Information
All income in Ireland is generally subject to taxation. Your social welfare payment may or may not be deemed taxable but even if your social welfare payment is taxable, you may not actually have to pay tax on it.
If you are getting a social welfare payment you will get a PAYE Tax Credit in addition to your normal tax credits. This means, if a social welfare payment is your only source of income you may not pay tax because your tax liability does not exceed your tax credits. The PAYE Tax Credit is given to the person claiming the social welfare payment and not to the adult dependant.
However, an adult dependant can qualify for a PAYE Tax Credit if the Increase for a Qualified Adult (IQA) is paid directly to the adult dependant. In this case, the IQA becomes the dependant’s income and they are entitled to the tax credit.
Social welfare payment and another income
If you have a social welfare payment and another source of income, you may have to pay tax. In this case, your taxable social welfare payment and your other income are added together. You are taxed on the total amount. There is no mechanism for taxing social welfare pensions at source (before it is paid to you). Your non-social welfare income determines how tax due is paid.
For example, you are getting a social welfare payment and an occupational pension. Your occupational pension is taxed through the Pay-As-You-Earn (PAYE) system in the same way as a wage or salary. This means that you get your tax credits in the normal way. In order to tax your social welfare pension, your standard rate cut off point is reduced by the amount of the social welfare pension, and your annual tax credits are reduced by the tax liability on your social welfare pension. You then effectively pay tax on both the pensions, but it is collected from the occupational pension. The technical term for this is coding in of credits. The same arrangement applies if you have income from a job and a social welfare pension. If your social welfare pension was not coded in, you would have to pay tax as a self-employed person and in a lump sum by 31 October each year.
If your other source of income is not taxed on the PAYE system, for example, you have an occupational pension from abroad or you have investment income, then you are classed as a self employed person and your tax is payable annually by 31 October each year.
Social welfare or social security pensions from abroad
If you have a social security pension from abroad, it is also generally taxable in Ireland. The tax is payable annually unless you have a source of income that is subject to PAYE. Certain foreign pensions that would be exempt from tax if you were resident in the country paying the pension, are however also exempt from tax in Ireland.
Rules
Irish social welfare payments
Jobseeker's Benefit is generally taxable, but the first €13 each week is exempt from tax. Jobseeker's Benefit payable to short-time workers is not taxable. The Child Dependant Increase payable with Jobseeker's Benefit is also not taxable.
Illness Benefit is not taxable for the first 6 weeks and the Child Dependant Increase is not taxable.
Other than the cases above, if your social welfare payment is taxable, any increase in your payment for your adult dependant and child dependants is also taxable.
Social assistance payments
| Jobseeker's Assistance | Not taxable |
| Pre-Retirement Allowance | Not taxable |
| Farm Assist | Not taxable |
| Widow’s/Widower’s Non Contributory Pension | Taxable |
| Guardian's Payment Non Contributory | Taxable |
| Carer's Allowance | Taxable |
| Supplementary Welfare Allowance | Not taxable |
| State Pension (Non-Contributory) | Taxable |
| Blind Pension | Taxable |
| Disability Allowance | Not taxable |
| Deserted Wife’s Allowance | Taxable |
| One-Parent Family Payment | Taxable |
Social insurance payments
| Illness Benefit | Taxable (first six weeks excluded) |
| Maternity Benefit | Not taxable |
| Adoptive Benefit | Not taxable |
| Health and Safety Benefit | Not taxable |
| Invalidity Pension | Taxable |
| State Pension (Transition) | Taxable |
| Jobseeker's Benefit | Taxable (first €13 per week excluded) |
| Jobseeker's Benefit (paid to systematic short-term workers) | Not taxable |
| Widow’s/Widower’s Contributory Pension | Taxable |
| Guardian's Payment Contributory | Taxable |
| Deserted Wife's Benefit | Taxable |
| Carer's Benefit | Taxable |
| State Pension (Contributory) | Taxable |
| Disablement Pension | Taxable |
| Constant Attendance Allowance (payable with Disablement Pension) | Taxable |
| Injury Benefit | Taxable |
| Death Benefit Pension | Taxable |
Other schemes
The Back to Work Allowance and Back to Work Enterprise Allowance are not taxable.
You may get an increase in your social welfare payment, if you are living alone. If your social welfare payment is taxable, then the Living Alone Increase is taxable. If your social welfare payment is not taxable, then your Living Alone Increase is not taxable.
Domiciliary Care Allowance and Fuel Allowance are not normally taxed.
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If you have a question relating to this topic you can contact the Citizens Information Phone Service on lo-call 1890 777 121* or on +353 (0) 21 452 1600 (Monday to Friday, 9am to 9pm) or you can visit your local Citizens Information Centre. *Please note that the rates charged for the use of 1890 numbers may vary among different service providers.
