# maternity benefit to be taxed



## Brendan Burgess (5 Dec 2012)

not subject to USc


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## Stone (5 Dec 2012)

Hi,

I earn €90000 per year but when I am on maternity leave next year, my employer will not pay me. What rate of tax will I pay on the maternity benefit?

Thanks, Stone


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## Joe_90 (5 Dec 2012)

Presuming that the benefit is paid to employers in order to operate the taxation, you will be taxed on your regular salary up to the date of taking maternity so say you go on leave on 1 July then you will have earned €45,000 so anything above that will be subject to 41% income tax.

At a practical level you won't pay income tax on you weekly income after 1 July it's just that the amount of a refund won't be as high.


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## Brendan Burgess (5 Dec 2012)

Maternity Benefit will be taxed just like any other income - salary, dividends, pension etc.


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## Stone (5 Dec 2012)

Thanks for the replies. So basically, I'll still get the going rate of maternity benefit but when I apply for a tax refund they'll add the received maternity benefit to my PAYE income for the year and refund me less than I would have received in previous years?

Stone


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## JoeRoberts (5 Dec 2012)

This will be a cost to employers who were paying top-up maternity benefit to the employee to ensure normal net pay.


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## argentina (7 Dec 2012)

I'm kind of surprised there isn't more uproar on the issue of taxing Maternity Benefit.  The main group of people this is affecting is taxpayers who work in the non-banking private sector.
  Of my group of friends (we are all having babies at the moment), the Civil Servants, Bankers (and a few others) are unaffected by this change - they receive their full pay while on Maternity leave and the statutory is paid directly to the Employer.


Minister Noonan describes the non-taxing of maternity benefit as an 'anomaly'.  I describe it as an anomaly that taxpayers are funding the full pay of new mothers in the public/banking sector while most others don't receive top-ups from their employer and are now losing effectively half of the ‘marginal’ Social Welfare allowance.


I suppose going back to my first sentence, given this doesn’t affect public sectors employees this is probably why we are not seeing more controversy!  The Prime Time special on Wednesday night didn’t give lip service to this particular cut, but then again those in RTE wouldn't be affected.


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## xeresod (8 Dec 2012)

argentina said:


> I suppose going back to my first sentence, given this doesn’t affect public sectors employees


 

You do realise public servants pay tax? How will they not be affected?

Actually, they may be more affected than private sector workers if the public sector pension levy also applies in addition to the normal 20/41% income tax, PRSI and USC that will be applied to everyone.


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## huskerdu (8 Dec 2012)

xeresod said:


> You do realise public servants pay tax? How will they not be affected?
> 
> Actually, they may be more affected than private sector workers if the public sector pension levy also applies in addition to the normal 20/41% income tax, PRSI and USC that will be applied to everyone.




Most ( maybe all) public servants get full pay while on Maternity leave.

Currently a public servant earning 1000 a week, gets  Maternity pay of 262 a week,  and 734 pay. As Maternity pay is not taxed, her take-home is higher than normal.   Therefore this taxing does affect her, but she will now get the same take-home pay as when she is working, so will not suffer any real financial hardship. 

A private sector worker who only gets Maternity benefit of 262  a week, will now have to pay tax on it, so will get quite a bit less. 

So, it will affect private sector workers who dont get top-up pay, and not really affect public sector workers


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## huskerdu (8 Dec 2012)

Stone said:


> Thanks for the replies. So basically, I'll still get the going rate of maternity benefit but when I apply for a tax refund they'll add the received maternity benefit to my PAYE income for the year and refund me less than I would have received in previous years?
> 
> Stone



Yes, that is exactly what will happen.


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