Working mothers are set to lose out on up to €2,700 per child under a new system implemented by the Government that will see maternity benefit taxed for the first time.
The Irish Independent reports that as the system currently stands, women do not have to pay any tax on the €6,812 of maternity benefits that they recieve for six months after they give birth. However, from July 1st of this year, women will have to give the Revenue up to €2,700 of their benefits in tax.
The Minister for Finance, Michael Noonan, has defended the implementation of the cut in benefits, saying that some women were earning more while they were on maternity leave than when they were in work.
“Part of the general policy is that persons shouldn’t enjoy a bigger take-home pay when they are out of work than in work,” said Mr Noonan.
The move by the Government has already been dubbed a “tax on childbirth” and a “grab by the taxman” by the opposition.
Women will have to give up to €2,700 of their benefits back to Revenue
At present, some women do get more in their take-home payw hile they are on maternity leave but this is due to how the current system is set up. The State pays a maximum of €262 per week to a woman on maternity leave for six months. This adds up to a total of €6,812.
However, many public and private-sector employers also opt to give a “top up” to ensure that a woman still gets her full wages. As tax is only paid on the “top up” payment, women on maternity leave often end up with more in their take home wage.
According to Mr Noonan, the system was never intended to provide a “financial gain” for women on maternity leave, but he did clarify and say that even though maternity leave would now be taxed at 20 per cent or 41 per cent, it would not be subjected to PRSI or the universal social charge.
“I think most people would be happy if they would have the same [wages] on maternity leave as they have at work,” he said.
Pearse Doherty, the spokesman for finance for Sinn Fein, criticised the decision saying it was getting rid of an additional benefit which helped Irish mothers.
“This is now a tax on childbirth. I think this is a grab by the taxman,” said Mr Doherty.
Likewise, the Fianna Fail finance spokesman, Michael McGrath, said that taxing maternity benefit would lead to a severe hit on working women.
And Independent TD Richard Boyd Barrett said that the move was very “anti-women” and “anti-family.”
“You should be upholding that acknowledgement of the work women do for our society. It’s entirely right and proper that they should be slightly better off,” he said, speaking to Mr Noonan.
