn't cost that much (and certainly not up front).

Hell give me a few million and I'll do it.

padraig.od

DubArk wrote: »

I just got off the phone with my 80 year old widowed mother who was away for Christmas with my eldest brother and family. She was reduced to tears on the phone this morning after receiving the letter from the Revenue. The letter was as clear as mud to her and when she read it out to me, I was none the wiser either and I work on financial matters all day. What a bunch of complete knobs. Is there one brain cell functioning within the Irish Government?

Did they not realise, that unless explained in simple English, that this would cause stress to our older population. At least I had a chance to talk to her and reassure her that I would sort it out ASAP.

How many older people who don’t have someone to help them, are in distress at this news? 115,000 people have been contacted by the revenue!?! I grow more and more ashamed of this countries government and previous governments every day.

Checking out her Swiss bank account more like. Maybe the Government plan is worry old people to death, save a few bob on the medical cards?

Gumbo

I think its being blown out of porportion, agian.....

The variety involved in this is immense. It may be that somebody has a very modest increase in their tax. It may be something as small as one euro a week," he said.

However, Revenue has estimated that around 2,500 of the 115,000 who did not declare have non-state pension income in excess of 50,000 euro.

Like, come one, if your earning over 50k from a private pension, surely your wise enough to cop on that maybe i need to declare some of this?

Source

mathepac

antoobrien wrote: »

I wouldn't mind spending a billion to overhaul the entire government software system, but it wouldn't cost that much (and certainly not up front). ...

Does anyone remember the PPARS fiasco? A simple payroll and personnel records management system for the HSE that after several schedule and budget overruns had its implementation stopped to avoid further cost over-runs.

People who know little if anything about work-design and organisation-design try to implement both via software and it always fails.

SerialComplaint

There is probably a similar problem for couples where one person was on Jobseekers Benefit. This is also taxable income, and if the other person was earning, there will probably be a tax liability here.

Godge

Geuze wrote: »

All PS hired post 1995 will get a PRSI pension integrated with their work pension.

Their pension will have two elements - the CSP and a work pension element.

Yes but there are very few of post-1995 public servants retired - it is only 15 years ago. Of the 115,000 over 90% would be private sector.

Godge

DubArk wrote: »

I just got off the phone with my 80 year old widowed mother who was away for Christmas with my eldest brother and family. She was reduced to tears on the phone this morning after receiving the letter from the Revenue. The letter was as clear as mud to her and when she read it out to me, I was none the wiser either and I work on financial matters all day. What a bunch of complete knobs. Is there one brain cell functioning within the Irish Government?

Did they not realise, that unless explained in simple English, that this would cause stress to our older population. At least I had a chance to talk to her and reassure her that I would sort it out ASAP.

How many older people who don’t have someone to help them, are in distress at this news? 115,000 people have been contacted by the revenue!?! I grow more and more ashamed of this countries government and previous governments every day.

115,000 people avoiding tax for years and years forcing the compliant PAYE earners to have to make up the difference. I grow more and more ashamed of the ordinary Irish person's attitude to paying their fair taxes every day.

sarumite

If tax officials fail to take account of your coap when determining tax credits, is that wholly the fault of the pensioner?

Gumbo

sarumite wrote: »

If tax officials fail to take account of your coap when determining tax credits, is that wholly the fault of the pensioner?

If pensioners fail to declare their COAP, is that wholly the fault of the tax official?

Works both ways, maybe this software integration is a step in the right direction. People have been screaming for inter department communication, and now here we have it.

Manach

Yet again the State shows its ham fistedness by sending out jargon riddled letters, pitch in the arcane language tax lore instead of the ordinary citizen. This is an indication of the bureaucratic mindset of the State, constantly demanding its "fair" share, to keep running a byzantine system.

sarumite

kceire wrote: »

If pensioners fail to declare their COAP, is that wholly the fault of the tax official?

Works both ways, maybe this software integration is a step in the right direction.

Kind of my point really, hence use of the word "wholly" when asking the question.

On edit: I would have thought the government would know who are recieving coap?

cyclopath2001

sarumite wrote: »

If tax officials fail to take account of your coap when determining tax credits, is that wholly the fault of the pensioner?

That's not what happened. The pensioners involved failed to declare all their income. The tax office discovered this when they got access to the Social Welfare records. Until recently this was not allowed on privacy/data protection grounds.

Godge

Manach wrote: »

Yet again the State shows its ham fistedness by sending out jargon riddled letters, pitch in the arcane language tax lore instead of the ordinary citizen. This is an indication of the bureaucratic mindset of the State, constantly demanding its "fair" share, to keep running a byzantine system.

In the same way that drunk drivers try to get off because the jargon in the letters or the legislation isn't written 100% correctly, these letters also have to be written in a way that complies with the revenue law. They are not simple letters from a simpleton.

Gumbo

sarumite wrote: »

Kind of my point really, hence use of the word "wholly" when asking the question.

On edit: I would have thought the government would know who are recieving coap?

When the new software/department integration kicked in, they were able to see it. Up until now, there has been no department imtegration between the 2, but from now on there is, and hence the under-declarations were found.

I can understand the average pensioner who might of been under paying by a euro or 2 but the guys (2,500 of them) that claimed COAP and aquired a private pension pot (fair play to them btw) worth 50k upwards, surely these guys would be intelligent enough to understand that maybe this income has to be declared?

sarumite

cyclopath2001 wrote: »

That's not what happened. The pensioners involved failed to declare all their income. The tax office discovered this when they got access to the Social Welfare records. Until recently this was not allowed on privacy/data protection grounds.

