PRSI to be levied on bank interest and other income

Q&A:I am confused. When submitting the tax return Form 11 online over the years, I always had to pay PRSI on the bank interest earned on my deposits (ie, bank interest on deposits was always liable to PRSI). I am self-employed. Can you clarify this ? Mr J C, Dublin

As you say, the budget day change to rules for PRSI on savings is no news to people who are self-employed. They have always been liable to PRSI on income from investments (including deposit accounts) under Class S. They have also been obliged to file returns. That has not been the case for PAYE workers.

Essentially, the measure announced in the budget standardises things. From 2014 onwards, everyone will have to pay PRSI on bank interest and other forms of “unearned income” such as dividend payments or rental income.

In all likelihood, they will have to file returns as well for the first time, though Revenue has yet to decide on that formally.

No exemption for stamp duty already paid

Was any exemption to the property tax introduced for those who paid high stamp duty during the boom years?

Ms M D, Dublin

No it wasn’t. Interesting that you ask though, as it was a central plank of Fine Gael pre-election commitment to voters.

At that time, they assured people who had bought property during the real bubble years of the boom that they would make provision for them – especially in the event of any property tax being introduced.

Since then, the Government has made some provision for first-time buyers who bought homes close to the peak. However, people who upgraded during that period have seen nothing to mitigate their position – and it appears now that they won’t.

People in that position have argued that they paid property tax in advance on their homes through stamp duty – some of them high five-figure sums.

However, it appears the Inter-Departmental Expert Group on proposals for a property tax advised against any measure to take account of this.

What will probably gall hard-pressed homeowners most is the way that Fine Gael has no issue with quietly dropping some commitments while asserting their word is their bond on others, such as the Croke Park accord or the “cordon sanitaire” around income tax rates.

How will medical card cut affect me?

I am a pensioner over 70 years old with a medical card. Would you please tell me the post-budget threshold for a single person?

Ms MH, Dublin

The income threshold for medical card eligibility has been reduced to €600 per week for a single person and €1,200 per week for a couple. That equates to €31,200 per annum for a single person and €62,400 for a couple.

Previously, the weekly limit was €700 for an individual and €1,400 for a couple (€36,400/ €72,800 per annum). People who lose their medical card under the new limits will be entitled to a GP-only card.

July 1st date set for new maternity tax

I am currently on maternity leave. When will the new tax on maternity benefit kick in? And what implication will this have?

Ms S D, Donegal

You should be all right as the new regime on maternity benefit will not kick in until July 1st next, when you are likely to be back at work.

It won’t be clear until the Finance Bill is published exactly how it will work, but it looks as if the tax will be levied on maternity benefit through the employer.

Until now, maternity benefit wasn’t treated as income for taxable purpose; only top-up payments made by employers were subject to PAYE and PRSI.

Can I get refund for PPI taken out in 2004-05?

I took my PPI for loans in 2004 and 2005. Can I get the refund?

Ms MM, email

Payment Protection Insurance has been the subject of mis-selling both here and in the UK. The issue has been one of the most serious scandals in consumer financial services in recent times and the Central Bank took the unusual step in October of naming six Irish institutions it had requested to review PPI policy sales. These institutions were AIB, Bank of Ireland, Permanent TSB, EBS, Ulster Bank and GE Money.

The Central Bank-mandated review goes back only as far as 2007. However, it did add that any complaints in relation to PPI policies sold before that date should be dealt with by the institutions in accordance with the 2012 Consumer Protection Code.

Essentially, the difference is that the institutions are obliged to review every policy over the last five years and the onus is on the consumer to raise issues on anything before that. If you have reason to believe you were mis-sold a policy, you should approach the institution involved – particularly if you are still doing business with them.

This column is a reader service and is not intended to replace professional advice. Please send your questions to QA, c/o Dominic Coyle, The Irish Times, 24-28 Tara Street, Dublin 2, or to dcoyle@irishtimes.com. No personal correspondence will be entered into.