Taxation of DEASP payments

Maternity, Paternity, Adoptive, Parent's and Health and Safety Benefits

Some social welfare payments (including any increases for dependants) are liable to Income Tax (IT). These payments are:

  • Maternity Benefit
  • Paternity Benefit
  • Adoptive Benefit
  • Parent's Benefit
  • Health and Safety Benefit.

These payments are not liable to Universal Social Charge (USC) or Pay Related Social Insurance (PRSI).

In the rest of this section, references to Maternity Benefit include these other benefits, as the tax treatment is similar. We will explain Paternity Benefit below separately.

How Maternity Benefit is taxed

The Department of Employment Affairs and Social Protection (DEASP) gives Revenue details of Maternity Benefit payments. If you receive Maternity Benefit and you are a Pay As You Earn (PAYE) taxpayer we collect the tax due. To do this we reduce your tax credits and rate band to take account of the payments. You can see this on your Tax Credit Certificate (TCC). We will make a revised Revenue Payroll Notification (RPN) available to your employer, showing amended total tax credits and rate bands.

Maternity Benefit claims that span two tax years

Maternity Benefit payable in Year 2 is taxed by reducing the tax credits and rate band. We do this on a ‘cumulative’ basis, from the beginning of Year 2. This means that we spread the tax due on the Maternity Benefit for Year 2 over the full tax year.

How Paternity Benefit is taxed

Paternity Benefit (including any increases for adult and child dependants) is liable to Income Tax (IT) but not:

The Department of Employment Affairs and Social Protection (DEASP) gives us details of Paternity Benefit payments.

If you are a Pay As You Earn (PAYE) taxpayer we collect the tax due on Paternity Benefit. To do this we reduce your tax credits and rate band to take account of the payments. You can see this on your TCC. We will make a revised RPN available to your employer, showing amended total tax credits and rate bands.

How Parent’s Benefit is taxed

Parent’s Benefit is a two week payment that can be claimed by both parents within the first year of their child’s life. It is available from 1 November 2019. Parent’s Benefit is liable for Income Tax but not:

DEASP gives us details of Parent’s Benefit payments.

If you are a Pay As You Earn (PAYE) taxpayer we collect the tax due on Parent’s Benefit. To do this we reduce your tax credits and rate band to take account of the payments. You can see this on your TCC. We will make a revised RPN available to your employer, showing amended total tax credits and rate bands.

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