Experts from The Irish Timesand PriceWaterhouseCoopers answered readers' questions during a QA on the Budget on www.irishtimes.com yesterday. Here is a selection of these.
The full list of questions and answers can be found at www.irishtimes.com/budget.
Q:Has the maximum tax relief on pensions been reduced to the standard rate of tax, or can higher rate tax payers still avail of tax relief of 41 per cent on their pension contributions? Amanda, Ireland.
A:The tax relief available on pension contributions/AVCs is still available at an individuals marginal rate of tax, ie 41 per cent if you are a higher rate taxpayer. But what has changed is that the income limit on which one can claim tax relief has been reduced to €150,000 per annum, down from €275,000.
As such, if you earn less than €150,000 per annum, you will continue to receive the same tax relief you always did.
Q:What will the eligibility level for an over 70s medical card be for a single person? Mark Dugdale, Ireland.
A:The detail of the eligibility for a medical card have yet to be announced - although there is talk that the gross weekly income limit may be set at €650 for a single applicant or €1,300 for a married applicant.
However, what is know is that there will now be a means test applied to medical card claimants (this would appear to extend to existing medical card holders who are aged over 70).
If the individual fails the medical card means test, they may still be eligible for a doctor's card (again means tested) and, failing that, be entitled to receive a cash grant of €400 (if single) and €800 (if married and your spouse is over 70).
Q:Regarding the 1 per cent levy. If a married couple say are earning €60,000 and €50,000 respectively and are separately assessed, they will pay 1 per cent of the 60K and 50K separately which is €1,100; however if they are jointly assessed, will they pay the 1 per cent for the first €100,100 and then 2 per cent on the €9,900? Kevin Phelan, Ireland
A:It would appear that the 1 per cent levy will apply in any given week/month in which an individual earns up to €1,925pw/€8,342pm. It appears that individualisation applies to this levy so that as a jointly assessed couple, you can both earn up to €100,100 each before hitting the 2 per cent levy.
Q:What is the tax incentive for cycling to work? Barry Judge, Ireland
A:The Minister introduced an incentive whereby employers may provide bikes and safety equipment up to the value of €1,000 per individual on a tax free basis, where employees agree to use the bikes to cycle to work.
The exemption may only apply once in five years for any employee. It will be up to employers to decide if they want to provide this benefit.