Taxation of DEASP payments

Illness Benefit, Occupational Injury Benefit and Partial Capacity Benefit

Illness Benefit (IB), Occupational Injury Benefit and Partial Capacity Benefit are paid from the Department of Employment Affairs and Social Protection (DEASP). These benefits are liable to Income Tax (IT). They are not liable to Universal Social Charge (USC) or Pay Related Social Insurance (PRSI).

Child dependant increases (additional payments made to claimants for qualifying children) exempt from tax, USC and PRSI.

In this section, references to IB include Occupational Injury Benefit and Partial Capacity Benefit.

How IB is taxed

Since 1 January 2019:

  • The DEASP tell Revenue the amount of your taxable IB.
  • Any tax due from your IB is collected by reducing your tax credits and rate band. This will be shown on your Tax Credit Certificate (TCC).
  • Revenue will make an amended Revenue Payroll Notification (RPN) available to your employer so they can collect any tax due.

While you are on sick leave, if your employer:

  • pays you - then you must tell them the weekly amount of your IB
  • does not pay you - then you do not need to tell them the weekly amount of your IB.

In both circumstances your employer will use the latest RPN issued to them by Revenue.

Reviewing your tax for 2018

The amount of taxable IB claimed during the year 2018 will be shown on your online Form 12.

You can update the IB figure if you either:

  • disagree with this figure
  • have since repaid some or all of the IB claim.

It is important that the figure you submit on your Form 12 is the correct taxable amount.

Information on how to calculate the taxable amount can be found on the DEASP website. If you have any queries about your IB claim please contact DEASP directly.

Next: Taxation of Maternity, Paternity, Adoptive, and Health and Safety Benefits