Thursday, 5 March 2020
Department of Finance
The tax treatment of certain benefits payable under the Social Welfare Acts is dealt with under section 126 of the Taxes Consolidation Act of 1997.
The Living Alone Allowance is an extra payment made to individuals who are 66 years of age or over, and are in receipt of any of the following Social Welfare payments:
- the State Pension (Contributory);
- the State Pension (Non-Contributory);
- Widow's, Widower's or Surviving Civil Partner's (Contributory) Pension;
- Widow's/Widower's Pension under the Occupational Injuries Benefit Scheme;
- Incapacity Supplement under the Occupational Injuries Benefit Scheme; and,
- Deserted Wife's Benefit.
The Living Alone Allowance is also paid if a person is under 66 years of age and in receipt of any of the following Social Welfare payments:
- Disability Allowance;
- the Invalidity Pension,
- Incapacity Supplement; or,
- Blind Pension.
The tax treatment of the Living Alone Allowance reflects the tax treatment of the underlying Social Welfare payment which the individual is in receipt of; thus the allowance is taxable where the underlying payment is taxable, and the allowance is already exempt from tax where the underlying payment is specifically exempted from taxation. Any change to this approach can happen only in the context of the Budget and Finance Bill process but there are no plans to depart from the present arrangements regarding the tax treatment of the allowance.