The position is that Illness Benefit is a taxable source of income.
In this instance (details supplied), the taxpayer has an available Tax Credit of €2,516 for 2009. This equates to an annual income threshold of €12,580 (€12,580 × 20% = €2,516) under which no liability to income tax arises.
I am advised that Revenue records indicate that the taxpayer received Illness Benefit income of €6,503 up to 7th October 2009. If the taxpayer does not have another taxable source of income, which combined with the Illness Benefit would be in excess of the €12,580 threshold at the suggested date of return to work (2nd November 2009), no tax liability will arise at that date. On resumption of work, the taxpayer is advised to request Revenue to issue a revised Tax Credit Certificate to reflect the Illness Benefit income received up to that date.