The Minimum Subsistence Allowance (MSA) is a tax benefit for all employees. The amount of allowance varies on the employee's marital and family status, including dependent children. Employees can benefit from the MSA by filling out a declaration form and indicate information relating to their marital status, spouse's employment status and dependent children, if any.
The employees are responsible for providing truthful information and must inform their employer of any changes in their family status within 1 month, at the latest. While the responsibility of providing up-to-date MSA information rests with the employee, employers are recommended to periodically remind their employees to update their MSA information on their file to avoid potential tax fines.
Periodically and especially at the beginning of the calendar year HR departments can remind employees to update their MSA information especially for the below mentioned scenarios:
- Changes in marital or family status (marriage, divorce, birth of a child, etc.);
- Changes in the dependency status of the employee's children: children who are under 18 and children who are over 18 but under 25, enrolled in full-time studies are considered dependent children;
-Important: In cases where both spouses have employment income, only one spouse must benefit from the MSA.
- Retirement of the spouse;
- Changes in spouse's source of income i.e., switching to employment income from business income and vice versa;
- Changes in employee's employment: working for more than one employer in which case the MSA declaration must be processed by the employer paying the higher salary.
to download the Minimum Subsistence Allowance declaration and information sheet.