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Covid-19 Pandemic Unemployment Payment

Dáil Éireann Debate, Wednesday - 6 April 2022

Wednesday, 6 April 2022

Ceisteanna (46)

Richard Boyd Barrett

Ceist:

46. Deputy Richard Boyd Barrett asked the Minister for Finance if the persons who were in receipt of the pandemic unemployment payment in 2020 and 2021 may still have a tax liability pending; and if he will make a statement on the matter. [18858/22]

Amharc ar fhreagra

Freagraí scríofa

The Pandemic Unemployment Payment (PUP) was a social welfare payment for workers (employees and self-employed) who were out of work due to the COVID-19 pandemic. The taxation arrangements for the PUP, as legislated for in Finance Act 2020, reflected the standard approach to taxing social welfare type payments, which meant they were liable to income tax but exempt from the Universal Social Charge (USC) and Pay Related Social Insurance (PRSI).

The PUP was not taxed in the normal ‘real-time’ manner in 2020, meaning the collection of any tax due was deferred until year end. This approach was adopted to ensure payments reached recipients as quickly as possible given the suddenness of the pandemic and on the expectation at the time that the emergency supports would be short-term in nature, which turned out not to be the case due to the continued prevalence of COVID-19.

The continuation of the PUP into 2021 re-established the practice of operating PAYE in the normal (real-time) manner for such payments. The mechanism to tax the PUP in 2021, in common with other Department of Social Protection (DSP) payments such as Jobseekers’ Benefit and Illness Benefit was to reduce the recipient’s tax credits and rate bands.

Revenue has confirmed that persons in receipt of PUP during 2020 and 2021 may have an outstanding liability on their Revenue record:

- Where returns in respect of 2020 were submitted in 2021, any outstanding liabilities after any additional tax credits such as health expenses have been applied, are being collected interest free over four years from 1 January 2022 by reducing the employee’s tax credits. To date over 230,000 PAYE taxpayers who were in receipt of PUP payments in 2020 have submitted income tax returns for that year.

- Where an individual submits their tax return in 2022 in respect of 2020 and/or 2021, the balance of any remaining liabilities after any additional tax credits such as health expenses have been applied, can be collected interest free over four years from 1 January 2023 by reducing the employee’s tax credits. Revenue has confirmed that over 144,000 PAYE taxpayers who were in receipt of PUP payments in 2021 have submitted income tax returns for that year.

Taxpayers can view their Preliminary end of Year Statement online through the myAccount facility on www.revenue.ie where they can also review their tax position and submit their tax return.

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