If you are returning to work after at least 12 months unemployment or on an employment scheme or FAS course, you may be entitled to significant extra tax credits to reduce the tax that you will pay on your earnings for a period of three years after returning to work, meaning more money in your pocket.
These extra tax credits are available through the Revenue Job Assist Scheme. Revenue Job Assist is an additional tax allowance for people who have been unemployed for 12 months or more and who are now returning to employment.
If you have children, the scheme allows for further extra tax credits in respect of each qualifying child (see below for more information).
How much additional tax credits are available?
The additional tax credits under Revenue Job Assist are significant and cover a three year period after the date you return to work to support a longer term return to work.
In year 1 you are entitled to extra tax credits of €3,810 plus €1,270 for each qualifying child
In year 2, €2,540 plus €850 for each qualifying child
In year 3, €1,270 plus €425 for each qualifying child
It may be more meaningful to express this in terms of how much extra income you can earn tax free under this scheme. These extra tax credits will enable you to earn extra income each year free of PAYE tax in the amount of:
Year 1 - €19,050 plus €6,350 for each qualifying child
Year 2 - €12,700 plus €4,250 for each qualifying child
Year 3 - €6,350 plus €2,125 for each qualifying child
USC and PRSI will still be charged on your income however.
In 2012 a single person working as a PAYE employee has a minimum the single person tax credit of €1,650 and the PAYE tax credit of €1,650. This is a total of €3,300 in tax credits which allows that person to earn €16,500 per annum without paying income tax. PRSI and USC are still payable as normal.
Under Revenue Job Assist a single person (without children) would also have further tax credits of €3,810 giving total tax credits of €7,110. This allows that person to earn €35,550 per annum (in year 1) without paying income tax. PRSI and USC are still payable as normal.
In addition to these extra tax credits, you may also be able to retain your medical card and other secondary benefits under the scheme.
Who qualifies for Revenue Job Assist?
You may qualify for Revenue Job Assist if you have been:
· Getting Jobseeker's Benefit or Jobseeker's Allowance for 1 year or more,
· A lone parent on the One-Parent Family Payment,
· Getting Disability Allowance or Blind Person's Pension for 12 months or more,
· Getting Invalidity Pension for 12 months or Illness Benefit for 3 years or more,
· Released after 12 months or more in prison,
· Signing for PRSI credits (since 1 January 2012).
The job you are taking up must be a “qualifying job” which means it must:
· Be for a minimum of 30 hours a week,
· Be capable of lasting at least 12 months;
· There must have been no redundancies within the company in the last 26 weeks,
· The job must not be a primarily commissioned based role.
Time spent on a FAS course or employment schemes listed below will count as periods of unemployment for the purposes of the scheme, provided that you were in receipt of one of the above payments immediately prior to commencing the course or employment scheme.
· Certain FÁS training courses (non-apprenticeship)
· The Community Employment Scheme
· The Job Initiative programme
· The “Workplace” 5 week job experience programme
· The Back to Education scheme administered by the Department of Social Protection
Additional tax credits for qualifying children
Additional tax credits are available for each “qualifying” child that you have. A qualifying child is a child of yours, your spouse or your civil partner who is:
· Under 18 years of age;
· Over 18 and in full-time education or full-time training as an apprentice where the training is for at least two years;
· Permanently incapacitated either physically or mentally, having become so before reaching 21 years of age or after reaching the age of 21 but while still in full-time education or while training fulltime for a trade or profession for a minimum of 2 years.
Revenue Job Assist only applies if you are taking up a job and does not apply if you are becoming self-employed. It can only be set against income from the new job that you have taken up and any unused portion cannot be transferred to a spouse.
You may change employment once during the three year period and keep the allowance provided the second job is also a qualifying employment. If you move onto a third job you will lose the allowance.
As can be seen there are significant tax savings to be made under the Revenue Job Assist scheme. Please do not hesitate to contact Fenero if you need assistance with applying for this scheme or for help working out whether it would be beneficial to wait a year before you start claiming the additional tax credits.