Maternity benefit tax after it finishes

heybuddy

Hi, someone might help me here...my wife has just finished maternity leave.. she was getting maternity benefit and had her wages reduced while on leave. Think it's called top up...now she paid same tax all the time but all of a sudden she has taken a huge hit in wages and is getting taxed almost 40 percent... this can't be right can it? Her weekly wage is 600..gross. but net she is now getting 400... compared to always getting around 500...???? Does this make sense.

jlm29

It doesn’t make sense really. If anything, if her wages have been reduced for a period, I would have thought she would have a couple of generous weeks wages where she would pay less tax. Unless you were using her tax credits or anything while she was off. She should contact her payroll dept, or maybe revenue

Cakerbaker

Was she getting her maternity benefit paid to herself and getting a reduced paycheck from work (so 2 separate payments) or did she have her maternity benefit paid to work and receive one normal wage payment?

If it’s the first, her work would probably only have calculated her tax on the lower amount they were paying her so she would owe tax on the 6 months of maternity benefit which was paid separately.

heybuddy

Cakerbaker wrote: »

Was she getting her maternity benefit paid to herself and getting a reduced paycheck from work (so 2 separate payments) or did she have her maternity benefit paid to work and receive one normal wage payment?

If it’s the first, her work would probably only have calculated her tax on the lower amount they were paying her so she would owe tax on the 6 months of maternity benefit which was paid separately.

It's the first one but her tax remained the same no reduction

margo321

i think they keep her on week 1 basis with reduced credit until the following year. Give Revenue a ring.

Cakerbaker

Probably best to query it with payroll and revenue in that case. Definitely sounds like something is being calculated incorrectly.

Millem

margo321 wrote: »

i think they keep her on week 1 basis with reduced credit until the following year. Give Revenue a ring.

Yes they did this to me! They reduce your bands and tax credit by the amount of maternity benefit you received:(

Gatica

If you get her Tax Credit certificate, you should be able to see if she has a PAYE underpayment, which is reducing her tax credits.
I had to pay tax on all the Maternity Benefit, as work only deducted it on the top-up portion. The tax to be paid back was taken off my tax credits.

splinter65

Maternity Benefit is taxable

jlm29

splinter65 wrote: »

Maternity Benefit is taxable

The OP said that his OH paid the same tax as normal while on maternity benefit. Her wages shouldn’t be dramatically reduced now if that’s the case

Cash_Q

Sorry to butt in but how can I avoid this down the line? My maternity leave starts in October and will end the first week of April. The thoughts of spending 8 months paying higher taxes than I'm used to is very worrying, especially that I'll be paying for childcare for the first time. If I were to ring revenue in advance can they adjust anything? I'd nearly prefer to pay a lump sum in taxes due on the maternity payment so I'd know where I stand week to week next year..

Millem

Cash_Q wrote: »

Sorry to butt in but how can I avoid this down the line? My maternity leave starts in October and will end the first week of April. The thoughts of spending 8 months paying higher taxes than I'm used to is very worrying, especially that I'll be paying for childcare for the first time. If I were to ring revenue in advance can they adjust anything? I'd nearly prefer to pay a lump sum in taxes due on the maternity payment so I'd know where I stand week to week next year..

No I don’t think so!
I was lucky as I finished maternity leave in february so they haven’t reduced my wages that much! I am still down more than €50 net a pay cheque.

seamus

margo321 wrote: »

i think they keep her on week 1 basis with reduced credit until the following year. Give Revenue a ring.

This. Happened to me on paternity leave too. Revenue reissue the tax credits statement. They claimed for me it's avoid a "huge drop in wages when you go back to work", but realistically it makes it easier to collect the taxable portion of your maternity benefit

Cash_Q wrote: »

Sorry to butt in but how can I avoid this down the line? My maternity leave starts in October and will end the first week of April. The thoughts of spending 8 months paying higher taxes than I'm used to is very worrying, especially that I'll be paying for childcare for the first time. If I were to ring revenue in advance can they adjust anything? I'd nearly prefer to pay a lump sum in taxes due on the maternity payment so I'd know where I stand week to week next year..

