4.16.1 Maternity Benefit

Maternity Benefit is not liable for PRSI and levies. PRSI and levies are payable only on the difference between the amount of benefit cheque and normal gross pay.

4.16.2 Disability and Occupational Injuries Benefits - Revenue Commissioners Requirements

(a) With effect from 6 April, 1995, the taxation rules applying to Disability Benefit were changed to exempt Child Dependant additions (i.e. the additional payments made to claimants in respect of qualifying children).

(b) Disability Benefit is not liable for PRSI and levies. PRSI and levies are liable only on difference between amount of benefit cheque and normal gross pay.

(c) Disability Benefit payable for the first 36 days in the tax year 1998-99, and the following years, is exempt from tax. Sundays and the three “waiting days” for which Disability Benefit is not payable are not included in calculating the 36 days for which exemption is due.

(d) Income, inclusive of disability benefit, should be returned on tax documents, e.g., P45, P60, and P35. It need not be distinguished separately on any of these documents except on Part I of P45.

The Revenue Commissioners have issued notices to employers outlining the procedures for various methods of implementing these requirements through different types of payroll systems. (See Taxation of Disability Benefit for 1998-99 and Following Years through the PAYE System-Issued by the Revenue Commissioners).

The following example is suitable for use in schools where a computerised payroll system is used.

(i) On receipt of benefit cheque the employee should give the cheque to the employer.

(ii) The full amount of the benefit cheque should be deducted from gross pay.

(iii) Payroll basis should be changed to “Period 1 Basis” and the basic personal rate of disability benefit(i.e. cheque amount less child dependant additions) should be deducted from tax free allowance for the current week.

(iv) The annual tax free allowance should be amended accordingly.

(v) The Department of Social, Community and Family Affairs should notify employers of the amount of Disability Benefit paid to employees where that amount is not the personal rate.

(vi) Disability Benefit amount to be included in “income from other employment”.

(vii) Retain a copy of benefit cheque on sick-leave file and return the benefit cheque along with the part-pay cheque to the employee.