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THE OIREACHTAS FINANCE Committee has voted in favour of a section of the Finance Bill, which clarifies that the Pandemic Unemployment Payment is subject to income tax.
The weekly payment was rolled out in March for workers who lost income as a result of government-imposed public health restrictions.
Over the course of its lifespan, government ministers and the Revenue Commissioners have said that the payment, like other social welfare payments, is subject to income tax.
This is despite the fact that when the PUP was given legal footing in August, the government characterised all payments under the scheme made between April and August as “urgent needs payments” under Section 202 of the Social Welfare Consolidation Act 2005.
Payments of this type are usually not subject to tax.
The Finance Bill, which will give legislative effect to Budget 2021, is currently being debated by Members of the Oireachtas Committee on Finance, Public Expenditure and Reform.
Opposition TDs have accused the government of trying to ‘sneak’ a section into that bill, which enshrines the taxability of the PUP in Irish law.
But speaking in front of the Oireachtas Finance Committee this morning, Finance Minister Paschal Donohoe said that the initial characterisation of the PUP as a Section 202 payment was simply a matter of convenience.
“These payments were paid out under Section 202 of that bill because of the need to make these payments quickly and to associate them with a relevant clause in the social welfare legislation,” he said.
Unlike other Section 202 payments, he said, the PUP is not “means-tested” and is therefore subject to tax.
“I want to make clear though, from the very start, the intention of the government was that those payments would be taxed and they will be treated in the same way as we tax other equivalent social welfare payments,” Donohoe added.
Sinn Féin finance spokesperson Pearse Doherty accused the minister of “trying to rewind back the clock and to make a payment that was paid to people who lost their jobs during the pandemic, taxable”.
“I think there are serious issues in relation to this, particularly around the principle of retrospective taxation. Regardless of whatever the minister’s personal intentions were or the government’s personal intentions, the legal basis for this payment that was paid out — which was hundreds of millions of euro at the time — was Section 202 of the Social Welfare Act, and therefore, as a result, was not taxable.”
The Committee voted in favour of the section of Finance Bill by five votes to four this afternoon.
In September, Revenue confirmed that PUP recipients will have the option to pay back whatever tax is owed at the end of 2020 if they wish.
Alternatively, they can allow the Revenue to deduct the liabilities through reductions in their tax credits over a period of four years.
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The magic money tree is running out of money, but still plenty of money to pay public and civil servants until the end of time.
@Paul Mc: I’m not a civil servant but why wouldn’t they get paid? They work for it!
That’s very different to a social safety net like PUP or the normal social welfare payments.
The rest of the world looks on in envy I’d imagine.
@Paul Mc: What’s your alternative?
@Paul Mc: Because they are still working, can you post anything that is half intelligent?
@Paul Mc: yes…. a wage bill which is accounted for, approved and announced annually as part of that thing called the budget. They don’t fluctuate like PUP numbers, nor are they, for the most part, paid extortionately high wages.
@Kevin Cassidy: “a wage bill which is accounted for, approved and announced annually”………. yes approved by other civil servants and protected by PS trade unions inside the cosy protection of the State.
@Paul Mc: and the unemployed, carees, OAPs, child allowances etc
@Paul Mc: are you upset that we are paying teachers , Garda, nurses ? Nurses, remember them , they were the heros a few months ago ?
@PaulOMahoney Irish: working? Half of them are at home scratching their …
The PUP was always going to be taxable so I’m not sure why Pearse Doherty is suddenly getting his knickers in a knot over it.
Anybody who lost their job and/or had the PUP as their sole source of income will likely have sufficient tax credits to cover any charge.
@Kendra Jackson: Agreed.
@Kendra Jackson: ur wasting your time talking sense here, some people just don’t get it
@Kendra Jackson: I wonder is the 15,000 which was lying in certain people’s accounts liable for tax.
@Kendra Jackson: the doc is always shouting his mouth off, out of curiosity have SF any other TDs that are allowed speak. It’s all Pearce Pearce Pearce
@Kendra Jackson: because he is a gob€)(;e who never had to worry about where money comes from
@Tim Quigley: not if it was only resting in the account
Here’s your Christmas bonus… whoops, wait there now – we’ll have that back in tax please.
@Daniel Dunne: no such thing as a free lunch. Pay the tax due over 2022-2025 and it won’t even be noticeable.
All other social welfare payments are taxable, so why shouldnt pup be taxable, sinn fein whould have the country bankrupted
@mark o donovan: good luck to revenue getting any money back off people on SW
All SW payments are taxable including my OAP. Nothing new there.
Ouch better off on the dole so
@pat murphy: The dole is taxable
@pat murphy: Dole is taxable all social welfare is taxable but tax credits and tax bands make it that there is no liability. This will be the case for many with pup too.
@Thomas O’ Donnell: Jobseeker Allowance actually isnt taxable. Jobseeker Benefit based on contributions paid however is!
@Julie Sullivan: it’s still taxable. You’re confused with means tested.
@Julie Sullivan: it is taxable,
If we take tax from the old, disabled, carers , jobseekers etc, then why not from the pandemic unemployment payment also, unless for equality we refund the tax on all other classes of payments to equally deserving people.
We were told this in March. Why is it news, again now.
If you lost your job due to covid and were receiving pup payment, and if you can’t find other work, how do you pay or afford to pay tax back? I don’t really know too much about how this all works……. Would it come out of your jobseekers payment? If your married and only receiving 140 jobseekers would they still deduct from that?