I was reading from this article

http://www.independent.ie/business/personal-finance/pensions/taxman-to-target-one-in-four-pensioners-following-blunder-2981768.html

"One pensioner spoken to by the Irish Independent had his pension hit for €53 a week after the tax officials said they had failed to take account of his state contributory pension when calculating his tax credits."

DubArk

Godge wrote: »

115,000 people avoiding tax for years and years forcing the compliant PAYE earners to have to make up the difference. I grow more and more ashamed of the ordinary Irish person's attitude to paying their fair taxes every day.

You obviously didn’t read my post correctly. My parents have through both there working lives always paid their taxes in full and my Mother has always been completely honest to the revenue. It was only a few years ago that they had a complete review of her contributions and till I get a chance to further examine the letter I can’t determine exactly where the problem lies. My post was in regard to older people who will be distressed by their lack of understanding, in regard to the letter. She is a woman of a certain age and can become stressed very easily over matters that she finds difficult to grasp. My comments were in regard to the lack of sensitivity that was shown when putting the letters together considering the target group.
My advice to you would be take your head out of your fundamental orifice and quit the trolling.

SerialComplaint

DubArk wrote: »

You obviously didn’t read my post correctly. My parents have through both there working lives always paid their taxes in full and my Mother has always been completely honest to the revenue. It was only a few years ago that they had a complete review of her contributions and till I get a chance to further examine the letter I can’t determine exactly where the problem lies.

It would be great if you could post the actual wording of the letter, once you get your hands on it.

Godge

DubArk wrote: »

You obviously didn’t read my post correctly. My parents have through both there working lives always paid their taxes in full and my Mother has always been completely honest to the revenue. It was only a few years ago that they had a complete review of her contributions and till I get a chance to further examine the letter I can’t determine exactly where the problem lies. My post was in regard to older people who will be distressed by their lack of understanding, in regard to the letter. She is a woman of a certain age and can become stressed very easily over matters that she finds difficult to grasp. My comments were in regard to the lack of sensitivity that was shown when putting the letters together considering the target group.
.

I haven't seen the exact content of the letter, neither have you as your earlier post was about having spoken to your mother about it.

Revenue, like all public sector organisations are legally obliged not to discriminate (age is one of the nine grounds that they must not discriminate on) and therefore have to treat all taxpayers the same. The target group was people who have avoided tax. So the same treatment must apply whether they are pensioners or whether they are property developers.

I am of the view that anyone who is suspected of avoiding tax should get a hard-hitting letter from Revenue. The onus should be on the taxpayer to prove compliance. Sorry if that upsets you but the country is broke.

Don't forget that Sean Quinn's family are in the courts claiming they didn't understand that the loans they signed for would have to be repaid. They are not the first to claim that. Should a potential lack of understanding be used as an excuse not to pay tax due?

Remove yourself from your legitimate immediate concern for your mother and when you have calmed down from the emotions, consider the general principles of how a revenue-collecting system should operate.

BTW, I have elderly parents too (late 70s), and I am sure that they have got this letter as well.

antoobrien

mathepac wrote: »

Does anyone remember the PPARS fiasco? A simple payroll and personnel records management system for the HSE that after several schedule and budget overruns had its implementation stopped to avoid further cost over-runs.

Yeah, we studied that and pulse when I was in college as examples of what not to do (often more enlightening that what we should do). That's what happens when you don't get proper requirements - any software engineer who can spell their job title can tell you that.

cyclopath2001

sarumite wrote: »

I was reading from this article

http://www.independent.ie/business/personal-finance/pensions/taxman-to-target-one-in-four-pensioners-following-blunder-2981768.html

"One pensioner spoken to by the Irish Independent had his pension hit for €53 a week after the tax officials said they had failed to take account of his state contributory pension when calculating his tax credits."

But, that's the Irish Independent you're quoting and they're quoting a distressed pensioner who's quoting 'tax officials'. The Indo doesn't do facts very well, so be careful there.

Thoie

Godge wrote: »

Should a potential lack of understanding be used as an excuse not to pay tax due?

No, it shouldn't, but I think it should be recognised that the majority of this 115,000 were not criminal masterminds deliberately avoiding tax. It seems that the tone of the letter has caused an amount of stress on a bunch of people, while the Tax Commissioner has said that the full analysis hasn't been done yet. He's now coming out to clarify that the actual tax liability will be quite modest in a lot of cases.

jmayo

mathepac wrote: »

Does anyone remember the PPARS fiasco? A simple payroll and personnel records management system for the HSE that after several schedule and budget overruns had its implementation stopped to avoid further cost over-runs.

People who know little if anything about work-design and organisation-design try to implement both via software and it always fails.

Problem no1 with that was they tried to match the software to all the variants of payment methods employed within one single body, the HSE.
The payments methods should have been overhauled first.

Also it didn't help that some organisations/people were making huge wads of dosh out of the whole thing and as shure as hell they were problably kick backs somewhere.

If you want to see how dysfunctional the adoption of IT systems is within the public sector check out the planning sections of the country council websites.

Go from one local authority website to another and you find that the planning enquiry sections are often totally different.

That means that somebody was employed either directly or indirectly to develop individual sites whereas one system should have been developed and roled out countrywide at much lesser cost.
We are only a nation of 4 odd million FFS.

Sorry for dragging off topic.

As regards topic I think anyone that milked the system should be punished, but someone that inadvertently strayed a little should be given leeway.