# SCSB Calculation and Maternity Benefit



## bensboys (19 May 2014)

Hello All,

I will be made redundant within the next 3 months and will be availing of the SCSB for calculating my tax exemption for my ex-gratia redundancy payment.

As part of this calcualtion revenue will be looking at average annual remuneration for the last 36 months. During that time I was on maternity leave for 6 months where my emplyer topped up my salary on top of my maternity benefit.

Can the maternity benefit be included in the average annual remuneration? 

Thanks,


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## Deas (19 May 2014)

My understanding is yes, as you received your normal salary for the period so it would count as remuneration in the normal course.


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## bensboys (20 May 2014)

Thanks for your response, I have spoken to revenue over the phone and the stated that maternity is a state benefit and should not be included in the value for average remuneration. 

I stated that I felt that this was unfair as I was been penalised for taking maternity leave during the 3 years prior to my redundancy and asked if there was anywhere I could go to for further clarification. The answer I was given was a definitive "No"


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## Nige (20 May 2014)

I would argue that, for the period of your maternity leave, you were not in your employers' "service" and so, in computing your average emoluments for the last 36 months of service, you cut out the maternity leave period and go back a further six months.


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## bensboys (21 May 2014)

Nige said:


> I would argue that, for the period of your maternity leave, you were not in your employers' "service" and so, in computing your average emoluments for the last 36 months of service, you cut out the maternity leave period and go back a further six months.



I considered this and revenue informed me as long as there was any payment received from the company during the 36 month timeframe those months are included as part of the 36 month total. I also availed of unpaid maternity leave and in that situation and they will allow me to go back the additional time that I was on unpaid leave.

I guess I was hoping that somebody else here mat have directly dealt with this situation and had a positive outcome.


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## Sophrosyne (21 May 2014)

Hi Bensboys,

According to the Taxes Consolidation Act, 1997, Schedule 3, SCSB is calculated on "emoluments from the office or employment". This anything paid by your employer, such as pay, overtime, bonuses, etc. 

I don't like to be the bearer of bad news, but Revenue are correct. Maternity Benefit is not an emolument paid by your employer.


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## Nige (21 May 2014)

Schedule 3 refers to the emoluments for the last three years' of service - so the question remains are emoluments paid while on maternity leave related to a period of "service"?


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## bensboys (21 May 2014)

Sophrosyne said:


> Hi Bensboys,
> 
> According to the Taxes Consolidation Act, 1997, Schedule 3, SCSB is calculated on "emoluments from the office or employment". This anything paid by your employer, such as pay, overtime, bonuses, etc.
> 
> I don't like to be the bearer of bad news, but Revenue are correct. Maternity Benefit is not an emolument paid by your employer.


 


Nige said:


> Schedule 3 refers to the emoluments for the last three years' of service - so the question remains are emoluments paid while on maternity leave related to a period of "service"?


 
Thanks guys, as sophrosyne stated above is the response that I have been receiving from revenue.
Although I can understand where they are coming from it strikes me as "discrimatory" to treat employees who availed of maternity leave within 3 years of redundancy.


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## Sophrosyne (21 May 2014)

Maternity Leave does not constitute a break in the continuity of service. 

www.welfare.ie/.../Redundancy-Payments-Frequently-Asked-Questions.aspx
However, as Bensboys has indicated, the three year period can be rolled back for the period of unpaid leave.


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## Nige (22 May 2014)

For redundancy purposes it is not a break in service but as the phrase "service" is neither defined in the Taxes Acts nor linked to the redundancy legislation, it may be interpreted differently for the SCSB.   appears to suggest as much.


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## bensboys (22 May 2014)

Thanks Nige, Is it possible to challenge revenue on this and if so what is the best way to go about this?


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## mandelbrot (22 May 2014)

bensboys said:


> Thanks Nige, Is it possible to challenge revenue on this and if so what is the best way to go about this?



What's to challenge? They paid you during your maternity leave, so clearly it's a period of paid service, how could it be anything else, or what else do you argue it should be classified as?


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## bensboys (22 May 2014)

mandelbrot said:


> What's to challenge? They paid you during your maternity leave, so clearly it's a period of paid service, how could it be anything else, or what else do you argue it should be classified as?



The challenge would be on the grounds that my tax exemption as calculated using the scsb calculation has been reduced due to the fact that I took maternity leave during the 3 years prior to redundancy. 

Is this not unfair treatment of mothers who availed of that maternity leave?


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## Sophrosyne (22 May 2014)

To put this another way …

SCSB is a relief from *the income tax charged* on payments made in connection with the loss of an employment.

Since your Maternity Benefit will not be included in the calculation of your ex-gratia payment and, therefore, not subject to income tax, how are you being discriminated against?


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## mandelbrot (22 May 2014)

bensboys said:


> The challenge would be on the grounds that my tax exemption as calculated using the scsb calculation has been reduced due to the fact that I took maternity leave during the 3 years prior to redundancy.
> 
> Is this not unfair treatment of mothers who availed of that maternity leave?



No more so than it's discrimination against someone who took paid sick leave and had their illness benefit mandated to the employer, or someone who chose to not do overtime, or cut down to a shorter working week in order to suit their lifestyle.


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## Sophrosyne (23 May 2014)

+ 1


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## bensboys (24 May 2014)

Sophrosyne said:


> To put this another way …
> 
> SCSB is a relief from *the income tax charged* on payments made in connection with the loss of an employment.
> 
> Since your Maternity Benefit will not be included in the calculation of your ex-gratia payment and, therefore, not subject to income tax, how are you being discriminated against?



Fair enough although it will be interesting to see if this will be factored in in future since maternity benefit has become taxable.

Thanks for the info guys trying to maximise the tax exemption as much as possible.


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## advice pls (25 May 2014)

You could look at it another way in that you already received a tax exemption on the amount as the top up was taxed more favourably due to the state benefit being tax free at the time.


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## bensboys (25 May 2014)

advice pls said:


> You could look at it another way in that you already received a tax exemption on the amount as the top up was taxed more favourably due to the state benefit being tax free at the time.




Very true trying to squeeze as much as I possibly can out of it


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## Charley (3 Apr 2017)

Old thread but does anyone know if unpaid maternity leave can be included in 36 mths calculation for SCSB


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## JoeRoberts (4 Apr 2017)

Unpaid maternity is excluded from the 36 months so roll back equivalent period before the 36 months and use earnings from then.


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