1.11 Will redundancy payments be subject to the levy?
Statutory redundancy payments are exempt from the levy. Statutory redundancy payments amount to 2 weeks pay per year of service plus a bonus week subject to a maximum payment of €600 per week.
In addition, ex-gratia redundancy payments in excess of the statutory redundancy amount are exempt from income tax, and therefore also the income levy, up to certain limits. These limits are up to €10,160
plus €765 per complete year of service in excess of the statutory redundancy. The basic exemption as outlined above can be further increased by up to €10,000 if the person is not a member of an occupational pension scheme.
Any relevant emoluments paid which are in excess of these limits are subject to the income levy in accordance with section 531B (as inserted by section 2 of Finance (No. 2) Act 2008) of the Taxes Consolidation Act 1997. It should be noted that the income levy is charged after granting the statutory exemptions set out above, and after granting any additional deduction for Standard Capital Superannuation Benefit (SCSB).
The taxable element of redundancy payments paid between 1 January and 30 April 2009 will be subject to the income levy rates and thresholds in force in the first four months of 2009.