Bonus payments in 2022. Taxable?

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murphaph1

Registered User
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Hi all,
I am currently doing my elderly mother's tax return for 2022. In previous years the state pension contributory component of her income was very straightforward to calculate from her bank statements but she now gets several "bonus" fuel allowances (These seem to be non-taxable like the "standard" fuel allowance, correct?) and there were the following "bonus" payments that I'd like to clarify before I deduct them from her taxable income:

16/03/22 > looks like a €125 bonus paid on top of the standard €33 fuel allowance? Presumably not taxable income?
20/05/22 -> €100 bonus. What was this for and is it taxable income?
21/10/22 -> Additional €253,30 paid seemingly randomly, looks exactly like the taxable xmas bonus but in October. This is preumably taxable?
18/11/22 -> looks like a €400 bonus paid on top of the standard €33 fuel allowance? Presumably not taxable income?

Thanks for any help you can provide folks.
 
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S class said:

DSP Christmas Bonus - BrightPay Ireland Blog

www.brightpay.ie www.brightpay.ie

According to this the Christmas bonus is tax free.
Click to expand...
Tis a tad old the info though isn't it? I don't see the Xmas bonus listed here:

Tax-exempt DSP benefits

This page explains tax-exempt DSP benefits
www.revenue.ie www.revenue.ie

If I strip out all the suspected fuel allowances then the sum I arrive at is exactly to the cent the same as the figure the DSP has provided Revenue and which appears as the suggested total amount of DSP payments in ROS.

The €100 bonus is also a fuel allowance. I found an Irish Mirro article with the payment date and description. It would be really much better if the DSP made these payments separately with an actual description of what they are instead of lumping them together with the pension payments.
 
The Christmas bonus isn't mentioned in the list of taxable DSP payments either.
It is paid to people on Jobseekers Allowance. I doubt if it's a taxable payment for them. I have previously searched for information on whether the Christmas bonus is taxable. The only information I got was what I have indicated. I can't recall seeing any changes to the tax treatment of the Christmas bonus since 2016.
 
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Xmas bonus is taxable if you earn enough to pay tax….when I do a p21 balancing statement any bonus I received is included in the total amount received for DSP
 
The information provided by Revenue could certainly be a little clearer around these bonuses.
 
murphaph1 said:
The information provided by Revenue could certainly be a little clearer around these bonuses.
Click to expand...
Definitely.

Tax is not directly deducted from the Contributory State Pension or 65s benefit.
Tax is indirectly applied by reducing the tax credits and 20% tax band of the recipient.

If the Christmas bonus is taxable the following would occur.

The Christmas bonus for any particular year is only announced in the budget announcement in that year. This means that the tax credits and bands adjustments would not include the Christmas bonus. Any recipient who does not submit a tax return would not have paid their Christmas bonus tax.

If the Christmas bonus was taxable, wouldn't the tax credits and 20% band of the recipient be adjusted in the following year to reflect the previous years bonus ?
 
That's above my pay grade lol. I just, perhaps naively, assumed that as the Xmas bonus is a double payment of the welfare payment in question, in my mother's case the state pension contributory, that the bonus is therefore the same "type" of payment and should be taxable if the base payment is taxable. But your question poses an interesting dilema with regards to tax credits.
 
In the payments details section of mywelfare the extra Christmas payment is listed as "Christmas Bonus". Last year there was also an extra bonus paid at Halloween. This was also listed as " Christmas Bonus". Rather than being a extra weeks payment, Christmas Bonus seems to exist as a separate entity.
 
Page 16 of the 2018 Finace Act seeks to clarify exactly which DSP payments are not reckonable for income tax:

I can't reconcile the Christmas Bonus with any of the listed payments. I would like to find the legislation that enacts the Christmas Bonus to see under what provision these payments are made. I can find an SI from 2008 where the Christmas bonus is ordered and similar SI's from years previous to this but I can't find any similar SI's after this year, so the provison under which the Christmas bonus was paid may have changed. This is such a common payment that it should be really easy to know if it's tax free or not.


I've asked on ROS for guidance but suspect the answer will come too late for this tax return.

Edit: I am now pretty sure it's taxable income, certainly the October payment. I have found the provison of the double payment in the legislation. It is not legally refered to as a bonus. The legislation simply temporarily amends the rate of the base payment by doubling it. The payment is therefore not a separate category of payment, just twice the amount of the base payment, in my mother's case the contributory pension, which is taxable, so the double rate in October is taxable too:


2nd Edit: Here's the one for the Christmas bonus, exactly the same mechanism as in October, so again, just a temporary doubling of the base payment, so IMO taxable income, which tallies with the amounts provided by the DSP to Revenue and as displayed in ROS:

 
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Revenue has confirmed to me via ROS myenquiries that the xmas bonus payment if you are in receipt of the COAP is taxable income.
 
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