Working mothers could lose up to €2,700 per child under Government plans to tax maternity benefit for the first 
time.
Under the current system, women do not have to pay any tax on the €6,812 of maternity benefit payments they get for six months after the birth of their child, the Irish Independent reports.
But from July 1 they will have to hand back up to €2,700 to the Revenue because the payments will be taxed at up to 41pc from that date.
Finance Minister Michael Noonan stood over the implementation of the cut, saying that some women were earning more while they were on leave than when they were in work.
“Part of the general policy is that persons shouldn’t enjoy a bigger take-home pay when they are out of work than in work,” he said.
However opposition politicians branded the move a “tax on childbirth” and a “grab by the taxman”.
Many women actually get more in their take-home pay while they are on maternity leave due to the way the system is currently set up. The State pays a maximum of €262 per week to a woman on maternity leave for six months — or a total of €6,812. Around 90pc of women on maternity leave get this amount.
But many public and private-sector employers opt to give a “top up” to ensure that a woman gets her full wages. And tax is only paid on this “top-up” payment, meaning that women on maternity leave often end up with more in their pay packet.
Mr Noonan said it was never intended to provide a “financial gain” for those going on maternity leave. He said that even though maternity leave would now be taxed at either the lower 20pc rate or the higher 41pc rate, it would not be subject to the universal social charge or PRSI.
“I think most people would be happy if they would have the same (wages) on maternity leave as they have at work,” he said.
Around 48,000 women a year receive maternity benefit while they are off work with a new baby.
Fianna Fail finance spokesman Michael McGrath said the taxing of maternity benefit would lead to a severe hit on working women.
“€107 out of €262 per week in maternity leave is a fair whack for a woman who is pregnant to take,” he said.
And Independent TD Richard Boyd Barrett said the move was “anti-women” and “anti-family”.
“You should be upholding that acknowledgement of the work women do for our society. It’s entirely right and proper that they should be slightly better off,” he told Mr Noonan.
Mr Noonan was speaking at the Oireachtas finance committee on the 2013 Finance Bill, which will implement the taxation of maternity benefit and other remaining measures of Budget 2013.