Niall Collins (Limerick County, Fianna Fail)
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304. To ask the Minister for Finance to examine the case of a person (details supplied); if he considers this to be acceptable; and if he will make a statement on the matter. [7378/25]

Paschal Donohoe (Dublin Central, Fine Gael)
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The Standard Capital Superannuation Benefit (“SCSB”) is a relief from income tax arising from a lump sum payment connected with the termination of an employment. SCSB is computed at 1/15th of a taxpayer’s average annual pay for the last 36 months in employment. Annual pay in this regard means pay from the employer and does not include any benefits paid by the Department of Social Protection in the previous 36 months, for example, maternity benefit.

I am advised by Revenue that in cases where unpaid leave is taken and where there was no salary for a number of weeks in the previous 36 months, an individual is allowed to add other weeks (i.e., weeks from months 37, 38 or 39, etc.) when calculating the average salary over the last three years of continued service. Examples of such periods would include unpaid maternity leave, unpaid paternity leave and unpaid parental leave. This treatment is available so that individuals who take unpaid leave during this 36 month period are still able to use a 36 month basis for the calculation of the relief. This may provide for a higher level of income tax relief under the SCSB that would otherwise be available.

I have been informed by Revenue that there has been correspondence directly on this matter with the individual in question and it directly confirmed the way in which SCSB is calculated.

The Revenue website sets out further information on the tax treatment of lump sum termination payments in the hands of the employee, and that information is accessible at:

www.revenue.ie/en/personal-tax-credits-reliefs-and-exemptions/lump-sum-payments/index.aspx

Revenue have recently updated their Tax and Duty Manual Part 05-05-19 Payments on Termination of an Office or Employment or Removal from an Office or Employment