Increase in tax after illness benifit

Hi,

Someone might know. A staff member of mine who was out sick for 4 weeks and claimed social welfare illness benefit ( along with pro-rate pay as we pay full wages- social welfare entitlements) had said when paid this week her tax had gone up by around 110 euro.

Is it normal when you claim illness benefit that your tax rate changes and you pay more tax? Its mad as she would pay around 1200 a month on all the nominal deductions, so seems a bit odd to also have to pay for illness benefit?

Thanks,

ari101

One reason this can happen is because of the timing difference between receiving the benefit and when social welfare update revenue to reduce tax credits and bands - often not done til a short claim is closed.

So 'salary less benefit taxed' + 'benefit net' can result in better than normal take home for a few weeks, but then there can be a catch up period when revenue reduces credits/bands to account for tax due on benefit and take home pay reduces as a result. It should all balance out, but if on a W1/M1 basis, it might require a balancing exercise (basic tick box tax return) at year end to get it to exactly where it needs to be.

Cheers.

Just thought it mad they take so much in tax a year, then get you to pay MORE tax after you take illness benefit.