Income Tax – Maternity Benefit, Adoptive Benefit and Health & Safety Benefit

Income Tax. Personal Tax on benefits. PAYE Employees

Taxation of Maternity Benefit, Adoptive Benefit and Health & Safety Benefit

From 1st July 2013 the following payments by the Department of Social Protection will be liable in full Income Tax.  Revenue published a guidance material leaflet on the Income Tax treatment of a range of benefits for PAYE taxpayers.

From 1^st July 2013 the following payments by Department of Social Protection will be taxable in full:

1. Maternity Benefit
2. Adoptive Benefit
3. Health & Safety Benefit

It is important to remember that USC and PRSI will not apply to these benefits.

How will this new system work?

The Department of Social Protection, as part of an ongoing exchange of information with Revenue, will provide Revenue with all payment details to update the tax payers’ records.

Individuals who pay their tax through the PAYE system will, where possible, have their annual tax credits and cut-off point reduced by the amount of these payments so as to avoid any underpayment of taxes at the year end.

Employers and pension providers will be advised of the adjusted tax credits and cut-off points on employer tax credit certificates.

It is important to keep in mind that DSP payments for periods up to 1st July 2013 remain exempt from Income Tax, USC and PRSI.

For further information, please click: https://www.revenue.ie/en/jobs-and-pensions/taxation-of-social-welfare-payments/maternity-adoptive-health-safety-benefits.aspx

Please be aware that the information contained in this article is of a general nature.  It is not intended to address specific circumstances in relation to any individual or entity. All reasonable efforts have been made by Accounts Advice Centre to provide accurate and up-to-date information, however, there can be no guarantee that such information is accurate on the date it is received or that it will continue to remain so. This information should not be acted upon without full and comprehensive, specialist professional tax advice.