Is income from an income protection insurance policy subject to income tax?

A

ajapale

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asked this question here.

Is income from an income protection insurance policy subject to Income Tax?
 
\it is. You get full tax relief on the premium and pay full taxes on the payout, in the unfortunate event of payment.
 
How is this income tax collected in the case of PAYE employee?

In the case of taxable SW benefit (after 6weeks) the employer makes the adjustment.

Is such income PRSIable?
 
ajapale said:
How is this income tax collected in the case of PAYE employee?
...Is such income PRSIable?
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company making pyts must operate PAYE. Dunno if prsi applies
 
I can't imagine PRSI would apply, since you're no longer in employment. I'll have a look at the small print of my own plan later and see if it's mentioned.
 
This situation is this, my dad was off work sick for eight weeks since 28.12.05 and received SW sick pay, (already established that SW is not reckonable for tax for first six weeks, 36 days) But he was also in receipt of Construction Industry Federation sick pay. This money was received on top of SW payments.

He's now back to work and as are most people in the building industry, has an agreed net with the employer, who grossed up his salary and pays tax prsi etc on this.

The problem now is that his employers have not paid any tax for the last four weeks. HIs employer says, their accountants do the wages and will find out why this is so, but believe that its because he hasn't worked for the first two months of year.

Should I contact the revenue and get his sick benefit coded into his notice of tax credits????

HELP
 
I just checked my own (Irish Life) plan, but all it says is that 'any benefits payable will be taxed under the PAYE procedure in the normal way'. But, as stated, I don't see how Pay-Related Social Insurance could be deducted from benefits paid out of an insurance policy..(?)
 
DrMoriarty said:
I just checked my own (Irish Life) plan, but all it says is that 'any benefits payable will be taxed under the PAYE procedure in the normal way'. But, as stated, I don't see how Pay-Related Social Insurance could be deducted from benefits paid out of an insurance policy..(?)
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Its not an insurance policy, its a sickness benefit, paid out Construction Industry Federation Policy, the contributions are paid as part of a pension plan.

I know the title doesn't really state my question very well, but I didnt start the thread, & I kinda fear Clubman and the rules, so darent start another one
 
deem said:
Its not an insurance policy, its a sickness benefit, paid out Construction Industry Federation Policy
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My own income continuance plan is also a 'members' scheme' (IFUT, in my case), but ultimately it's an insurance policy underwritten by Irish Life (and separate from the HMCA [broken link removed]). I still think you probably wouldn't have to pay PRSI on benefits, just income tax.

I can't access the relevant section of the CIF website, but maybe you should contact them and ask for clarification?
 
DrMoriarty said:
....... I still think you probably wouldn't have to pay PRSI on benefits, just income tax.

I can't access the relevant section of the CIF website, but maybe you should contact them and ask for clarification?
Click to expand...

Thanks again for that, and contacting the revenue and CIF, would seem like a good suggestion, however, those calls were the source of my confusion. I assumed that the payments would be liable to PAYE, as the social welfare sick benefit is after six weeks(36 days), and the revenue, told me it was, and to get details from CIF of amounts paid, however, when I rang CIF I was told it was not taxable.

Thus a Question was born? I never actually thought of the PRSI until someone else mentioned it.
 
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