Bríd Smith
Question:48. Deputy Bríd Smith asked the Minister for Finance the number of pandemic unemployment payment recipients who have received demands for tax owed as a result of the payment. [6182/21]
View answerThursday, 4 February 2021
Questions (48, 49)
Bríd Smith
Question:49. Deputy Bríd Smith asked the Minister for Finance if his attention has been drawn to pandemic unemployment payment recipients who are being taxed on incorrect estimates of the payment by the Revenue Commissioners; and the number who have contacted his Department as a result of incorrect figures. [6184/21]
View answerWritten answers
I propose to take Questions Nos. 48 and 49 together.
The Pandemic Unemployment Payment (PUP) is a social welfare payment for workers who have become unemployed due to the COVID-19 pandemic. PUP payments are classified as income supports and share the characteristics of income from a taxation perspective. This is important from an equity point of view as people unaffected by the pandemic who receive ‘normal’ wages to a similar value are taxed in the usual manner. The taxation arrangements for the PUP were legislated for in Finance Act 2020 which reflects the standard approach to taxation of social welfare type payments, including exemption from USC and PRSI.
Revenue advise me that the Department of Social Protection (DSP) shares taxable benefit payment details, including information relating to the PUP, with Revenue in accordance with the Social Welfare Consolidation Act 2005. These data exchanges are subjected to rigorous testing procedures to ensure any information updated to taxpayers’ records is accurate and fully reflects the information provided to Revenue by DSP, thereby ensuring they pay the right amount of tax in respect of their overall taxable earnings. Revenue has confirmed that the 2020 PAYE ‘Preliminary End of Year Statements’ (PEOYS), which were made available to all employees on 15 January 2021 included the PUP related data provided by DSP. This data reflected the actual PUP payments made to each person and did not include any element of estimation. It is, however, possible that the final year position for 2020 for some employees could alter if subsequent updates are provided to Revenue by DSP for that year, for example arrears payments or additional taxable welfare payments.
As regards the number of PUP recipients who have a tax liability now arising from receipt of the payment, Revenue have advised me that they published a detailed breakdown of the position of PAYE taxpayers for 2020, based on their PEOYS. The information is available at the following link,:
https://www.revenue.ie/en/corporate/documents/statistics/registrations/paye-preliminary-eoy-statements.pdf ,
It shows the distribution of overpayments and underpayments, by amount (including averages), for all relevant PAYE taxpayers. This includes those who received the Pandemic Unemployment Payment (PUP) and the Temporary Wage Subsidy Scheme (TWSS) either separately or combined. The published information also includes those who did not receive any PUP or TWSS payments. While it is not possible to identify whether an underpayment is solely due to a taxpayer unit having been in receipt of the PUP, table 2 sets out the position for those taxpayer units who received only the PUP and not a combination of the PUP and the TWSS, table 3 sets out the position for those persons who underpaid in increments of €100; and table 4 provides information on taxpayer units who received a combination of the TWSS and the PUP.
Finally, I am informed by relevant officials that they are not aware of having received any contacts in the Department from individuals as a result of incorrect figures. However, in the normal course of events, such approaches would be dealt with by Revenue. In this regard, Revenue have confirmed that they provide a PAYE Helpline for employees. It receives significant volumes of calls each day in respect of all aspects of PAYE, including the taxation of social welfare payments.