Looking for advice! Sick pay Tax?

[jarvis]

In 2006 my wife was sick from work for 4 months, during this time she received full pay, less social welfare entitlement. She was claimimg disability benefit for the duration.
So effectively she was no worse off than before she became ill.

Last week,we received a communication from revenue (balancing statement) saying we owe €730.80 because we underpaid. It states €1740 of income from disabiliy benefit, and this is apparently what we didn't pay tax on!!!

Are we supposed to pay tax on this?
Should the employer have accounted for it in her pay slip?

We rang revenue but they were as useful as a chocolate tea pot and very rude.

Any advice?

Thanks in advance.

 

[oysterman]

"Illness benefit" - as it's described on tax return forms - is paid gross and is taxable.

 

[Deas]

Thie issue here is that Revenue are assuming that the benefit was claimed in excess of the salary, whereas in this case your wife paid the company back the amount and was taxed as normal on her full earnings. You should get you wife to contact her HR/Payroll to seek confirmation that this actually occured and produce the evidence for Revenue. She should also contact Revenue to confirm same and advise she will follow up with details.

In tax terms, the first 6 weeks of disability benefit are tax free and thereafter it is taxable; however the employer should know this and would have acted accordingly.