Illness and Injury Benefit

Illness Benefit

Illness Benefit is a short-term social welfare payment for individuals who are unable to work due to illness and have sufficient PRSI contributions. It is paid by the Department of Social Protection once your doctor certifies that you're unfit for work. The benefit is subject to income tax but is exempt from both USC (Universal Social Charge) and PRSI. If your employer continues to pay your wages while you’re out sick, they may receive the benefit on your behalf and adjust your PAYE accordingly.

Injury Benefit

Injury Benefit is part of the Occupational Injuries Benefit Scheme and is available to people who are unfit for work due to a workplace accident or occupational illness. Like Illness Benefit, it is subject to income tax (excluding any increases for qualified children), but it is not liable for USC or PRSI. The benefit is typically paid for up to 26 weeks and may be paid directly to you or to your employer if they are continuing to pay your salary.

Taxation and Employer Responsibilities

Illness and Injury Benefit are generally taxed through the PAYE system when paid via your employer. Other social welfare payments are usually taxed by adjusting your tax credits and standard rate cut-off point. If you’re off work and in receipt of one of these benefits, and your employer receives it on your behalf, the tax is collected automatically through payroll. No USC or PRSI applies to these payments, and increases for qualified children are not taxable.

Employers are required to adjust their PAYE procedures to account for the taxable portion of any Illness or Injury Benefit received. They do this by including the amount in the employee’s gross earnings for tax purposes. The Department of Social Protection will notify employers of the amount of taxable benefit and the date it began, ensuring the correct tax is applied.