Revenue's eBrief No. 13/12 notes that, Revenue have, on foot of pension information which they received from the Department of Social Protection (DSP), sent letters to each individual concerned. However, Chartered Accountants Ireland have confirmed with Revenue that no new batches of letters have issued from Revenue on these matters since 1 January of this year.

As part of the ongoing exchange of information arrangements between the Department of Social Protection (DSP) and Revenue, Revenue received information from the DSP of long-term pension payment details covering the State pension, the Transition pension (paid to people aged between 65 and 66), Widow's/Widower's/Surviving Civil Partner's and Invalidity pensions. This information has been updated into Revenue's records and PAYE tax credits and rate bands for 2012 have been adjusted for some taxpayers accordingly. In eBrief No. 13/12 Revenue also advises that they will pre-populate the ROS 2011 Form 11 with DSP pensions and income data in May 2012.

Briefly, if someone receiving a DSP pension has no other sources of income, they will not be liable for income tax on the DSP pension. However, if an individual also has an additional source of income, like an occupational pension from a former employer, they may be liable to tax on the DSP pension. To collect the tax due from a PAYE taxpayer Revenue will reduce their annual PAYE tax credits and rate band entitlements.

The FAQs, which are published as part of Revenue's guidance note, deal with the tax treatment of DSP pensions, the collection of the tax due and also the taxation of other social protection payments.

Revenue's guidance note “Updating of Revenue Records on Department of Social Protection (DSP) Pensioners” is available from http://www.revenue.ie/en/personal/dsp-pensions.html