Revenue issued a note to employers and pension providers last week giving details of the administration of the new paternity benefit which has been introduced in respect of births and adoptions on or after 1 September 2016.

Paternity benefit is liable to income tax but USC or PRSI do not apply. Individuals, who pay their tax through the PAYE system will, where possible, automatically have their annual tax credits and rate bands reduced by the amount of the paternity benefit paid. Employers and pension providers will be notified of the adjusted tax credits and cut-off points on the employer tax credit certificates. The payment of paternity benefit should not be included on forms P45, P60 or P35L.

Any queries on such payments should be directed to the Department of Social Protection.