Maternity leave - tax issue

Worried2019

Hi all,

A quick question, I was on maternity leave for 22 weeks in 2021. My employer tops up my salary and I receive 100% minus maternity benefit payment.

However my net pay received is actually €1,300 less over those 5 months than if I was working. I got my statement of liability today expecting to get this back plus €1,000 from health expenses so expecting about 2,300. I got a refund of €200.

My employer is saying it’s a revenue issue, can anybody she’s some light? Should I be receiving the same net pay if my company is topping up to 100% of my salary?

thanks!

ari101

Assuming you get the benefit directly and your employer pays normal gross less benefit, your net pay should be less than normal. But (all other things being equal) the sum of maternity benefit + reduced net pay should actually be slightly greater than normal net pay, as maternity benefit is not liable for USC and PRSI.

Depending on what and when social welfare communicated to revenue about your claim, and what revenue did about it in regards to updating your tax credits and bands, it is possible you were not taxed exactly perfectly at the time, and it is balancing out now.

Also, I have seen married couples on joint assessment find a maternity benefit claim caused unexpected changes in the split of tax credits and bands - not sure if this might apply to you?

Review your balancing statement to make sure it includes the right amount of each source of income and also the right tax bands and credits.

CryptoToFollow

Did you or your employer receive the maternity benefit? If your employer received it, did they pay it on to you tax free or did they include it as part of your taxable salary. I have seen where it was included as part of the salary and then it was also included separately under social welfare income, thereby duplicating the income and incurring double taxation.