Taxes Consolidation Act 1997 section 204

Military and other pensions, gratuities and allowances

Section 204 exempts from income tax certain military pensions, gratuities and payments related to wounds, disabilities and service with the Defence Forces.

• Wound and disability pensions granted under the Army Pensions Acts are exempt from income tax, but where a pension is only partly attributable to disability, the exemption applies only to the disability portion as certified by the Minister for Defence.
• Gratuities paid in respect of wounds or disabilities under the Army Pensions Acts, as well as military gratuities and demobilisation pay granted to officers of the National Forces or the Defence Forces of Ireland, are also exempt.
• Deferred pay credited to the pay account of a member of the Defence Forces under Defence Act 1954 regulations and gratuities granted in respect of Defence Forces service are covered by the exemption.
• All income falling within the exemption is fully exempt from income tax and is not included when computing the recipient's total income for the purposes of the Income Tax Acts.