O Siochain (Inspector of Taxes) v Neenan
| Jurisdiction | Ireland |
| Judge | Mr Justice Smyth |
| Judgment Date | 04 April 1997 |
| Neutral Citation | [1997] IEHC 58 |
| Docket Number | No 28R/1996 |
| Court | High Court |
| Date | 04 April 1997 |
[1997] IEHC 58
THE HIGH COURT
BETWEEN
AND
Citations:
SOCIAL WELFARE ACT 1952 S 27(2)
SOCIAL WELFARE ACT 1976 S18(1)
SOCIAL WELFARE (CONSOLIDATION) ACT 1981 S95
SOCIAL WELFARE ACT 1982 S2
SOCIAL WELFARE (CONSOLIDATION) ACT 1981 SCHED 2
SOCIAL WELFARE (NORMAL RESIDENCE) REGS 1986 SI 376/1986 RULE 10
SOCIAL WELFARE (CONSOLIDATION) ACT 1981 S94
O COINDEALBHAN (INSPECTOR OF TAXES) V O'CARROLL 1989 IR 229
CHAMBERS V FAHY 1931 IR 17
BENNION ON STATUTORY INTERORETATION 2ED 361
CAPE BRANDY SYNDICATE V IRC 1921 1 KB 64
MCGRATH V MCDERMOTT 1988 IR 258
FINANCE ACT 1992 S15
FINANCE ACT 1995 S10
YATES (INSPECTOR OF TAXES) V STARKEY 1951 CH 465, 1951 TLR 661
SOCIAL WELFARE (CONSOLIDATION) ACT 1981 S92
Synopsis:
Revenue
Increase in Widow's Social Welfare Contributory Pension granted in respect of qualified children pursuant to s.95, Social Welfare (Consolidation) Act, 1981; whether increase classified as income of widow for income tax purposes Held: Increase not income of widow; monies paid on basis that they would be laid out for child's benefit High Court: Smyth J. 04/04/1997) - [1999] 1 IR 533 - [1997] 2 ILRM 451
O'Siochain (Inspector of Taxes) v. Neenan
The matter comes before the Court by way of Case Stated dated 22nd January, 1996 from Appeal Commissioner C.V.B. Diggin. The point at issue is whether the increase in the Widow's Social Welfare Contributory Pension granted in respect of qualified children was, for income tax purposes, the income of the widow.
The Respondent has been a widow since 1989 and has had five qualified children who reside with her whose births range over the years 1976 to 1987. The Respondent is a Secondary School Teacher employed by the Department of Education and is paid a salary from which income tax is deducted under P.A.Y.E. In the year ended 5th April, 1990 the Respondent received a widow's (contributory) social welfare pension totalling £6,482.10 from the Department of Social Welfare. The pension of £6,482.10 consisted of an amount of £2,704.50 in respect of the Respondent and £3,777.60 by way of increase thereto, in respect of the Respondent's five dependant children. The Inspector of Taxes by Notice of Assessment dated 26th February, 1991 assessed the Respondent on the full amount of the pension, viz. £6,482.10.
The assessment was appealed on 27th February, 1991, the ground of the appeal being that the widow's (contributory) social welfare pension was overstated by £3.778.00
Section 27(2) of the Social Welfare Act,1952provides as follows:-
"(2) The weekly rate of a widow's (contributory) pension shall be increased by the amount set out in column 4 (of Part 1 of the Third Schedule to this Act) in respect of a qualified child or each of two qualified children who normally resides or reside with the beneficiary and who-"
(a) normally resides with her or the husband immediately before the death of the husband, or
(b) being a child or step-child, or children or step-children, of the husband, became normally resident with her subsequent to the death of her husband".
The provisions aforesaid were amended by Section 18(1) of the Social Welfare Act,1976which increased the weekly rate of a widow's (contributory) pension and extended the rate of benefit where there were more than two qualified children.
Matters were put on a more broad based footing by the provisions of Section 95 of the Social Welfare (Consolidation) Act,1981which reads:-
2 "95(1) The weekly rate of widow's (contributory) pension shall be increased by the amount set out at column ( 4) or (5) of Part I of the Second Schedule in respect of each qualified child who normally resides with the beneficiary.
(2) The weekly rate of widow's (contributory) pension, in the case of a person who has attained pensionable age, shall be increased by the amount set at column 6 (of Part I of the Second Schedule) for any period during which-
(i) the beneficiary is so incapacitated as to require full-time care and attention,
(ii) there is residing with the beneficiary for the purpose of providing that care and attention a prescribed relative of the beneficiary, and
(iii) such conditions as may be prescribed are fulfilled.
(3) The weekly rate of widow's (contributory) pension shall be increased by the amount set out in column (7) of Part I of the Second Schedule where the person entitled to the pension has attained pensionable age and is living alone".
Section 2 of the Social Welfare Act,1982amended by substitution the Act of 1952 and the Second Schedule to the Act of 1981 for Schedule A to the Act of 1982, clause (9) of which reads:-
"(9) Section 95 of the principal Act is hereby amended by the substitution of the following subsection for subsection (1): "
(i) the weekly rate of widow's (contributory) pension shall be increased by the appropriate amounts set out in column (4), (4a), ( 5) or(5a) of Part I of the Second Schedule in respect of each qualified child who normally resides with the beneficiary".
Finally the Social Welfare (Normal Residence) Regulations, 1986 (No S.I.376 of 1986) provides that increases in respect of child dependants are paid to the person with whom the child is regarded as residing in accordance with the rules set out in the Regulations. Rule 10 of the Regulations provides that:-
"If one parent dies, a qualified child should be regarded as normally residing with the other parent provided that that parent is maintaining the child."
Counsel for the Inspector of Taxes submitted that by reason of the distinction between the definition of the word"beneficiary" meaning a person entitled to benefit as defined by Section 2 of the Act of 1981, and "qualified child" as in Section 92 of the same Act, the widow not the qualified child is to be considered properly as the person to benefit. Furthermore, that Section 92 expressly records the title to the pension in unambiguous terms thus-
"92-(1) Subject to this Act a widow shall be entitled to a widow's (contributory) pension .........."
Allied to this concept of entitlement, reference was made to Section 93 dealing with the condition for receipt of benefit and emphasis was laid on the expressionrate of widow's (contributory) pension in Sections 94 and 95 of the Act of 1981 as clearly indicating that the element(s) of any additional sum(s) to the basic widow's (contributory) pension were for...
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