41% Tax on Jobseekers Benefit for Jointly Assessed Couple

[Minnie]

Hi

My spouse is in full time employment and I received jobseekers benefit of €3712 for 2010. Our P21 for last year stated that there was an underpayment of €779.52 which relates to tax which wasn't paid on my jobseekers benefit.

• My spouse's P60 states that a tax credit total of €6780 (including home carers credit) was applied throughout the year
• The P21 states that we were entitled to a tax credit total of €7522.40 - the difference being an additional tax credit of €742.40 for myself which amounts to 20% of €3712 (job seekers benefit)

This means Revenue have applied the higher tax rate to my jobseekers benefit and treated it as additional income
€3712 x 41% = €1521.92 - 742.40 = €779.52

My questions are

• I thought that jobseekers benefit was taxed at the standard rate, even if a couple are jointly assessed?
• I thought that the first €17 per peek was non taxable
• Why didn't I receive the full PAYE tax credit of €1830

Is Revenue's assessment correct and my understanding just wishful thinking?

Many thanks

 

[Mrs Vimes]

Hi Minnie,

When a person qualifies for home carer credit (ie child benefit showing and couple are jointly assessed), Revenue automatically apply either the home carer's credit of E900 or the increased SRCOP (in your case worth 779.52), whichever is most beneficial to the taxpayer.

You are correct that the first E13 of JSB is not taxable, did you include it in your return or did Revenue make a mistake? Either way it can be corrected, contact your local Revenue office.

You didn't receive the full PAYE credit because it can only be allowed at the standard rate of 20% and your earnings (including JSB) did not use it all up.

Sybil