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After 12 Months Out of Work, What Tax Relief Can I Claim
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Written by James D. Crawford   
Thursday, 22 December 2011
Q: I've taken a job on low pay, I having been out of work for over a year. I've only just started so I won't be liable for tax this year and in justifying the low wage, the boss said that I'd be entitled to extra tax relief next year. Is this true and how much is it worth? A There is an extra tax allowance ? that may apply in your case. If it does, it will last for three years starting next year. There is no point in claiming it for this year.

There are terms and conditions. To qualify, you need to have been out of work for 12 months and to have been on a social welfare benefit or allowance.

Up to 15 days of incidental employment and periods on F?s courses or training schemes are ignored in meeting that 12 months requirement, providing you had previously been claiming one of the relevant social welfare payments.

The job must involve a minimum of 30 hours a week and be capable of lasting for at least a year. No more than 75% of your pay must be commissionbased and you can't be replacing someone who was unfairly dismissed or made redundant.

Indeed, there must have been no redundancies in the business during the previous six months.

If you meet those requirements you get an extra tax allowance of €3,810 a year, plus €1,270 for each dependant child. These are allowances granted at your marginal rate of tax. The personal allowance of €3,810 is worth €762 in saved tax to someone liable for tax at 20%, and €1,562 to someone paying tax at 41%.

In addition to these tax benefits, you may also be entitled to retain any secondary benefits to which you were entitled while you were out of work, such as rent or mortgage subsidy and fuel allowance. If you have a medical card, you are entitled to keep it for three years.
Last Updated ( Thursday, 22 December 2011 )