Maternity Benefit Taxable from 1st July

How Strange

I rang the revenue commissioners this morning to check how my maternity benefit will be treated for tax purposes as I'll be receiving a salary top up until mid/end August.

They were very helpful and they made an adjustment to my tax credits for the amount of maternity benefit due to be paid to me from July to Oct and my employer will receive a new credit cert. The adjustment has been applied up to the end of Dec and she said I should be ok at the end of 2013 and worst case scenario I may owe about €100 in tax.

So perhaps give them a call in advance and speak to them regarding the tax especially if you're receiving a salary top up.

CuteStuff

Its disgusting that maternity benefit is being taxed. I was able to take 16 weeks unpaid because it wasn't taxed on my first. I was able to save some money. It was tight but I was able to spend 16 extra weeks at home with my baby. Future babies I am not sure I will be able to do it. This country really angers me!!!! :mad::mad::mad::mad::mad::mad::mad::mad:

ted1

CuteStuff wrote: »

Its disgusting that maternity benefit is being taxed. I was able to take 16 weeks unpaid because it wasn't taxed on my first. I was able to save some money. It was tight but I was able to spend 16 extra weeks at home with my baby. Future babies I am not sure I will be able to do it. This country really angers me!!!! :mad::mad::mad::mad::mad::mad::mad::mad:

It shouldn't affect you 16 weeks without pay will mean your earning much less and hence wil pay less tax

Oral Slang

ted1 wrote: »

It shouldn't affect you 16 weeks without pay will mean your earning much less and hence wil pay less tax

Think you're missing the point there. I'll be affected the same as CuteStuff. My job pays me for maternity leave, so I was able to save a small bit so that I could afford to take 12 weeks extra the last time, but this time there won't be extra to save. I know I'm lucky to get paid, but I knew I would be getting paid by my job, so worked my leave around it. I'm not starting maternity leave til November this time, so must check with revenue/salaries how I'll be affected.

How Strange

I don't think it's disgusting that it's now taxable income. They're just correcting an anomaly.

However I agree that it was a great way to save a little extra so you could take unpaid leave. I can't take unpaid leave this time because of it and because of other choices we made like leaving our son in crèche. Thankfully I can accrue time in lieu in my job so I worked lots of extra hours during my pregnancy so I'd have 2 weeks extra leave at the end.

It will inevitably mean that lots of mums can't take unpaid leave at the end though and that's quite sad.

LegacyUser

Forgive me if ive got this wrong, but I have just recieved my ammended tax credit certificate in the post as I am on maternity leave at the moment since mid march. So I have a 10 weeks and a few days of my maternity leave coming under the new tax. In that time I estimate i will collect around 2, 800 in benefit.

On my tax cert they have reduced my tax credits by 2, 724. Near enough the amount I am getting paid in the 10 weeks. From what I understand I will now pay 2,724 extra in tax when I go back to work? So what is the point in me collecting maternity benefit when they will take it all back anway?

When i heard they will tax it i presumed i would pay 20% on what is recieved which I worked out to be around 540 so shouldnt my tax credits be reduced by that amount?

Always number 1

How Strange wrote: »

I don't think it's disgusting that it's now taxable income. They're just correcting an anomaly.

I'm sorry but I have to disagree with you here, your entitlement to maternity benefit is based on you having paid PRSI in the previous 2 years (not 100% on this timeline)
If they are correcting anomalies surely they should be taxing social welfare payments which are in some cases paid out irrespective of any PRSI payments being made at all.
I'm sorry to digress but its something that makes me mad - hormones or not

LegacyUser

Brinkajen wrote: »

Forgive me if ive got this wrong, but I have just recieved my ammended tax credit certificate in the post as I am on maternity leave at the moment since mid march. So I have a 10 weeks and a few days of my maternity leave coming under the new tax. In that time I estimate i will collect around 2, 800 in benefit.

On my tax cert they have reduced my tax credits by 2, 724. Near enough the amount I am getting paid in the 10 weeks. From what I understand I will now pay 2,724 extra in tax when I go back to work? So what is the point in me collecting maternity benefit when they will take it all back anway?

When i heard they will tax it i presumed i would pay 20% on what is recieved which I worked out to be around 540 so shouldnt my tax credits be reduced by that amount?

I also got my amended tax cert yesterday - they've reduced my tax band by 13.6k and my tax credit by 2.7k. I started receiving mat benefit at the end of may so if it's only taxable from 1st July, I should only be taxed on 22 weeks benefit - 5.8k. Doesn't this mean that my tax band should be reduced by that amount and tax credit by 1.2k? Tried to call revenue today but typically the lines were busy!

lonestargirl

The biggest anomaly for maternity benefit occurred for those whose salary was topped up by the employer. In that case you were in net terms better off on maternity leave as the social welfare portion was not taxed.

notlongleft

It was never right that somone on maternity leave was net better off than someone coming into work and doing their job 9 - 5. Benefit should be taxed just like your normal income is taxed.

lockers55

From my understanding of how this maternity tax is going to work seems to be in reducing your tax credits while on maternity from July until you go back to work and then increasing you tax credits to what they originally where before you went on maternity leave thus only paying maternity tax while on maternity.

Scroll down and read Examples
http://www.revenue.ie/en/personal/faqs/taxation-welfare-benefits.html

LegacyUser

I'm back at work now for 6 weeks. I am on a week 1 basis. Being taxed more. Can anyone advise how long after returning to work from ml that your paying more tax. So I returned the end of April. Will it be until tax year is up

Moonbeam

Ring the revenue and talk to your payroll dept.

DSN

So it will only affect those who are getting topped up by employer (or income from another source) right? So, instead of getting a few quid extra due the mat benefit portion not being taxed you will now get the same as if you were working?

I am one of those who luckily gets it topped up & I always though it was a bit of an anomaly to be honest. Long as I am not down from what I normally get I don't feel like I have an argument in this case.

Lucuma

DSN this thread is from 2013