@Sam Glynn: if you’re only receiving the PUP then your tax credits will more than likely cover any liability.
@Sam Glynn: Huh if your receiving SW you can’t be getting PUP
@PaulOMahoney Irish: no, what I meant was if you were receiving pup and then end up on jobseekers due to being made redundant and not finding another job too easily. Of course if your on jobseekers you are not entitled to pup.
@Sam Glynn: it depends on your earnings and tax for the year. All social welfare is taxable (SF are trying to be pedantic but everyone knows this was social welfare, but accelerated to get it to people and keep them officially employed). It’s an issue if you are low paid or part time and outside the tax bracket, and suddenly on €20k PUP needing to pay taxes. If you have a reduction, then it’s likely revenue could owe rebates, but more than likely a small difference.
it was always going to be taxed. its income… the revenue were on radio about it months ago, saying how people can stagger the tax payments.
Go and pay there tax like everyone else ffs . There’s more money put into savings since this Pandemic started
There is not this endless pit of money. We pay taxes so that we can pay for services. The idea we can get money free gratas is idioitic and would be unsustainable.
@GS (Retd): tell that to SF and the money tree brigade
Pearse Doherty is the genius who want us to build a monument to a shipwreck that has been rotting on a beach in Donegal. WE DONT HAVE ANY SPARE MONEY..
@DeWitt: No we don’t. Wonder where it all went?
@The Irish Bull: Paying billions in PUP assistance for business since March, lower income tax lower vat and so on.
@The Irish Bull: it was all spent on social welfare
How can you tax somebody who let’s say normally took home 600 euro and by no fault of his or her own were told by government “Sorry but we are not letting you work for the foreseeable future but hey don’t worry we will give you 350 a week” These are hard working people who have families mortgages and bills who are already down 250 euro through no fault of theirs and now government want tax out of the 350. I say Remember it at the Ballot box. Shameful
You wouldn’t get 350 on mininal wage . no incentive to go back to work
This is price PE0PLE PAY who do not hold ther TD to account who are elected to hold the Govt to Account on VOTED EXPENDITURE.
This lockdown is a GOVT decision in response to N P H E T view that the health service unable to deal with Covid case unless the country locked down when FIVE BILLLION EURO voted expenditure for health not spent.
TD in Dail did not hold government to account for the whereabouts of that money to and to see if minister could deal with N P H E T concerns with that money.
M L McD spoke to MINISTER about that VOTED EXPENDITURE rather then holding him to acct to the DAIL. Is that what voters want ?
Do u actually want to be billed for borrowing for health and then not be told where money is going? Cos that is what is happening. TD will pass that F Act.
The constitution does not allow government use any public monies without DAIL approval of their use for a purpose.
That is why government present the Dail with estimates of departmental spending for approval government must have to raise fund but to spend for that purpose .. voted expenditure.
The dail hold the Govt to account to Dail on that expenditure.
Otherwise who do voters rely on to protect voters from cost of government going off budget? But dail did not do that here.
The EU Commission may be the problem but the treaty that make macro economic programe condition of loan is for DAIL to deal with. The big cost to cits is that DAIL is not holding govt to account.
M L McD found out why five billion not being used perhaps in private consultations with minister ? Is that appropriate for a TD? Leave voter/taxpayer in dark rather than hold min to explain to DAIL.
One way or anor Citizens are paying for TD refusal to hold the government to account to the DAIL for unspent voted health expenditure.
If people do not start holding TD to account for not holding govt to account on DAIL APPROVED spending then do not be surprised if more austerity is to come.
This is the PBO chart of health expenditure for 2020 showing five billion unspent.
The parliamentary budget office produce a guideline for TD on how to scrutinize budget and warn TD that the TWO BILLION EURO voted for COVID HEALTH COSTS be kept separate from NON COVID HEALTH COSTS so that we can vouch covid health cost from the EU.
I wonder if the Dail is holding the government to account on that or are we going to be left carrying these costs cos Govt cant vouch them.
Covid health costs are the only covid cost a member country can recover from the eu with no strings of compliance with macro economic program for LOANS.
But instead of us getting that TWO BILLON BACK The EU is lending us 2.5 billions.
And advise is all there to TD in the parliamentary budget office guide books.
@Mary Ward: Interesting post but without links its hard to follow or understand.
@Mary Ward: info overload
U get nothing for nothing & personally ive no issue with this.as mee da always said,if from an early age u get it in2 ur head that uve always got 2 give the tax man a slice of ur cake,then ul soon accept that’s just the way is
Farm Subsidies are TAXABLE
Will all our senators be paying back the €345 euro/ week for the 2 months they ware in lockdown . This was expencices only (not wages)
That’s fair as people who lost their job just prior to the pandemic and week may have been earning over a thousand a week and paying more taxes than many on the PUP are only getting the standard 203, while others who lost their jobs a month later are getting almost double that. It’s an unfair system to those people and that had the added burden of being means tested unlike the PUP recipients but are getting half the rate despite living in the same country with the exact same struggles during this time. I fully support your government’s decision to tax the PUP, if people don’t want to be taxed that can switch to the standard dole. Right now most of these people aren’t just awaiting their employer to take them back, many are fully unemployed and are jobseekers like every other jobseeker and should be treated the same
have your say