I am advised by the Revenue Commissioners that in accordance with the Finance Act 2013, with effect from 1 July 2013 maternity benefit became taxable in full. Tax is not deducted 'at source' by the Department of Social Protection (DSP) on these payments. Instead, the Revenue Commissioners receive the payment details from the DSP to enable the taxpayer's annual tax credits to be reduced to take into account the maternity benefit. Thus individuals who pay their tax through the PAYE system, have their annual tax credits and standard rate cut-off point reduced by the amount of the maternity benefit payment they receive. Employers are then advised of these changes and they arrange to deduct the additional tax required over the remainder of the tax year.
The taxpayer in question was in receipt of maternity benefit from the Department of Social Protection and received a total of €2,270.61 between 1 January and 6 March 2014. Due to a technical error in Revenue, her employer received an incorrect tax credit certificate which the employer operated from the date the taxpayer recommenced work. This had the effect of the employer deducting too much tax from the taxpayer. Revenue has issued a corrected tax credit certificate and Revenue has been advised by the employer that her tax position will be corrected in her salary at the earliest opportunity. Revenue wishes to apologise to the taxpayer for this mistake and the inconvenience this has caused. If the taxpayer has further questions she may wish to contact Angela Creighton telephone: (01)8655782