Maternity Benefit?

Dobbit

Hi, hope this is the right section to ask for help on this, if not mods please feel free to move me along.

I'm having some trouble working out my maternity benefit. August was my first full month off and my net pay was reduced by about 10% or a few hundred euro. I work for an American company so generally when there's a problem related to the pay of Irish workers payroll go "umm dunno, call Revenue?" instead of trying to explain it. I've a new baby and would like to not sit on hold with Revenue for ages so hopefully someone can help.

It seems that my PAYE is much higher this month than it is usually but my understanding was that the reduction in tax credits and the benefit amount would sort of cancel each other out and my pay would stay the same? The lady from payroll contacted the company in Ireland that administer our pay and they sent back this response which I don't really understand:

"She has been switched from a Normal basis to a week 1 month 1 basis. This has happened because the Department of Social welfare notify Revenue of the amount of benefit paid to the employee. Once received by Revenue, they will issue a revised Tax Credit Certificate in respect of that employee. The weekly amount of the benefit will be annualised and the employee’s bands and credits will be reduced by the annualised amount. Where the tax credit certificate is issued mid-year, it will be issued on a week 1 basis. This tax credit certificate will apply for the duration that the benefit is payable.

Maternity benefit is only subject to PAYE and is exempt from PRSI and USC. The reason her income has gone down relates to the charge in her tax bands and credits."

Sorry for the long post, anyone know what this means?

shy-tall-knight

You have been put on a Week 1 basis so as to avoid any possibility of an underpayment of income tax. At the end of the year you can review the tax you have paid by requesting a P21 balancing statement and any refund owed will be issued to you then.