A petition on the Parliamentary website has called on the DWP and Labour Party government to make a massive change.A petition on the Parliamentary website has called on the DWP and Labour Party government to make a massive change.A petition on the Parliamentary website has called on the DWP and Labour Party government to make a massive change.

The Department for Work and Pensions has been told to make the state pension EXEMPT from income tax. A petition on the Parliamentary website has called on the DWP and Labour Party government to make a massive change.

“We want the government to make the state pension tax exempt and not impact the tax threshold,” it states. “We think it is wrong to tax the state pension.” The petition has 6,815 signatures and at 10,000 signatures is required to get a government response.

At 10,000 signatures, the government will respond to this petition and at 100,000 signatures, this petition will be considered for debate in Parliament.

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The petition was created by David Bresnahan and has plenty of time to hit its target, with an August end date. It means the DWP could be forced to speak out on the issue and clarify its stance.

On its website, the DWP explains its current rules and says: “The state pension is liable to income tax. Historically governments have taken the view that state pensions, as well as other ‘earnings-replacement benefits’, should be taxed this way.

“The state pension is paid by the Department for Work and Pensions (DWP) without any tax being deducted first. To ensure the right amount of tax is paid on someone’s total income – that is, their private or occupational pension plus their state pension – their pension provider takes the state pension into account when calculating how much tax to deduct under PAYE.

“Generally pensioners whose only income is the state pension will not have to pay any income tax in practice. This is because their annual income will fall below the personal tax allowance – the amount of income taxpayers may receive tax-free.

“Recently there have been some concerns that an increasiing number of pensioners in this position may find that they are liable to pay some tax on their state pension.”

Successive Governments have believed that a pension, whether State or occupational, is a form of income like earnings and as such should be taxable, subject to any age related personal allowances.

Exempting the state pension from income tax would therefore only benefit the better off pensioners; the Government instead continues to focus resources on the poorest pensioners, it states.