Calculation of the average salary used in the SCSB.

Demps

Frequent Poster
Messages
62
Hi Folks,

I have applied for voluntary redundancy and have the following question in relation to the calculation of the average salary used in the SCSB.

It relates to the tax free amount whcih can be calculated using the Standard Capital Superannuation Benefit (SCSB). The formula is

AXB/15 - L where A = 1 years average remunaeration for the last 3 year, B=number of complete years service and L = tax free pension lump sum received or receivable.

My question is by law does it have to be the last 3 years to calculate the average. My problem is that I have been out on 2 maternity leaves in last 3 years where I took all the unpaid leave which is now affecting what I was paid over those years.

Is this set in stone or is there any discretion that company can apply.

Thanks for any replies.
 

Yaffle

Registered User
Messages
40
I was in a similar situation but I didn't know the SCSB formula I was just told the amount. I wasn't really too bothered about the tax free lump sum as I believe I can get most of it back from Top Slicing Relief (TSR) which is based on your average tax % rate over the previous 3 years. As these were the years I took maternity and unpaid leave I hope to get most of the tax back anyway. The only difference is you can't claim TSR until after the tax year.

http://www.revenue.ie/revsearch/search.jsp
http://www.revenue.ie/en/tax/it/reliefs/lump-sum-payments.html
 

Demps

Frequent Poster
Messages
62
Thanks for the reply Yaffle - knew about top slicing but want to get as much upfront as possible rather than claiming back in tax.

Spent the weekend going through the redundancy acts '67 and 2003 - sad or what with the weather and still none the wiser. Any legal eagles know is the average renumeration legally bound to be calculated on the last 3 years or is there any wiggle room??
 
D

dealgan

Guest
http://www.revenue.ie/en/about/foi/precedents/scsb-average-emoluments-for-last-3-years.html

36 months may be extended and may apply in your case:

10/01/1994

Query Calculation of SCSB where the employee has less than 3 years paid service in the immediate period, prior to the "relevant date". Employee may have been on career break, etc.

Decision

To obtain the average under SCSB rules, one has to look at the emoluments of the employment for "the last 3 years of his service". The service in question is the service in the employment in respect of which the termination payment is being made. Where gaps in the service exist, it will be necessary to go back further than 36 months to determine the emoluments for the last 3 years of service.
Income Tax
Schedule 3, Taxes Consolidation Act, 1997
Origin: RLS Division
File ref:IT 94 1612
 

Demps

Frequent Poster
Messages
62
Thanks dealgan

Do You think that unpaid maternity leave/parental leave would fall into this category?
 
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