Income Tax hit on PUP payments this year must be changed

Seán Sherlock TD
10 February 2021
  • Frontloading of tax bills not acceptable and unfair to hardest hit workers

Labour Spokesperson on Social Protection Seán Sherlock TD has said that the Government must stop moving the goalposts during the game with revelations that PUP recipients this year who return to work will have to pay tax on payments immediately.

Deputy Sherlock said:

“With the drip, drip of news from the Tanáiste yesterday that the March 5th reopening date is not set in stone, and with no clear plan in place for when we do reopen, workers will remain on the PUP for much longer than originally thought. Then, to be hit with the news that tax will have to be repaid immediately on this payment adds further insult to injury.

“This change in approach by Revenue is going to cause massive worry and stress to workers already concerned about their future. Workers hit by the pandemic face great uncertainty this year with no sense of when they will return to work and their incomes and job security have been hit hard.

“Even when people do return to their employment, the money workers take home after tax will be significantly reduced. It’s at odds with the lived reality of these workers. This is a further change by the government and very unusual given that the initial tax plan from Government was that tax owed on PUP payments from 2020 will be paid back in increments between 2022 to 2025.

“There is not agreement on that taxation approach either and we have raised constitutional issues with the government about that retrospective taxation of the PUP and called for 2020 PUP tax bills to be waived recognising that these workers have lost their jobs through no fault of their own.

“I would urge the Minister to intervene on this issue, ensure that this tax bill isn’t frontloaded and communicate with recipients at the earliest opportunity. The issue of fairness is at stake here, especially when there is no sight on a full return to work for those on the PUP.”

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