THE fees of part time students are to be allowed against income tax under an amendment to the Finance Bill. The concession, introduced by the Minister for Finance, Mr Quinn, will be confined to students doing undergraduate courses for the first time.

Under another amendment moved by Mr Quinn and accepted on the report stage of the Bill, the ceiling on income that can be contributed tax free to pension funds is to be raised from 15 to 20 per cent for over 55 year olds.

Mr Quinn said that at present over 53,000 taxpayers availed of the relief, but only 12 per cent of them used the full 15 per cent.

It was estimated his amendment would cost the exchequer £2 million a year, and bring the total cost of this relief to £42 million. The whole question of tax treatment of pensions was under review between his Department and the Irish Association of Pension Funds.

He could not accept an amendment by the Fianna Fail finance spokesman, Mr Charlie McCreevy, which would allow up to 50 per cent relief for over 55 year olds. Mr Quinn said it would cost an additional £17 million.

Mr McCreevy welcomed the amendment which, he said, wad the first to be made by a Minister in this area. Pensions would have to be adjusted to take account of changes in work practices and the ageing population. The social welfare pension was not keeping pace as a proportion of average industrial wages and was likely to come under increasing pressure as the number of elderly increased.

The PD spokesman on finance, Mr Michael McDowell, said the Minister should ask the Revenue Commissioners to advertise the change, as the 15 per cent maximum relief was deeply ingrained in the minds of people who should be encouraged to make better provision for their pensions.

The Bill, which gives statutory effect to the January Budget, passed its final stage by 65 votes to 52.