Wednesday, 3 February 2021

Questions (159)

Niall Collins


159. Deputy Niall Collins asked the Minister for Finance if a response will issue to correspondence (details supplied); and if he will make a statement on the matter. [5130/21]

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Written answers (Question to Finance)

The COVID-19 Pandemic Unemployment Payment (PUP) is a social welfare payment for employees and self-employed people who have lost all their employment due to the COVID-19 public health emergency.  As outlined from the outset, payments made under the PUP are income supports and subject to income tax.  Other income earners in receipt of comparable “normal wages” are taxable on those wages.  In the interest of equity, therefore, payments under the PUP are subject to income tax.  The taxation arrangements reflect the standard approach to taxation of social welfare type payments and, thus, is exempt from the USC and PRSI charges.

A €13 exemption for Jobseekers' Benefit (JB) provided for in s. 126(4)(b) of the Taxes Consolidation Act 1997 (TCA). This exemption does not apply to the PUP.  Given the differentials in amounts between the two payments, on tax equity grounds I do not consider that s. 126(4)(b) should be extended to the PUP.

In relation to the matter of increases for qualifying children (IQCs), these payments are exempted under s. 126(2B)  of the TCA. I am advised by the Department of Social Protection that the PUP does not give rise to IQCs.