AIB has confirmed that 1,600 people affected by a glitch in its systems which meant some tax relief at source payments were not made in February will get a refund in a single lump sum "as soon as possible".
It was reported at the weekend that the bank error was costing families up to €375 each and would take nine months to resolve. However, The Irish Times understands the average shortfall in these customers’ accounts is €100.
The bank has also confirmed the tax relief at source for February will now be paid in full in one single payment “as soon as possible” and not over nine months as was reported.
While its spokeswoman would not be drawn on when exactly the shortfall would be paid to its customers, it is likely they will hit affected accounts by the end of this month.
Around 350,000 mortgage accounts are eligible for mortgage tax relief across all the banks. It is paid automatically by Revenue to banks. Because the last day of February fell on a Saturday, AIB’s systems did not process 1,600 mortgage payments due on the 28th until the next working day, which fell in March.
Its systems then assumed no mortgage payments were made on those accounts for February so the tax relief was not passed on.
Until last year, the mortgage interest relief was automatically applied to qualifying mortgage holders but a rule change means that the relief is now only applied when the mortgage is actually paid.
The issue first came to light when people contacted the Revenue Commissioners inquiring as to why tax relief for February had not been processed. It received multiple queries about it from AIB customers but referred them to the bank as it had not been given any explanation from AIB as to why it had occurred.
In its statement released on Sunday, AIB expressed regret for "any inconvenience caused" and said it was "keeping the Central Bank fully informed on the matter".
Customers who find themselves in financial difficulty as a result of the shortfall have been advised to make contact with the bank. AIB has promised to support customers in this position.
The bank said it would be taking steps to ensure the problem did not reoccur.
