Volunteers receiving benefits may have to repay part of their benefits due to any volunteer allowance they receive. From answers Parliamentary questions reveal that the volunteer scheme is perceived as unclear and unfair.
Volunteer scheme
The volunteer scheme is, by its very nature, a tax scheme. People who are regarded as volunteers for tax purposes can receive a tax-free allowance of up to €190 per month and €1,900 per year without having to provide any further supporting documents (these are the amounts applicable for 2023). We explain the volunteer scheme in our factsheet Volunteer.
Participation Act
People receiving benefits have their benefits reduced by the amount of resources (assets and income) they generate themselves. One of the exceptions to this rule is the income they receive for voluntary work. For the past few years, the Participation Act has referred to maximum amounts set out in tax legislation. However, this alignment does not apply to the definition of the term ‘volunteer’. On this matter, the implementing authorities have some discretion.
An important difference between the tax rules and the Participation Act is that, under the Participation Act, exceeding the maximum amounts does not result in the entire volunteer allowance being deducted from the benefit. The deduction only applies to the amount exceeding €190/€1,900.
If any of the specified amounts are exceeded, the tax relief scheme for volunteers ceases to apply; however, it is still possible to demonstrate that the volunteer has only been reimbursed for costs actually incurred. As long as these remain within the tax standards and regulations, no tax is payable. Under the Participation Act, too, demonstrable reimbursements for costs actually incurred are not deducted from the benefit.
Communication
The Government intends to clear up any ambiguities regarding the volunteer scheme by improving communication. It is emphasised that the volunteer scheme is not intended to offer the highest possible financial incentive to volunteers and/or to supplement the income of people on benefits, but rather to simplify the administrative burden involved in reimbursing the costs incurred in carrying out voluntary work. Furthermore, the Government considers it of great importance that paid work is not displaced by voluntary work.