New legislation could remove non-taxable health benefit, warns Aon Consulting

Matthew Lawrence, Practice Head ñ Risk & Healthcare commented:

ìLegislation came into effect yesterday that was intended to ensure fairness across the workforce and formally exempt health screening and medical check-ups from personal income tax. However, at the moment, this legislation is confusing and may actually result in the removal of this benefit from thousands of employees, or cost them additional tax.

ìThe legislation, an ëAmendment of the Income Tax (Exemption of Minor Benefits) Regulations 2002í, means that employees will not have to pay tax on health screening and medical check up health benefits, but only if health screens are available to all employees, and medical check-ups are available to either all employees, or to all employees that have been identified by a screen, as needing a check-up. If these criteria are not satisfied then the health screenings and medical check ups will be taxable.

ìBut the terminology used in the legislation is confusing. For example, what the legislation defines as a ìhealth screenî is really an assessment to identify employees that may be at a particular risk of ill health. What Aon, and many employers, would normally consider to be a ìhealth screenî is a combination of the legislationís definition of a ìmedical check-upî and a lifestyle assessment.

ìBefore this amendment, not being taxed on health screens was a practice that was acknowledged by the Revenue, but not one that had any legal standing.î