An additional BIK charge for employees over 50 where the employee pays all or 50% of the premium has been deducted this week. Anyone know how it works and are over 50's being penalised?
Where the employee pays the entire premium (be it through salary, direct debit, cash, etc), there shouldn't be any BIK charge as quite simply, the health insurance isn't a benefit of employment.
Where the employer pays some or all of the premium, the employee pays BIK on that portion. BIK is paid on the gross health insurance premium (i.e. before tax reliefs), but an employee is still eligible to claim the tax relief on health insurance, if it's not already factored into the BIK charge. I remember reading somewhere that Revenue were looking at streamlining the process so any BIK charges included the tax relief, but I'm not sure where it currently stands.
Up until July 2009, the gross premiums for everyone was the same. From July 2009, because of the additional tax credits available to those over 50, gross premiums for people over that age changed in line with the tax reliefs available for each age band. So what you're seeing now is the result of that.
Ultimately, everyone is allowed to claim tax relief on health insurance, whether it's self paid or company paid. See here on the Citizens Information website for details of the tax relief available. (Scroll down to Health Insurance Tax Credit.)
For self paid members, this tax relief is at source (even if it's deducted from salary) so there shouldn't be any BIK charges. For those whose insurance is partially or completely paid for as a benefit, the tax releif is available by contacting the Revenue Commissioners.