Maintanence Payments in Ireland

Firstly, how maintenance payment is treated for Income Levy depends on whether you have voluntarily agreed to pay maintenance or if there is a legally enforceable agreement

Voluntary Payment: the spouse making the voluntary maintenance payment is not exempt from paying the income levy on that amount paid from their income.

The spouse receiving the voluntary maintenance is exempt from the income levy on the amount that they receive.

Legally enforceable maintenance payment: The spouse making the payment is exempt from paying the income levy on the portion of their income that is paid for maintenance to the spouse (no exemptions due in relation to the income levy on the payment of maintenance of children).

The spouse who received the payment is subject to the income levy on the portion of the maintenance that they receive themselves.  Again as above any part of the maintenance that is paid toward the children is not subject to the levy.

Just to note, where a separated couple who have a legally enforceable agreement have decided to be jointly elected as married with Revenue for Income Taxes purposes, the spouse making the payment is not exempt from paying the income levy on that amount for maintenance and the spouse receiving the payment is not subject to the income levy on the maintenance.

PRSI Refunds

A separated or a divorced spouse may claim a refund of PRSI on enforceable maintenance payments made to his or her spouse. The PRSI due will be re-calculated on the reckonable pay/income reduced by the amount of maintenance payment.

Any excess Income Levy or PRSI paid will be returned by claiming a refund at the end of each tax year.