Claim for Refund & End Up Owing Money

I made a claim for refund of health expenses incurred in 2010 online.
Revenue assigned the correct tax credit and a P21 [Balancing Statement] was triggered.
I ended up owing over 1K as 'DSFA Jobseekers Benefit' was added to our taxable income.
My wife is in 'short-time employment' so she does receive 50% of the JSB on a weekly basis.
I had a look at IT 24 which is the Revenue leaflet on JSB.
It does state that JSB is taxable but also it states "If you are participating in a short-time working arrangement Jobseekers Benefit payable is not taxable.

So that seemed clear to me & I rang Revenue to try to get it resolved.
Person that I spoke to said that I do owe the 1K as the computer says that she receives JSB.
I explained to her that my wife is on JSB but is in 'short-time employment' and as per IT 24 this should not be deemed to be taxable income. Her reply was that the computer says that you owe us that amount.
All I could think of was Little Britain and the 'Computer Says No!!!'.
Asked if she could ask someone else as I would have thought that other people have being reduced to a 3 day week and have made a claim for health expenses/service charges/etc.

She returned to say that the other person confirmed that the computer is right.
Asked what do I have to do is tell the computer that it might be wrong, i.e. can she see if there is an option for short term employment.
She had no clue and said that perhaps the DSFA would have to tell Revenue that they are wrong.

My query is has anyone experienced this before & if so, then is the next step to get a letter from the DSFA to confirm that my wife is a systematic short term worker and post it to Revenue?

InfoSeeker said:

My query is has anyone experienced this before & if so, then is the next step to get a letter from the DSFA to confirm that my wife is a systematic short term worker and post it to Revenue?

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Don't pay the money.

Get the letter from the DSFA specifically stating that your wife's payments for 2010 were "unemployment benefit paid toa person employed in short-time employment". Then send this into the Revenue with a letter stating that, in accordance with section 126(3)(c)(ii) your wife's unemployment benefit is not taxable and ask them to issue a new balancing statement.

Unfortunately, this happens regularly as there doesn't be a separate coding for short term UB in the DSFA/Revenue systems, so the DSFA tell the Revenue a person got UB and the Revenue automatically tax it. Daft really.

You say that your wife gets 50% of a weeks benefit.If she was on short time working she should be on 2/5ths of weekly amount.This would lead me to suggest that she has been put on casual working (taxable) which is paid over 6 days.In this scenario the revenue would be correct.

Vandriver, you are correct that she is on 50% but she only works 3 days out of a 5 day week. There was another employee in the office reduced to a 3 day week before her who worked in Accounts and she handled this. Obviously she has handled it incorrectly.

I will look to get this rectified, ie she has been overpaid by 10% in terms of her JSB so Revenue would need to adjust for that once I can get her sorted with the DSFA.

Thanks Nige for your response also.

I found the following on welfare.ie which states that it is the deciding officer who makes the final decision on whether someone is a systematic short time worker, a casual worker or a part time worker.

My wife filled out the form that she was given, her occupation would clearly indicate that she works Mon-Fri 9-5pm type job so strange that she was assessed as a casual worker.

Section from website:

(b) Part-time Workers and Substantial Loss ConditionThere are 3 categories of claimant who may qualify for JB while partially employed. They are:
Systematic Short-time workers (SST)
Casual workers, and
Part-time workers.
To qualify for JB, a person must be unemployed for at least 3 days in 6 (see "Period of Interruption of Employment") and, except in the case of casual workers, must suffer a substantial loss of employment.

Deciding Officers should approach the matter as follows:

Is the person a systematic short-time worker? (if s/he is, the condition regarding substantial loss has automatically been satisfied).
If not, is s/he a casual worker? (if s/he is, the condition does not apply)
If neither, the person must be a part-time worker to whom the substantial loss rule applies.