Taxes Consolidation Act 1997 section 189B

Exemption in respect of periodic payments for personal injuries

Section 189B exempts from income tax periodic payments made to an individual under a periodic payment order as compensation for personal injuries.

• The Civil Liability (Amendment) Act 2017 empowered courts to award periodic payments under a periodic payment order (PPO) instead of a lump sum, primarily in cases of catastrophic injury requiring long-term permanent care.
• To qualify for the exemption, the payments must be made under a PPO under the Civil Liability Act 1961, or under a corresponding order made in accordance with the laws of another country.
• PPO payments may cover future medical treatment, future care, assistive technology and other aids, and — where both parties consent in writing — future loss of earnings.
• Any periodic payment received under a qualifying PPO in a year of assessment is fully exempt from income tax and is not reckoned as income for the purposes of the Income Tax Acts.