S.I. No. 77/1993 - Income Tax (Employments) Regulations, 1993.


S.I. No. 77 of 1993.

INCOME TAX (EMPLOYMENTS) REGULATIONS, 1993.

The Revenue Commissioners, in exercise of the powers conferred on them by section 127 of the Income Tax Act, 1967 (No. 6 of 1967), and section 15 of the Finance Act, 1992 (No. 9 of 1992), hereby make the following regulations:

1. (1) These Regulations may be cited as the Income Tax (Employments) Regulations, 1993, and shall come into operation on the 6th day of April, 1993.

(2) In these Regulations "the Principal Regulations" means the Income Tax (Employments) Regulations, 1960 ( S.I. No. 28 of 1960 ).

2. The Principal Regulations are hereby amended by the insertion after Part X (inserted by the Income Tax (Employments) Regulations, 1974 ( S.I. No. 86 of 1974 )) of the Part set out in the Schedule to these Regulations.

SCHEDULE

PART XI

SPECIAL PROVISIONS WHERE EMPLOYEES ARE IN RECEIPT OF OR ARE ENTITLED TO RECEIVE CERTAIN BENEFITS PAYABLE UNDER THE SOCIAL WELFARE ACTS

69. In this Part of these Regulations—

"relevant period", in relation to an employee who is absent from work and who in respect of such absence receives or is entitled to receive a taxable benefit, means the period commencing with the date of commencement of the second week of any such absence and ending on the earliest of the following dates, that is to say:

( a ) the date of cessation of employment,

( b ) the 5th day of April following the employee's return to work, or

( c ) such other date as the inspector may specify;

"taxable benefit" means all amounts falling to be paid on or after the 6th day of April, 1993, on foot of one or other of the following benefits under the Social Welfare (Consolidation) Act, 1981 (No. 1 of 1981 ), and every enactment which is to be construed as one with that Act, that is to say:

( a ) disability benefit, and

( b ) injury benefit which is comprised in occupational injuries benefit.

70. Where, in respect of an absence from work, an employee receives or is entitled to receive a taxable benefit the following provisions shall, notwithstanding any other provision of these Regulations and unless the inspector otherwise directs, apply, that is to say:

( a ) any payment of emoluments made by the employer to the employee in the relevant period shall be treated as if it were a payment to which Regulation 21 applies,

( b ) (i) where the employee is entitled to receive payment of emoluments during such absence from work, the employer shall, in relation to such payments made by him to the employee during the relevant period, reduce the tax-free allowances for Week 1 or Month 1, as may be appropriate, as specified on the tax deduction card held by him in respect of the employee by—

(A) such amount as the Revenue Commissioners, by general notice or otherwise, direct, or

(B) such other amount as the Minister for Social Welfare may notify to him in relation to the employee, and

(ii) the reduction of the employee's tax-free allowances in accordance with the provisions of subparagraph (i) shall be treated as if it were a determination or, as the case may be, an amended determination of tax-free allowances by the inspector but the inspector need not issue a notice of the determination or the amended determination, as may be appropriate, to the employee or a certificate of tax-free allowances, an amended certificate of tax-free allowances, a tax deduction card or an amended tax deduction card, as may be appropriate, to the employer,

and

( c ) where on any usual pay day during the period of such absence from work the employee is not entitled to receive payment of emoluments from the employer, the provisions of Regulation 29 shall not apply in respect of such pay day.

GIVEN this 16th day of March, 1993.

D. B. QUIGLEY,

Revenue Commissioner.

EXPLANATORY NOTE.

Section 15 of the Finance Act, 1992 , contains provisions providing for the taxation of certain short-term benefits payable under the Social Welfare Acts i.e. disability benefit, injury benefit comprised in occupational injuries benefit, unemployment benefit and pay-related benefit. The benefits are deemed to arise from an employment and consequently be chargeable to tax under Schedule E and be emoluments to which PAYE applies. The section is to come into operation by way of order or orders made by the Minister for Finance. The Minister for Finance made an order on 10 March, 1993 bringing the section into operation in respect of disability benefit and injury benefit with effect from 6 April, 1993.

These Regulations, which amend the existing PAYE Regulations, set out the manner in which any tax due in respect of disability benefit and injury benefit is to be collected from recipients in employment.

Beginning with the second week of an employee's absence from work in respect of which he receives or is entitled to receive either disability benefit or injury benefit, the following provisions, unless the inspector directs otherwise, will apply—

( a ) any payment of emoluments made by the employer to the employee to the end of the tax year following the employee's return to work (or, if earlier, cessation of employment or a date specified by the inspector) is to be taxed on a non-cumulative Week 1 basis,

( b ) where the employee is in receipt of payments from his employer during his absence from work, the employer will, on the basis of a general instruction to be issued by the Revenue Commissioners to employers, reduce the employee's tax-free allowances for use against those payments by such amount as the Commissioners direct or such other amount as the Minister for Social Welfare notifies to him in respect of the employee, and

( c ) where the employee is not entitled to receive any emoluments during his absence from work, he is not to be entitled to any repayment by virtue of Regulation 29.