5 weeks of paid leave, no tax; or 5 weeks of unpaid leave, no tax ; or 5 weeks of maternity leave, no tax? Each would have a different outcome.
Should benefits be taxed?
- Thread starter faketales
- Start date
5 weeks of paid leave, no tax; or 5 weeks of unpaid leave, no tax ; or 5 weeks of maternity leave, no tax? Each would have a different outcome.
Parents leave. No pay from my employer. Just state benefit.
Once you have sufficient income to utilise your cut off and tax credits, then all income above these balances are taxed at your marginal rate. So yes, you get net of about half the parents leave benefit. As you get net of half your annual.bonus etc. Same principle. Enjoy the 18 years of tax free child benefit though, it's far in excess of any tax you paid on parents leave. And I'm not certain if they are automatically applied while in recipt of rhe benefit, but make sure you got PRSI credits for the period.
They should be, but no harm in double checking that they appear on one's PRSI contribution record on myWelfare eventually (e.g. next year when it has been updated for this year).
Parent's Benefit
Parent’s Benefit is a payment for people who are on parent’s leave from work and covered by social insurance (PRSI). Each parent gets 9 weeks payment in the first 2 years after the child’s birth or adoption.
If Parent's Benefit was your only income for those 5 weeks, then you can't have been taxed on it simply because the amount that you received each week would have been lower than your weekly tax credits.
I suspect that your confusion may be because you don't understand how Revenue handle it! Have a look at the example here:
How DSP payments are taxed
This page explans how Department of Social Protection payments are taxed
www.revenue.ie