The Supreme Court decision concerning tax on a widow's contributory social welfare pension was criticised last night by the Association of Secondary Teachers Ireland (ASTI), which said it was unfair to widows, and by the Fine Gael spokesman on social affairs, Mr Jim O'Keeffe TD.
The Supreme Court said she was liable for tax on the entire amount, reversing a High Court decision which had supported the view of a Revenue Appeal Commissioner that Mrs Bridget Neenan was not liable for income tax on pension increases paid in respect of her children.
The union expressed regret that the decision did not uphold the previous rulings of the Revenue Appeals Commission and the High Court. "The ASTI feels that the decision is unfair to widows and imposes an unnecessary burden of taxation on them," it said in a statement. It also called for amendments to the relevant legislation to exempt "the orphan's portion of pension" from taxation.
Mr O'Keeffe called on the Government to respond swiftly to the decision. "The £17 per week payment per child is little enough to feed and clothe a child. Clawing back a portion of this is unfair," he said.
"There is an anomaly in that the children's portion of some public service pensions are exempt. Surely it is just and fair that the same exemption should apply to widows with children who are dependent on social welfare."
The full implications of the decision were not possible to quantify last night, but a Department of Social, Community and Family Affairs source stressed that the court's ruling did not affect the status quo in terms of how such cases are treated for tax purposes.
It is understood the Revenue Commissioners have always considered pension payments made in respect of children to be part of a widow's income for tax purposes.
The High Court decision allowing such payments to be regarded as the children's property, given in trust to the mother, was never implemented as the Commissioners appealed that ruling to the Supreme Court.
