Dan White: Keep a close eye on your payslips as the Revenue is grabbing every last cent
Dan White answer your financial questions.
I LOOK after wages for a group of companies and the following issue has come to light – could you please highlight it in your column as it is seriously impacting some of the most vulnerable people – single parents who are doing their best by working hard.
The Department of Social Protection has issued the Revenue Commissioners for the first time with a list of recipients of One Parent Allowance. The Revenue Commissioners have in turn reduced all such recipient’ tax credits by €1,650 per year.
This amount can be reinstated and reimbursed back to January 1 to working people by filling in a form OP1 (which confirms that you are not co-habiting and that the child/ children are living with you) and sending it back to Revenue Commissioners.
This form can be downloaded from the Revenue Commissioners’ website www.revenue.ie.
Neither the Revenue nor the Department of Social Protection have informed these people of the change and most people are assuming that the huge decrease in their takehome pay is due to the new Universal Social Charge.
This is affecting all recipients of One Parent Allowance who work and can cost them up to €31.70 per week, depending on their income.
It would be no harm either to highlight what people should be paying in USC each week; ie: €3.86 (2pc) on the first €193, €4.60 on the next €114 (4pc) and 7pc on the balance of gross pay.
I have spoken with two people who were charged the full 7pc on total gross pay as the people who processed their wages didn’t know how to calculate the USC!
I must admit to not having known about this problem until I read June's excellent letter.
The letter highlights the importance for all taxpayers, not just recipients of One Parent Allowance, to check their most recent payslips extremely closely.
They must examine all of their deductions in great detail. With the Government determined to grab every cent that isn't nailed down, taxpayers need to be on their guard.
I CURRENTLY have my mortgage with AIB on their variable rate of 3.09pc with a LTV (loan-to-value) of less than 50pc. After reading your article in the Herald on Monday, January 24 in relation to the person with their mortgage in Permanent TSB, I am deciding on whether to fix my mortgage or hold off for another few months.
AIB currently offer a oneyear fixed-rate of 3.59pc, two-year fixed at 3.69pc and three-year fixed at 3.89pc.
I am aware that the talk is of banks withdrawing the fixed-rate option and raising their variable rates.
I am obviously at the best value rate now but how likely is that AIB will increase its variable rates by a full 1pc?
It is only if this happens that it would begin to make sense for me to move to a three-year fixed-rate of 3.89pc.
Shane had better get a move on if he wants to secure an affordable fixed-rate mortgage.
Last week Permanent TSB announced that it was increasing its variable mortgage interest rate by 1pc and scrapping fixed-rate mortgages altogether.
The ink was barely dry on the Permo announcement when another bank, Ulster Bank, announced that it was pushing up its variable mortgage interest rate by 0.5pc.
Now that the Permo and Ulster Bank have made their move, expect the other banks to follow suit, and soon.
While Ulster hasn't scrapped fixed-rate mortgages, at least not yet, it is clear that fixed-rate mortgages are doomed.
If Shane wants to fix his mortgage rate, he has very little time left in which to do so. If he doesn't move very quickly it will almost certainly be too late.