Unemployment Repayment
This section explains what happens with your tax if you are out of work and when you can claim an unemployed tax refund.
You can get a refund of tax you have already paid if you were employed and find yourself unemployed. You may also get a tax refund if you are out of work due to illness.
Another way to get tax back is through tax relief on services or products that you have bought. Some of the cost of certain services and products can be recouped from the tax you have already paid to Revenue, for example, tax relief for employing a carer and tax relief for third level education fees. The amount of relief you get depends on the amount of tax you have paid.
This article explains how to get a tax refund if you have worked and are now unemployed, getting Illness Benefit or short-term Occupational Injury Benefit.
Why would I get an unemployed tax refund?
There are a number of reasons why you may now be liable to pay less tax than previously thought and due an unemployed tax refund. Your tax liability may be reduced because you are on unpaid sick leave or have become unemployed.
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 rate cut-off point, which is not used in a pay period, is 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 1st January to the date which your most recent wages are paid. This means if your income is reduced, for example, by sickness or unemployment, you will have unused tax credits and may be due a tax refund.
You may also get a refund if your tax liability has been incorrectly calculated by your employer and you have overpaid tax.
A tax refund may also be paid if you have purchased goods or services for which you can claim tax relief.
Rules
If you are unemployed or out of work sick
If tax has been deducted from your pay since 1st January last and you are now unemployed, you may be entitled to a tax rebate. If you have not paid any tax, you will not be due a refund.
Jobseeker’s Benefit (JB), Illness Benefit (IB) and payments under the Occupational Injury Benefit (OIB) Scheme (including Injury Benefit, Disablement Benefit and Incapacity Supplement) are all taxable sources of income. However, the first €13 per week of Jobseeker’s Benefit is not taxable. Any Increase for a Qualified Child paid with Illness Benefit or a payment under the OIB scheme is not taxable.
If you are getting Jobseeker’s Benefit, Illness Benefit, or a payment under the Occupational Injury Benefit Scheme and make a claim for a tax refund, the taxable proportion of your JB, IB or OIB payment and your wages are added together to determine if you are entitled to a refund.
When can I claim & how much will my refund be?
After leaving your job, your employer will provide Revenue with your pay and tax details and your leaving date.
A claim for an unemployment repayment can be made:
- immediately if emergency tax was applied in your last employment
- immediately if you are leaving Ireland permanently
- four weeks after becoming unemployed if you are not receiving any other taxable income
- eight weeks after becoming unemployed if you are receiving other taxable income such as Jobseekers Benefit.
The amount of your unemployed tax refund depends on:
- The length of time you have been unemployed
- The amount of income you have earned
- The amount of tax you have paid
- The amount of tax credits you have used
- The amount of your weekly social welfare payment