Worksheet: One-Parent Family Payment and income from work

Worksheet

The purpose of this worksheet is to help you, if you are getting One-Parent Family Payment (OPF), to work out how taking up a job will affect your weekly income.

Step 1: Find how income from work will affect your One-Parent Family Payment

Find your assessable income from work (see Note 1)                   €_______

Assessable income is your gross income less PRSI, health levy, pension contributions and trade union subscriptions.

Note 1  

Take away €146.50 from your weekly earnings (if earnings are below €146.50 you will keep your full OFP).  Half of your weekly earnings between €146.50 and €425 is assessed as income. If you are in receipt of OPF and your earnings exceed €425, you will get a transitional half-rate payment for six months.

New rate of One-Parent Family Payment                                       €_______

To find your new rate of OPF check SW 19 Social Welfare Rates of Payment booklet to get the amount of OPF payable with your means.

Step 2: Find your new total gross weekly income

Your total weekly income is your new rate of One-Parent Family Payment and your income from work before tax.

New rate of One-Parent Family Payment (see Step 1 above)         €_______
Add Gross weekly income from work                                               €_______
Total Gross Weekly Income                                                             €_______

Step 3: Find your new total net weekly income

Your total weekly income is your new rate of One-Parent Family Payment and your income from work after tax.  From this calculation you will be able to find out if you are financially better off.

Gross weekly income       €_______
Less income levy - see Note 2 below                                          €_______
Less PRSI paid each week - see Note 2 below                                  €_______
Less Income Tax paid each week - see Note 4 below                   €_______     
Total Net Income                                                     €_______
Remember, you will have to pay child-minding and travel costs out of your net income

Note 2

You must pay the income levy if you don't have a medical card, or your income (not including your One-Parent Family Payment) is more than €15,028 per year (€289 per week). If your income is above the threshold, you pay the levy on the full amount of your income.

The income levy is 2% of gross income up to €1,443 per week. Your One-Parent Family Payment is not included in gross income for the income levy. Find out more about the income levy.

Note 3
You pay PRSI on your job income only, not on your One-Parent Family Payment.  If you earn less than €352 a week you do not pay any PRSI.  (If your job income is over €352 you pay 4% on any earnings over €127 per week).You only pay PRSI for the weeks you work.

Note 4

You pay income tax (PAYE) on all your income: that is your Total Gross Income (see Step 2 above).

To calculate your Income Tax paid each week, multiply Total Gross Income by 20% to get the gross amount of income tax payable each week.

Total gross income by 20%                                                             €_______  
Less Weekly Tax Credit (see below for calculation)                           €105.58    
Total Income Tax paid each week                                                   €______

Tax Credit for 2010
Personal Tax Credit                        €1,830
Add One Parent Family Tax Credit   €1,830
Add PAYE/Employee Tax Credit       €1,830
Total Tax Credit                             €5,490

Divide by 52 to give the weekly tax credit of €105.58

Extra Benefits

Other Tax Free Allowances
You may be able to claim Mortgage Interest Relief and relief on health and tax relief on medical expences .

If you are a tenant in private-rented accommodation, you may be able to claim some tax relief for rent paid. 

If you are a widowed parent you can claim a Widowed Parent Tax Credit. 

Revenue Job Assist provides an additional tax free allowance for unemployed people and lone parents returning to work. This tax allowance is an alternative to existing employment incentives such as Back To Work Allowance. 

You can get more information about tax credits and reliefs. 

Secondary Benefits
If you qualify for Job Assist then you may also keep your medical card for 3 years from the date you return to work and retain other secondary benefits such as fuel allowance etc for 3 years, provided your income is less than €317.43 weekly. Income from FIS is not taken into account for €317.43 income limit

If you do not qualify for the additional tax allowances (for example, because you were not getting OFP for 12 months or more) then you will be re-assessed on all the secondary benefits you might have had, according to the income guidelines set out for each one.

You should keep your medical card for 3 years from the date you take up employment – check with your local Health Service Executive Area.

Rent Supplement / Mortgage Interest Supplement

You can get a 'Household Income Disregard', this is a certain amount of your household income which is not taken into account. To calculate your Household Income Disregard first take the SWA rate for your household circumstances from your total income. €75 of any ‘additional household income' income above the SWA rate applicable to your household circumstances is also not taken into account. 25% of ‘additional household income’ over €75 is not taken into account. There is no upper limit on the amount that can be disregarded

Family Income Supplement (FIS)
You can claim FIS if you are working at least 19 hours per week, or 38 hours per fortnight, and your income falls below the income threshold for your family size. Family Income Supplement is not taxable and does not affect secondary benefits.