§ Mr. Rookerasked the Chancellor of the Exchequer what would be the cost of relieving that part of the social security contribution made for retirement pension from income tax.
§ Mr. Robert SheldonI shall let my hon. Friend have a reply as soon as possible.
§ Mr. Corbettasked the Chancellor of the Exchequer for what reason people in receipt of index-linked Post Office retirement pensions have been required from 5th April to pay higher rates of tax on a pension increase which does not come into force until November; to what other categories of occupational pensioners this applies; what is the estimated number of people affected; what is the average amount of extra tax per week involved; and whether he will make a statement.
§ Mr. Robert SheldonI shall let my hon. Friend have a reply as soon as possible.
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Mr. Wm. Rossasked the Chancellor of the Exchequer what would be the cost to the Revenue if old-age and retirement pensions up to the value of current rates of supplementary benefit for comparable persons below pension age were to be ignored in arriving at the sums of income tax payable by such pensions.
§ Mr. Robert Sheldon, pursuant to his reply [Official Report, 17th April 1978], gave the following information:
To exempt from tax the value of national insurance retirement pensions up to the supplementary benefit level, on the assumption that the personal and age allowances were also retained, would cost about £500 million in 1978–79.
However, the personal tax allowances proposed for 1978–79 are higher on a weekly basis than the current long- or short-term householder rates of supplementary benefit. Pensions are therefore not taxed if they are at or below supplementary benefit, levels. It follows also that to replace the personal allowances pensioners by allowances based on supplementary benefit rates would lead to an increase in tax paid by pensioners.