Taxation of DEASP payments

Taxation of Maternity, Paternity, Adoptive, and Health and Safety Benefits

From 1 July 2013, some social welfare payments (including any increases for dependants) are liable to Income Tax (IT). These payments are:

  • Maternity Benefit
  • Adoptive Benefit
  • Health and Safety Benefit.

Your employer will not charge the following on these payments:

In the rest of this section, references to Maternity Benefit include these other benefits, as the tax treatment is similar. We will explain Paternity Benefit below separately.

How Maternity Benefit is taxed

The Department of Employment Affairs and Social Protection (DEASP) gives Revenue details of Maternity Benefit payments. If you receive Maternity Benefit and you are a Pay As You Earn (PAYE) taxpayer we collect the tax due. To do this we reduce your tax credits and rate band to take account of the payments. You can see this on your Tax Credit Certificate (TCC). We will make a revised Revenue Payroll Notification (RPN) available to your employer, showing amended total tax credits and rate bands.

Due to your employer taxing all of this Maternity Benefit, you can choose to do one of the following:

  • pay it over to their employer
  • mandate that the DEASP pays it directly to their employer
  • keep it.

Maternity Benefit claims that span two tax years

Maternity Benefit payable in Year 2 is taxed by reducing the tax credits and rate band. We do this on a 'cumulative' basis, from the beginning of Year 2. This means that we spread the tax due on the Maternity Benefit for Year 2 over the full tax year.

How Paternity Benefit is taxed

Paternity Benefit (including any increases for adult and child dependants) is liable to Income Tax (IT) but not:

The Department of Employment Affairs and Social Protection (DEASP) gives us details of Paternity Benefit payments.

If you are a  Pay As You Earn (PAYE) taxpayer we collect the tax due on Paternity Benefit. To do this we reduce your tax credits and rate band to take account of the payments. You can see this on your TCC. We will make a revised RPN available to your employer, showing amended total tax credits and rate bands.

Next: Detailed examples of taxation of payments