As the Deputy is aware the majority of social welfare payments are reckonable as income for tax purposes. Apart from the specific payments mentioned in the followng paragraph, all taxable social welfare payments fall within the provisions of Schedule E of the Taxes Consolidation Act, 1997, previously the Income Tax Act, 1967, and before that, the Income Tax Act, 1918. Consequently, the majority of social welfare payments have been taxable in the State from the date on which the payments were introduced.
Disability benefit — DB — and occupational injury benefit became reckonable as income for tax purposes with effect from 6 April 1993, and unemployment benefit — UB — and pay-related benefit with effect from 6 April 1994. The normal practice is that taxation applies in full to a payment from the date from which it becomes liable to tax. However, in order to improve the position of those adversely affected by extending taxation to DB and UB, certain changes have since been introduced. To assist families, the child dependant additions payable with both DB and UB were exempted from income tax from 6 April 1995. The first £10 per week of UB was disregarded for tax purposes also from 6 April 1995. In the context of Partnership 2000 it was agreed that the first three weeks of DB in a tax year would be exempt from tax from 6 April 1997 and the first six weeks from 6 April 1998.
Some social welfare payments are not liable to tax. The following payments are not taxable: