Dáil Éireann Debate, Wednesday - 7 October 2020
71. Deputy Pearse Doherty asked the Minister for Finance if payments made through pandemic unemployment payment can be taxable by law in view of the fact that it was introduced under section 202 of the Social Welfare Consolidation Act 2005 which as an urgent needs payment is not liable for tax as clarified by section 13 of Finance Act 2018; and if he will make a statement on the matter. [29219/20]
Amharc ar fhreagraAs a general rule, all social welfare payments are subject to taxation, unless specifically exempted. These exemptions in general may apply to means tested-payments.
As I have previously advised, the position is that payments made under the Pandemic Unemployment Payment (PUP) Scheme are an income support and share the characteristics of income. Other income earners in receipt of comparable “normal wages” are taxable on those wages. It is also the case that PRSI contributions are attributed to persons in receipt of the PUP. In the interest of equity, therefore, payments made under the PUP scheme are subject to income tax; the taxation position will also follow the general taxation rule for social welfare payments and, thus, while liable to income tax, the payments will be exempt from PRSI and the Universal Social Charge.
Finally, in relation to the Deputy's reference to urgent needs payments, the PUP may have been designated as such but only for social welfare and budgetary provision purposes.