Yeah, maybe ring Revenue and see if they can flag your record so that this week 1 basis doesn't get sent to your employer.

If they can't do that, then basically you'll just have to ring Revenue when you go back to work and ask them to revert your tax position to the normal basis. Your first month back might be a little tight, but it should then readjust in the next.

natc

Had this been an issue for anyone where their employer receives the benefit and they get paid their weekly wage as normal?

That’s the way my maternity leave will work but I’m curious if it’ll affect my pay when I start back after the leave finishes.

Gatica

I've seen that as an option on the form, so it seems like they'll probably tax you as normal (if they're receiving your benefit, then they know how much to tax you on it for Revenue). Therefore, I don't think it should affect you after, unless they get their tax calculations wrong.

natc

Gatica wrote: »

I've seen that as an option on the form, so it seems like they'll probably tax you as normal (if they're receiving your benefit, then they know how much to tax you on it for Revenue). Therefore, I don't think it should affect you after, unless they get their tax calculations wrong.

That’s good, I really couldn’t afford to take a big hit on my earnings when I return to work.

My sister in law is having a nightmare at the moment after going back to work. She cut her maternity leave short because she couldn’t afford to live off the benefit and now she’s getting crucified on tax. She informed revenue, her employer and social welfare beforehand and filed all necessary paperwork and she’s worse off now...

Gatica

Unfortunately the state just doesn't care whether you can afford to have children, childcare or if you gotta quit work because you cannot afford it. They're always talking about equal rights in the work-place, but there hasn't been enough done to ensure both parents can afford to go back to work if they so choose.

Cash_Q

Millem wrote:

No I don’t think so! I was lucky as I finished maternity leave in february so they haven’t reduced my wages that much! I am still down more than €50 net a pay cheque.

€50 is a lot!!!!

seamus wrote:

Yeah, maybe ring Revenue and see if they can flag your record so that this week 1 basis doesn't get sent to your employer.

seamus wrote:

If they can't do that, then basically you'll just have to ring Revenue when you go back to work and ask them to revert your tax position to the normal basis. Your first month back might be a little tight, but it should then readjust in the next.

Ok thanks..

Millem

Cash_Q wrote: »

€50 is a lot!!!!



well the first pay cheque after maternity leave was down over €400!!
I then rang revenue they gave me some nonsense spiel about putting me on week 1 to reduce “hardship”!

Cash_Q

Wait, what? Am I asking to be put on a week1 basis? I would have thought no? How in the hell can this be an issue for them. I won't be entitled to any more or less than if I was in work, my employer will continue to pay me my full wage less maternity benefit, then SW will pay me my maternity benefit, why is this so complicated?!

natc

Gatica wrote: »

Unfortunately the state just doesn't care whether you can afford to have children, childcare or if you gotta quit work because you cannot afford it. They're always talking about equal rights in the work-place, but there hasn't been enough done to ensure both parents can afford to go back to work if they so choose.

Your absolutely right.

It’s a disgrace that the government don’t pay your normal wage up to a certain amount when on maternity leave. For an awful lot of employers it’s not feasible to do so the government should do better.

They should look at upping the payment to cover what a standard working week on minimum wage would be at least.

Millem

Cash_Q wrote: »

Wait, what? Am I asking to be put on a week1 basis? I would have thought no? How in the hell can this be an issue for them. I won't be entitled to any more or less than if I was in work, my employer will continue to pay me my full wage less maternity benefit, then SW will pay me my maternity benefit, why is this so complicated?!

I don’t think you have a say!
I was the same as you.
You will get slightly more though as maternity benefit is not subject to prsi or usc.

Cash_Q

Millem wrote:

I don’t think you have a say! I was the same as you. You will get slightly more though as maternity benefit is not subject to prsi or usc.

Someone told me to ring Revenue to make sure it's not going to cause me problems..????!!!!! More confused now than ever WTF