Social welfare pensions paid by the Department of Social Protection (DSP) are liable to tax but not USC or PRSI. The DSP gives Revenue information on the taxable amount of these pensions.
How the tax is collected depends on whether you’re a PAYE taxpayer or self-employed. If you’re a PAYE taxpayer, your annual tax credits and rate band on your Tax Credit Certificate (TCC) will be reduced to take account of your pension.
If you’re self-employed, you should include details of any social welfare payments on your Form 11 and pay the tax due when making your annual tax payment.
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