Dáil Éireann Debate, Wednesday - 15 January 2014
124. Deputy Martin Heydon asked the Minister for Finance the reason jobseeker's benefit payments are taxable while jobseeker's allowance payments are not; if this places an unfair disadvantage on those who are only recently unemployed, when they do eventually find work; and if he will make a statement on the matter. [1081/14]
View answerJobseeker's Benefit is a weekly payment from the Department of Social Protection (DSP) to individuals who are out of work and who are covered by social insurance (PRSI), regardless of any other income or assets they may have. Jobseeker's Allowance is payable to people who are out of work who don't qualify for Jobseeker's Benefit or who may have used up their entitlement to Jobseeker's Benefit. However, Jobseeker's Allowance is means-tested, meaning a potential recipient s assets and income must be below a certain level to qualify.
If Jobseeker s Allowance were taxable it would only serve to further reduce the means of recipients, potentially making it necessary to increase the payment to which an individual is entitled to from DSP, which could result in a circular series of payments with neither the recipient nor the State being better off.
Although Jobseekers Benefit is subject to income tax, recipients only actually pay tax when their income exceeds the same thresholds that apply to other taxpayers. While those who take up employment in a tax year having been in receipt of Jobseeker's Benefit for a part of that year may have a greater tax liability in that tax year than those individuals in similar circumstances who were in receipt of Jobseekers Allowance for a part of that year, the difference is justified by the different nature and qualifying conditions that apply to both payments.
