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Thousands of workers due a refund after PRSI overcharge

TENS of thousands of people are owed almost €400 each by the Government because they were overcharged for PRSI.

More than 100,000 taxpayers have already applied to the Department of Social Protection for refunds worth millions of euro because they were charged too much under the health levy element of PRSI in 2010.

Some 43,000 of these applications have so far been processed, and 26,000 taxpayers were found to be owed money while 17,000 were not -- meaning more than 60pc were due a refund.

But another 800,000 could potentially have a claim for a refund if they also had the health levy deducted that year.

The refund applies to taxpayers who earned less than €26,000 in 2010 but were hit with the 4pc levy for any week in which their earnings exceeded €500.

The department was adamant this was not an error, because although taxpayers were exempt from the levy if their earnings were under €26,000 a year, PRSI had to be deducted on a weekly basis and then refunded later where necessary.

New figures obtained by the Irish Independent show the refund per worker affected so far is almost €400.

They reveal that the department has paid back €10m to 26,000 taxpayers in recent months -- an average of €385 each.

Another 63,000 people are still waiting to have their refund applications processed, meaning the total sum due to them could top €20m. Up to the end of December 2011, the department received 106,000 applications for refunds of the health levy relating to 2010.

"Up to and including December 31, 2011, a total of approximately €10m was paid out to approximately 26,000 applicants," the department said.

But as Revenue figures show, more than 900,000 taxpayers earn less than €26,000 a year, hundreds of thousands more may also need to check if they are owed PRSI refunds for weeks where their earnings were above €500.

The Consumers' Association of Ireland (CAI) said the sums involved were staggering.

"It's incumbent on the department now to do everything it can to make sure everyone who has been overcharged knows about it and can get their money back within a reasonable deadline," said CAI chief executive Dermott Jewell.

Most people did not know about these refunds and it wasn't enough for the department to simply post a message on its website and expect consumers to find out about it, particularly as those affected were not high earners who could afford such a loss, he added.

Mr Jewell urged the department to contact employers directly as that could be a shortcut to reaching those overcharged and refunding them quickly.

The health levy was doubled to 4pc of earnings in 2010 and was collected as part of PRSI contributions until January 2011 when it was subsumed into and replaced by the universal social charge.

The department said no refunds would arise from 2011 on. Applications for refunds for 2010 were still being received and processed, it said.

Consumers have four years to apply for a PRSI refund if they have been charged too much, and must do so in writing to the Department of Social Protection, Oisin House, Pearse Street, Dublin 2.

Irish Independent