Can I Claim a Tax Refund When Unemployed or Out of Work Sick in Ireland?

Updated 19/01/21

For many of us, becoming unemployed or being forced to take sick leave due to illness can be almost detrimental from a financial perspective.

What you might not know is that you may be eligible to claim a tax refund while on sick leave or while unemployed.

If you find yourself in this situation, a tax refund could contribute to help you support yourself while you’re out of work.

Here’s the low down…

Can I claim tax back when I’m unemployed or out of work sick?

Yes, in some circumstances it is possible for you to claim a tax refund when you are unemployed, assuming you paid tax when you were employed. You can even claim as far back as 4 years.

You may also be eligible to claim a tax refund if you’re out of work due to illness… but you can’t get tax back if you’re still employed.

You may also claim tax back through tax relief for services or products that you paid for. For example, there is tax relief available for employing a carer or for paying third level education fees for yourself or someone else.

The amount of tax you can claim back depends on how much tax you previously paid.

Why should I claim a tax refund?

Well, it’s simple, it’s your money so why let the government keep it?

There are tonnes of reasons why you may be due tax back. If you’re on unpaid sick leave, or you’ve become unemployed, your tax liability may be reduced.

If you’re a PAYE worker, your tax liability is calculated on a cumulative basis.

On sick leave or unemployed?

Claim Your Tax Refund Here!

What is a cumulative tax basis?

Well, an employee’s tax is usually calculated on a cumulative basis. What this means is each payday, all your earnings and all tax credits from 1 January of that year are accumulated. This ensures you’ve paid the correct amount of tax and you’ve received the full benefit of all your tax credits.

If you don’t use your tax credits, or you’re taxed incorrectly, they’re carried to the next pay period within that tax year.

So basically, when your employer works out your tax liability, they’re calculating the total tax due from 1 January to the date when you received your most recent paycheck. What this means is, if your income is reduced, by say sickness or unemployment, you’ll have unused tax credits and you may be due a refund.

If this is all a bit confusing, contact Taxback.com today and we’ll take care of all the facts and figures for you.

What are the rules for claiming a tax refund if I’m sick or unemployed?

Say tax has been deducted from your wages since 1 January last and you’re now unemployed, you may be entitled to tax back. If you’ve not paid any tax, you won’t be due a refund.

Jobseeker’s Benefit, Illness Benefit and payments under the Occupational Injury Benefit Scheme (including Injury Benefit, Disablement Benefit and Incapacity Supplement) are taxable sources of income.

You should note that the first €13 of your weekly Jobseeker’s Benefit is not taxable.

If you’re receiving Jobseeker’s Benefit, Illness Benefit or a payment under the Occupational Injury Benefit Scheme and you claim a tax refund, the taxable portion of your Jobseeker’s Benefit, your Illness Benefit or your Occupational Injury Benefit payment and your wages are added together in order to determine whether or not you’re due a refund.

Rates

Unemployed or out of work sick

The amount of tax back you may be due depends on;

How long you’ve been unemployed
How much tax you’ve paid
The number of tax credits you’ve used
How much you are receiving as a weekly social welfare payment

How is my tax refund issued?

If you were sick or unemployed any time in the past 4 years, you should apply for your Irish tax refund with Taxback.com and we will send the refund directly to your bank account.

How do I apply for a tax refund if I’m sick or unemployed?

When claiming a tax refund while unemployed, you should wait 4 weeks from the date of your unemployment. In the case that emergency tax has been deducted by your employer, you should apply immediately.

If you’re getting another taxable income, including social welfare payments, you should wait 8 weeks from the date on which you become unemployed.

You can apply online via the Revenue Online System or by filing a tax repayment Form P50.

On sick leave or unemployed?

Claim Your Tax Refund Here!