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Taxation of social welfare payments - Illness Benefit

  1. Overview
  2. Taxing IB, Occupational Injury Benefit and Partial Capacity Benefit
  3. Illness Benefit included in employee's Revenue Payroll Notification (RPN)
  4. How to pay an employee who is receiving Illness Benefit?

Taxing IB, Occupational Injury Benefit and Partial Capacity Benefit

Since 1 January 2018 employers should not amend employees’ pay in order to collect the tax due on Illness Benefit (IB) payments. Revenue now collect any tax due on these payments by reducing the employee’s tax credits and rate bands by the amount of the IB received. IB payments are not liable to Universal Social Charge (USC) or Pay Related Social Insurance (PRSI). The employee's USC rate bands will not be amended. 

The Department of Social Protection (DSP) no longer issue IB notifications to employers. Revenue now receive details of the claim and issue an amended Revenue Payroll Notification to the employer.

Before 01 January 2018, the DSP notified employers of the taxable amounts of IB the employee received, and the date these payments started. 

Next: Illness Benefit included in employee's Revenue Payroll Notification (RPN)

Published: 12 February 2024 Print this page

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