Income Tax Amendment Act (No 4) 1986

This commentary item was published in Public Information Bulletin Volume 156, November/December 1986

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Alteration to Taxation Reform Package

On 18 November, the Parliamentary Under-Secretary for Finance, Mr Trevor de Cleene, and the Minister of Social Welfare, Mrs Ann Hercus, issued a statement on proposed changes to the Taxation Reform Package introduced on 1 October 1986.

The effects of that statement are:

1. Transitional Tax Allowance (TTA)
   • The definition of "full-time earner" will be amended to reduce the minimum number of hours worked during a week from 30 hours to 20 hours.
   • It should be noted that in order to qualify for the TTA, a full-time earner must not fall under any of the conclusion clauses (a) to (e) of the definition of "qualifying person" contrary in section 50C(1) of the Income Tax Act 1976. (PIB 151 page 7 also refers).
2. Beneficiary Access to Debates
   • In order to prevent persons who receive an income-tested benefit or a specified war pension and who have some minimal amount of earnings in the first six months of this year from claiming the maximum amount of either the Principal Income Earner Rebate(PIER) or family rebate against the tax calculated in their benefit income, the amount of rebate such persons can claim in the 1986/87 year will be limited to the difference between the tax assessed and the PAYE deductions on the benefit income.

Both amendments will be enacted by way of supplementary order paper to the Taxation Reform (No. 2) Bill 1986 which is currently before the Finance and Expenditure Select Committee and due to be passed before Christmas.

In dealing with any enquiries it should be noted that the amendments have no effect until the enacting legislation has been passed.