I was on the dole for a few months - why is my tax rate being affected now?

scrotist

I was looking at my tax credit cert on revenue.

We are supposed to pay 20% on anything under €42k

But now they have reduced that, presumable by the amount of dole I got.

So basically, I have to pay my dole back, in the form of reducing my tax band? It was jobseekers benefit i.e. I had plenty of PRSI contributions. Why do I have to pay this back?

Am I reading this correctly? I am in the higher tax bracket, so I will now be paying the higher tax rate at anything over €40,248, rather than €42,000?

How is that fair? This can't be true.

Allinall

Social welfare is taxable. They’re effective charging you 20% on the social welfare you received.

Jobseekers benefits are taxable

L1011

JSB is taxable, that's just it.

You're going to be paying €350.40 more in tax, so it isn't the same as repaying all you claimed.

scrotist

https://www.boards.ie/discussion/comment/122006380#Comment_122006380

How did you calculate that?

scrotist

https://www.boards.ie/discussion/comment/122006373#Comment_122006373

But it says anything over 40,248 is taxable at 40%.

When it should be 42,000.

So I will pay 40% tax on that extra €1752 = €700

That's not 20% of my social welfare. Am I mathing wrong?

Allinall

its 20% of €1,752. The amount you got on JSB.

L1011

https://www.boards.ie/discussion/comment/122006582#Comment_122006582

No, it's 20 because it's only moving the cutoff. Youll have paid 20% anyway

scrotist

https://www.boards.ie/discussion/comment/122006631#Comment_122006631

Can you show me how you got to €350.40 ?

L1011

https://www.boards.ie/discussion/comment/122006730#Comment_122006730

Divide 1752 by 5. That gets 20%. That is the extra amount of tax you will be paying.

TheSunIsShining

You would have paid 20% of the 1752 anyway. Instead you're paying 40% of it. So 40% is €700.80 whereas 20% is €350.40. So the extra you are paying is €700.80 - €350.40 = €350.40.