Question about IOAW benefit? Get free advice!


Questioner

I have been receiving an IOAW benefit since 2013. Gross income from other activities is fully withheld from this benefit. For example: if I earn €750.00, the full amount of €750.00 is withheld, which means I receive a lower IOAW benefit. I have to reserve a portion of this lower IOAW benefit to pay the tax on €750.00 each month in the form of a provisional assessment. Is this correct? I guess I am actually paying twice (once withheld by the municipality, resulting in a lower benefit, and once paid to the tax authorities)? The municipality is not answering. Who should actually pay tax?

Lawyer

You pay the same amount of tax on balance as if you had no income. Suppose the IOAW benefit is €1000.00 and you have to pay 10% tax. The tax then amounts to €100.00. If you have your own income of €750.00 and a benefit of €250.00, you pay €75.00 tax on your income (10%) and €25.00 on the benefit (10%). On balance, you then also pay €100.00 tax.

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