Sunday 23 October 2016

Your Questions: Am I entitled to a tax refund after losing my job... and if so, how would I get it?

John Lowe

Published 17/04/2016 | 02:30

When you have been unemployed for four weeks, you can claim a refund from your local Revenue office, by using the four weeks unused tax credit.
When you have been unemployed for four weeks, you can claim a refund from your local Revenue office, by using the four weeks unused tax credit.

I recently lost my job. I understand I may be entitled to a tax refund - how do I go about getting one? Gemma, Drogheda, Co Louth

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Sorry to hear this. For PAYE workers, your tax liability is spread out evenly over the year. To ensure that this is achieved, your tax liability is normally calculated on a cumulative basis. Any tax credits and standard tax rate cut-off points which are not used in a pay period are carried forward to the next pay period within that tax year.

This means that when an employer calculates your tax liability, they actually calculate the total tax due from January 1 to the date which your most recent wages are paid.

This means that if you lose your income due to unemployment, you will have unused tax credits and may be due a tax refund.

Your employer should have given you a P45 on the cessation of your employment and this will be what you use to claim the refund.

When you have been unemployed for four weeks, you can claim a refund from your local Revenue office, by using the four weeks unused tax credit.

You can do this every four weeks until all tax has been repaid or the tax credits are used. You cannot carry unused tax credits forward from one tax year to the next.

Obviously, the later in the year you become unemployed, the more of your tax credits you will already have used up and the less refund you can claim. If emergency tax was deducted from you, you may apply immediately for a refund on becoming unemployed.

To claim a refund you should ask your local Revenue office for Form P50 (First Claim for Tax Repayment during Unemployment) and return the completed form together with Form P45 (Parts 2 & 3) given to you by your former employer.


I am self-employed and have had a contract with the same company for the last three years. This is my sole source of income.

I get two weeks paid leave under these contracts - which are annual. I understand that employees are entitled to a minimum of four weeks paid leave - plus public holidays. As a self-employed individual, I don't appear to have those rights. Is that correct?

John, Donabate, Co Dublin

This is quite a tricky question as you say that you are self-employed and also you refer to the rights of "employees".

Employers engage persons on either contracts of service or contracts for services. Only a person engaged under a contract of service is an employee and therefore protected by the full range of employment legislation.

An independent contractor or self-employed person will have a contract for services with the party for whom the work is being done.

The distinction between a contract of service and a contract for services can sometimes be unclear - but the type of contract a person is engaged under can have serious implications for both employer and employee in matters such as employment protection legislation, taxation and social welfare.

If you are considered to be an employee, then you have a statutory right to a minimum of four weeks paid leave annually.

Your tax status will show whether you are paid under the PAYE system or are regarded as self-employed. In addition, Revenue has a code of practice for determining employment or self-employment of individuals which should help to clarify your position. Take a holiday anyway!


I am one of the original 'victims' of Mr Noonan's private pension levy in the 2011 budget. In my particular case, the trustees of my scheme decided that our fund wasn't strong enough to pay the levy directly.

The consequence of this decision was that anyone on pension at that time had to pay it from their monthly payment.

In last October's Budget, Mr Noonan announced that the levy would cease from January 2016. However, I have received my January 2016 pension, and my pension has not been restored to the full original value.

Do you have any idea why this may be the case?

Also I heard that our trustees may take the decision not to restore our pensions to the level that they were at before the levy was deducted - because of a shortfall in the pension fund. Have they the right to do this to people already drawing a pension?

Frances, Howth, Co Dublin

The pension levy was introduced by the Minister of Finance, Michael Noonan, in May 2011 as a 0.6pc charge on pension fund assets held in the State, to fund the government's job initiative.

It was intended to apply for a period of four years only and so, as anticipated, it was announced in Budget 2016 that from the end of December 2015, it would be scrapped.

It may be that for administrative reasons, the trustees of your pension fund were unable to adjust their systems in time for the January payment and that in the following months, an appropriate refund will be made.

Alternatively, if there is a shortfall in the pension fund, they may have decided for reasons of prudence to maintain the payments at 2015 levels, regardless of the withdrawal of the levy. The duties of trustees are onerous and they have an obligation to their members to maintain the integrity of the fund and to take whatever steps are necessary to ensure its ongoing solvency.

This is something you should query firstly with the trustees and if you feel aggrieved with their answer, you could raise the matter with the Pensions Authority, a statutory body which exercises a regulatory function over private pension schemes.


My new employer will pay 5pc into my defined contribution pension if I match it. I am only 26 - do I have to agree to this or can I put it off until I am at least in my 30s?

Mary, Limerick City

There are currently over 677,000 Irish citizens over the age of 66 and by the year 2050, there will be 1.8million citizens over this age - 767,300 by 2026, meaning that ten years from now, more than 16pc of the population will be in retirement.

Another fact is that half of the current earning population of Ireland does not have a pension. They are obviously hoping that the State pension (which is currently €233.30 per week) will be enough to tide them over at that stage and that the government will still have the funds to be able to pay it when they reach retirement age.

With the pension funds being decimated over the last few years and the ageing population ambivalent about saving for their retirement, something has to give.

The government, through the National Pension Framework, hoped to address this issue and were looking for all employees and employers to eventually contribute to a pension fund of some sort, and to raise the retirement age gradually to 68 in 2028. This has yet to happen but watch this space.

So if you are currently on the higher rate of tax, it will certainly be worth your while making that 5pc contribution as your employer is also making a 5pc contribution.

This is a win-win situation for you, and you are never too young to start a pension! Even at 20pc tax relief, the full 10pc contribution (5pc from you and 5pc from the employer) is only costing you a net 4pc of your income.

Ask for a report each year from the trustees to ensure the fund is on course to pay you what the original estimates hoped to achieve.

Quite simply put, a pension is a must. It is a savings plan which attracts three specific tax breaks - tax relief on the contribution that you make to your pension at your marginal rate, tax-free growth in the pension fund, and the availability of a tax free lump sum.


Email your questions to or write to 'Your Questions, The Sunday Independent Business Section, 27-32 Talbot Street, Dublin 1'.

While we will endeavour to place your questions with the most appropriate expert to answer your query, this column is a reader service and is not intended to replace professional advice.

Author of Money Doctor 2016 and @themoneydoc

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