Row over maternity tax report
Published 07/12/2012 | 05:00
A MAJOR report into Ireland's tax system specifically recommended that maternity benefit should remain outside the tax net.
The National Women's Council of Ireland and Social Justice Ireland, yesterday criticised the Government's budget decision to tax the benefit paid to new mothers, for the first time ever.
It has also emerged that the Commission on Taxation had called for maternity benefit to remain exempt from tax.
The Government is hoping to claw back €40m a year in tax from new mothers by taxing the payment. But the Commission on Taxation called for maternity benefit to be exempt from taxation in a wide-ranging review in 2009.
"The payment is intended to allow mothers to remain outside the workforce for a period to nurture their newborn children and there is a positive social dimension to the payment," it found.
"Having regard to these aspects, we do not recommend any change in the taxation status of maternity benefit," it said.
The National Women's Council has criticised the decision to tax the benefit from next July.
"Taxing maternity benefit will hit expecting mothers and young families at a time when many of them are already operating on a very tight budget," said its director Orla O'Connor
Social Justice Ireland said that the cumulative effect of cuts to child benefit and the back to school allowance, "coupled with the decision to treat maternity benefit as taxable income is an attack on families with children, particularly low income families".