The €250 “once-off credit” given to students before Christmas is subject to a €50 tax claw back for up to 33,200 students.

A fee refund of €250 was given to students of third level institutions before Christmas to compensate for the lack of on-campus teaching after being announced in Budget 2021.

In response to a written question from James O’Connor TD, the Minister for Finance, Paschal Donohoe stated that this fee refund will be subject to tax from Revenue, when not awarded through SUSI.

The €250 refund is being processed as a credit note against the nest year’s fees for students continuing to study in the 21/22 academic year, for these students, the refund will reduce their student contribution from €3,000 to €2,750.

The student contribution is liable for a tax credit of 20%, €600. However, as the contribution students will have to pay will be lower due to the refund, that tax credit will drop to €550.

Minister Donohoe concluded his statement saying; “I currently have no plans to seek to change this position.”

For full-time students who are not eligible for the SUSI grant, An Revenue informed Minister Donohoe that: “if an amount is refunded against the student contribution towards tuition fees, it may result in the net tax deduction being less. The tax deduction is a proportion of the eligible amount paid. Where the eligible amount paid is less, the tax deduction will less.” This may affect up to 33,200 students, the number who availed of this 20% tax back in the previous academic year.

Minister Donohoe concluded his statement saying; “I currently have no plans to seek to change this position.”

Speaking to the Sunday Business Post, a spokesperson for Minister for Higher Education Simon Harris, said that he “had been advised by the Revenue that the taxable nature of the €250 grant would not give rise to a tax liability ‘for the majority of full-time students’.”

The credit note is also taxable income and although students in other institutions will be able to apply to institutions to write the tax credit off against library fees or gym memberships, the latter will not be possible in UCD as it is facilitated through the student levy.

The 70,851 students who avail of the Student Universal Support Ireland (SUSI), per the most recent Revenue statistics, will not be subject to this tax clawback, this payment amounted to €17,712,750, 

Final year students who received the refund directly from colleges will not be affected either. Single-student homes will also not be impacted by this change as they were not eligible for the tax credit, the refund may have a tax incidence despite this.

Hugh Dooley – News Editor