Taxation of social welfare payments
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. Universal Social Charge is not payable on social welfare payments.
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. No tax is deducted at source by the Department of Social Protection. All enquiries about your tax liability should be addressed to your local tax office.
Budget 2013
Maternity Benefit will be taxable from 1 July 2013 for all claimants. Universal Social Charge will not be payable. (1 July 2013)
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 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. For higher incomes, the standard rate cut off point will also be reduced. 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.
Increases for Qualified Children payable with Jobseeker's Benefit, Illness Benefit and the Occupational Injuries Scheme (Injury Benefit, Disablement Pension and Incapacity Supplement) are 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.
Child Benefit is not taxable.
Guardian's payments, which are payments made for the benefit of an orphan, are taxable. However a guardian's payment is regarded as the beneficial property of the child and is therefore assessable against their income (if any), not against the income of the person getting the guardian's payment.
Social assistance payments
| Blind Pension | Taxable |
| Carer's Allowance | Taxable |
| Disability Allowance | Not taxable |
| Deserted Wife’s Allowance | Taxable |
| Farm Assist | Not taxable |
| Family Income Supplement | Not taxable |
| Guardian's Payment (Non-Contributory) | Taxable (on child's income) |
| Jobseeker's Allowance | Not taxable |
| One-Parent Family Payment | Taxable |
| Pre-Retirement Allowance | Not taxable |
| Supplementary Welfare Allowance | Not taxable |
| State Pension (Non-Contributory) | Taxable |
| Widow’s, Widower’s or Surviving Civil Partner's (Non-Contributory) Pension | Taxable |
Social insurance payments
| Adoptive Benefit | Not taxable |
| Bereavement Grant | Not taxable |
| Carer's Benefit | Taxable |
| Constant Attendance Allowance (payable with Disablement Pension) | Taxable |
| Deserted Wife's Benefit | Taxable |
| Death Benefit Pension | Taxable |
| Disablement Pension | Taxable (except for child increases) |
| Disablement Gratuity (lump sum payment) | Not taxable |
| Guardian's Payment (Contributory) | Taxable (on child's income) |
| Health and Safety Benefit | Not taxable |
| Illness Benefit | Taxable (except for child increases) |
| Invalidity Pension | Taxable |
| Incapacity Supplement | Taxable (except for child increases) |
| Injury Benefit | Taxable (except for child increases) |
| Jobseeker's Benefit and Short-Term Enterprise Allowance | Taxable (first €13 per week excluded) |
| Jobseeker's Benefit (paid to systematic short-term workers) | Not taxable |
| Maternity Benefit | Not taxable |
| State Pension (Transition) | Taxable |
| State Pension (Contributory) | Taxable |
| Widow’s, Widower’s or Surviving Civil Partner's (Contributory) Pension | Taxable |
Other schemes
The Back to Work Allowance, Back to Work Enterprise Allowance and Back to Education Allowance are not taxable. Payments made by the VEC under the Vocational Training Opportunities Scheme (VTOS) are not taxable.
Payments made under the Rural Social Scheme (RSS), TÚS and the Community Services Programme are 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, Fuel Allowance and benefits under the Household Benefits Scheme are not normally taxed.
Language
Related Documents
- Widow's, Widower's or Surviving Civil Partner's (Contributory)
Pension
A Widow's, Widower's or Surviving Civil Partner's contributory pension (formerly the Widow's/Widower's (Contributory) Pension) and related social welfare benefits may be payable if either the deceased person or their spouse/civil partner has enough PRSI contributions. - Taxation of pensions
A comprehensive explanation of how pensions are taxed in Ireland. - List of codes for social welfare payments
For administrative purposes, the Department of Social Protection has assigned various code numbers to social welfare payments. Find out what these codes are where to find them.
Contact Us
If you have a question relating to this topic you can contact the Citizens Information Phone Service on 0761 07 4000 (Monday to Friday, 9am to 8pm) or you can visit your local Citizens Information Centre.