Dáil Éireann Debate, Thursday - 1 October 2020
197. Deputy Emer Higgins asked the Minister for Social Protection if taxable income as verified by the Revenue Commissioners' tax returns is used as the basis for calculations for pandemic unemployment payments; and if allowances such as car depreciation allowances are not being used to decrease income verified by the Revenue Commissioners. [27784/20]
View answerThe Pandemic Unemployment Payment was introduced as an emergency measure to provide an income support to those who had lost their employment as a result of Covid. In order to ensure that the scheme was simple and accessible for the unprecedented number of applicants, a flat payment rate was introduced. This rate was the equivalent of the rate for a two-person household.
From 26 June 2020, the Pandemic Unemployment Payment moved to 2 rates of payment, and a 3 rate structure is in place since 17 September. These changes more closely link the rate of payment to the amount that individuals previously earned and make the scheme more targeted and fair. In determining the rate payable, the objective was to ensure that recent earnings were taken into account.
The rate of the Pandemic Unemployment Payment for a self-employed person is calculated by reference to their reckonable income in either 2018 or 2019, whichever is the greater. Details of reckonable income are supplied to the Department by the Revenue Commissioners, and are supplied net of business related costs, including capital allowances. When submitting returns to the Revenue Commissioners, self-employed persons can offset business related costs against gross trading income, with the resulting assessment to tax and PRSI based on net profits. In that regard, capital allowances are available in respect of qualifying capital expenditure incurred on the provision of certain assets in use for the purposes of a trade or business. They effectively allow a taxpayer to write off the cost of an asset over a period of time and to reduce their reckonable income as a result.
I hope that this clarifies the matter for the Deputy.
