Most Irish citizens are unaware that certain social welfare payments would be taxed
DUBLIN: The majority of social welfare recipients in Ireland are completely unaware that their payments are taxed in Ireland. In short, all income in Ireland is taxed, despite the fact that certain social benefits are provided.
An individual’s actual tax rate is determined by their personal circumstances as well as the tax reliefs and credits they claim. The fact that the Universal Social Charge and PRSI are not levied on social welfare payments is a plus.
According to Citizens Information, there are 25 different payments that people in Ireland are taxed on:
Adoptive Benefit
Blind Pension
Carer’s Allowance
Carer’s Benefit
Death Benefit Pension
Deserted Wife’s Benefit
Deserted Wife’s Allowance
Disablement Pension (except for child increases)
Health and Safety Benefit
Illness Benefit (except for child increases)
Invalidity Pension
Incapacity Supplement (except for child increases)
Injury Benefit (except for child increases)
Jobseeker’s Benefit (JB) and Jobseeker’s Benefit (Self-Employed) (first €13 per week excluded)
Maternity Benefit
One-Parent Family Payment
Partial Capacity Benefit (except for child increases)
Paternity Benefit
Parent’s Benefit
Short-Term Enterprise Allowance (first €13 per week excluded)
State Pension (Contributory)
State Pension (Non-Contributory)
Widow’s, Widower’s or Surviving Civil Partner’s (Contributory) Pension
Widow’s, Widower’s or Surviving Civil Partner’s (Non-Contributory) Pension
COVID-19 Pandemic Unemployment Payment (PUP)
Other payments made under such schemes, such as the Short-Term Enterprise Allowance, the Community Employment scheme, Rural Social Scheme (RSS), Tús, Gateway and the Community Services Programme, are taxable as well.
If a person receives welfare benefits and has another source of income, they will be required to pay taxes. Here, an individual’s taxable social welfare payment and other income are combined, and the total amount is then taxed. Also, if an individual has a social security pension from abroad, it is also taxable.
As listed above, specific social welfare payments in Ireland, such as Maternity Benefit, Paternity Benefit, Adoptive Benefit and Health and Safety Benefit are taxable in Ireland. As the actual rate of tax to pay will depend on an individual’s personal circumstances and the tax reliefs and tax credits they claim, the Department of Social Protection will pay Maternity Benefit without any deduction of tax. But it will inform Revenue of the amount of maternity benefit to be considered for income tax purposes.
Circumstances in which you do not have to pay taxes
Some people may not be required to pay tax on their welfare payments, even if is taxable. If a person’s only source of income is the amount received from the country’s social benefits, they will not be required to pay tax because their tax liability would not surpass their tax credits. This is because when an individual receives a social welfare payment in addition to their regular tax credits, they will receive additional tax credits.
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