Wednesday, 27 February 2013

Questions (80)

Willie O'Dea

Question:

80. Deputy Willie O'Dea asked the Minister for Finance the estimated number of women affected by changes to maternity benefit in budget 2013, broken down by county; the estimated amount saved; and if he will make a statement on the matter. [4050/13]

View answer

Written answers (Question to Finance)

I am informed by the Revenue Commissioners that the expected yield from the taxation of Maternity Benefit payments, which will take effect from 1 July 2013, is estimated at €15 million in 2013 and €40 million in a full year. Such payments will remain exempt from Universal Social Charge. The statistical basis of this estimate was the estimated aggregate amount of the benefit likely to be paid and the proportion of that amount expected to yield income tax, and not the expected numbers of recipients. Accordingly, a precise number of recipients that will be liable to income tax on the benefit is not available. However, I understand that the Department of Social Protection have estimated that the average weekly maternity benefit recipients in 2013 to be 22,800, including those who will not have an increased liability to income tax.

A breakdown of the numbers of recipients on a county basis is not available.

In addition, I would point out that as a result of Maternity Benefit payments becoming liable to income tax for all claimants with effect from 1 July 2013, three possible tax outcomes could arise:-

- 1. An individual will pay no income tax on their maternity benefit payment as their tax credits will be sufficient to reduce their tax liability to zero.

- 2. An individual will pay income tax on their maternity benefit payments at the standard rate.

- 3. An individual will pay income tax on their maternity benefit payments at the higher rate.

Different Cases

Maternity Benefit

Tax liability on Maternity Benefit Payment

Case 1 No tax due

€6,812

Nil

Case 2 (taxed at 20%)

€6,812

€1,362

Case 3 (taxed at 41%)

€6,812

€2,793