Social Welfare Payments paid in later tax year

S

SGWidow

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Say someone was due SW payments in 2019 but due to admin issues the relevant payments are just being processed now as a lump sum.

For tax purposes - for a PAYE taxpayer - presumably the back payment now is deemed as income in the 2021 tax year?
 
I would opt for whichever minimises your tax bill - Revenue allowed me to backdate payments to a previous year and submit an amended Income Tax Return for the year in question.

You need to calculate if it saves you tax or not
 
This is a bone of contention. As far as Revenue is concerned if DEASP says they were for 2019, then they should be taxed as income in 2019. It breaks their other PAYE rules of for taxing payments as per their Pay Date.
 
I've just come across a such a case. SW payment applied for in June 2024 was refused but eventually granted on appeal in July 2025 backdated to June 2024. The lump sum for June 2025 to July 2025 was paid in July 2025 with regular payments starting on the same date.

When the details of the payment were reported by DSP to Revenue the lump sum for June 2024 to December 2024 was recorded as income for 2024. The lump sum for January 2025 to July 2025 and the regular payments from then to December 2025 were recorded as income for 2025.

I don't think that there was any latitude to change this treatment, which seems to be the correct one anyway.
 
A possible reason why the payments are applied to the backdated period could be because there is Prsi credits involved.

By backdating, the correct number of Prsi credits would be granted.
 
S class said:
A possible reason why the payments are applied to the backdated period could be because there is Prsi credits involved.
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In case it matters the payment was Invalidity Pension.

But it seems logical to allocate the backdated lump sum payment for June 2024 to December 2024 to the 2024 tax year, and the backdated lump sum payment for January 2025 to July 2025 and subsequent regular payments until the end of the year to the 2025 tax year?
 
It would definitely be unfair if the person ended up either paying tax or being taxed at a higher rate as a result of an appeal.

There was a poster a few months ago considering delaying a Pay related Jobseekers claim from 2025 to start from 2026.
The rule for PRJB is that the delayed payments would be backdated to the date of unemployment.

They were hoping to avoid paying 40% tax with this plan.
I was wondering would they miss out on Jobseekers credits for 2025.

This thread clarifies that they would have received all credits back to date of unemployment, but they could not avoid paying 40% tax on the backdated payments.

Can I delay applying and/or receiving pay-related jobseekers beyond 6 weeks?

Does anyone here have experience of how the new-ish pay-related jobseekers' benefit works in practice - specifically about delaying application for, and receiving, it? The rules state you need to apply for PRJB within 6 weeks of finishing work (which is v soon, for me). This is quite...
www.askaboutmoney.com
 
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