# Tax credits reduced after claiming Jobseekers Benefit?



## ruthkell (15 May 2008)

Hi, Just been on to tax office and am more confused now than before.  Was claiming jobseekers until last month and now employed.  My employer has told me my credits are very low for a single person.  I thought if I was getting benefit €197.80 per week that my weekly allocation of credits (€70.50) would cover any tax due and now that I am employed my tax credits would be normal every week(€70.50). 
Why would Revenue reduce my weekly credits??


----------



## ClubMan (15 May 2008)

Can you post more details please - e.g. when did you become unemployed, what was on your 2008 statement of tax credits, what is on your revised one etc.? If you became unemployed since the start of this tax year did you file any _P50 _claims for refunds of tax?


----------



## ruthkell (16 May 2008)

HI Clubman,  I have been unemployed from January up to 2 weeks ago and claiming Jobseekers Benefit. On payroll last 2 weeks and have €59.61 tax credits which revenue said are reduced credits. Have not filed for any tax returns this year as I have not paid any tax only in the last 2 weeks. I should have just standard tax credits for single person (no extra tax reliefs for mortgage, refuse etc)


----------



## ClubMan (16 May 2008)

What are the figures on (a) your original statement of tax credits and (b) your new/updated statement of tax credits?


----------



## ruthkell (16 May 2008)

Clubman, never got an original tax cert, had to request the current one?? What are the standard credits for a single person with no extra's? Maybe €59.61 a week is normal, although the girl in tax office told me my credits were reduced??


----------



## ClubMan (16 May 2008)

ruthkell said:


> Clubman, never got an original tax cert, had to request the current one??


You never got a 2008 statement of tax credits? Sounds odd. Why was that?


> What are the standard credits for a single person with no extra's?


See here:

[broken link removed]

and maybe here

www.taxcalc.eu


----------



## ruthkell (16 May 2008)

Clubman,

Probably got no cert because I was not employed until now.  Was getting benefit. Checked calculator and my credits look normal. Don't know why revenue said they were reduced because of benefit.  Thanks for the guide, nothing to worry about afterall. Thanks again!


----------



## MissMoney (16 May 2008)

Hi Ruth,
The standard single person's weekly credit is just over €70. Your credits have been reduced as Jobseekers is a taxeable source of income, so now that you're working again you have to pay 20% of it back.
Hope this helps.


----------



## Black Sheep (16 May 2008)

I can only assume the OP is being taxed on a week1/month1  basis as seems to be the norm following JB.

Otherwise her tax credits should have been increased to take account of the unused portions while on JB


----------



## MissMoney (17 May 2008)

Week 1/Month 1 basis can be applied where there is a large gap in employments and it is unclear if the person has had any other sources of income that year (among other situations). If you have a gap and you inform Revenue you were in receipt of DSFA income during that gap, it is coded in against the current employment's tax credits thus reducing them.


----------



## Black Sheep (18 May 2008)

Don't understand that logic. Why woul JB be coded against your future earnings if you are no longer on benefit and had sufficient credits to cover it


----------



## MissMoney (19 May 2008)

If the credits and rate band have been reduced then they were not high enough to cover the JB. If the credits and rate band could cover the JB then a cummulative cert would have been issued.


----------



## Black Sheep (20 May 2008)

Still don't get it. Taxable JB is €197.80 - €13 = €184.80 @ 20% = €37. Don't understand how tax credit of €70 doesn't cover that


----------



## MissMoney (20 May 2008)

Black Sheep said:


> Still don't get it. Taxable JB is €197.80 - €13 = €184.80 @ 20% = €37. Don't understand how tax credit of €70 doesn't cover that


 
€37 is taken from the €70 and you're left with the balance of credits carried forward. Otherwise how will the JB be taxed?


----------



## Black Sheep (20 May 2008)

Isnt't that €33 unused tax credit per week carried forward since Jan 1st say 13weeks to end of March. Returns to work April 1st with €429 cumulitive credits +€70 for every week forward


----------



## MissMoney (20 May 2008)

Black Sheep said:


> Isnt't that €33 unused tax credit per week carried forward since Jan 1st say 13weeks to end of March.


 
That's what I already said: €37 is taken from the €70 and you're left with the balance of credits carried forward.



Black Sheep said:


> Returns to work April 1st with €429 cumulitive credits +€70 for every week forward


 
Yes, as I said the credits have been reduced (€429 as opposed to €910) as the JB has been taxed. Future PAYE earnings may not be taxed (depending on the amount of income) for the first few weeks/months due to the cummulation of credits.


----------

