I move:
(1) THAT section 126 of the Taxes Consolidation Act 1997 (No. 39 of 1997), in relation to the tax treatment of certain benefits payable under the Social Welfare Acts, shall be amended as respects the year of assessment 2012 and each subsequent year of assessment by deleting subsection (5).
(2) IT is hereby declared that it is expedient in the public interest that this Resolution shall have statutory effect under the provisions of the Provisional Collection of Taxes Act 1927 (No. 7 of 1927).
The first 36 days or six weeks of illness benefit and occupational injury benefit are currently disregarded for tax purposes. In some circumstances, for example where an employee goes sick and continues to be paid by the employer, the employee can be better off financially on sick leave than when working.
This amendment seeks to remove the tax exemption that applies to the first six weeks of illness benefit and occupational injury benefit in each tax year in order to avoid the situation where the take-home pay of an employee in some cases is greater on sick leave than when he or she is working. This measure is also designed to reduce the cost of employee sick absence to the Exchequer. The yield from this proposal is difficult to quantify, however, a tentative estimate of the yield is €13 million in a full year.
