Sinn Féin spokesperson on Finance Pearse Doherty TD has condemned the ‘regrettable and unnecessary’ taxing of people on Pandemic Unemployment Payment.
Some recipients have been hit with bills of up to €1,400, Deputy Doherty said, during a 20-week period that the benefit was an Urgent Needs Payment, and “therefore not subject to tax by law”.
This decision has led to workers receiving tax bills much higher than they would otherwise have been.
Yesterday, over 200,000 taxpayer units received tax bills for the Pandemic Unemployment Payments they received in 2020.
Deputy Doherty said: “This will be unwelcome news at an already difficult time where people are struggling.
“An unprecedented decision by government last year has resulted in many of these taxpayers receiving tax bills as much as €1,400 higher than they should have been.
“The Pandemic Unemployment Payment was introduced as an Urgent Needs Payment under Section 2020 of the Social Welfare Act.
“Under Section 126 of the Taxes Consolidation Act, these Urgent Needs Payments are explicitly exempt from income tax.
“This was the case for 20 weeks until the PUP put on a statutory footing on August 5th.
“In the Finance Act, which passed in December, the government decided to change the law and have it apply back in time, so that the PUP would be subject to tax for those 20 weeks.
“This is despite the law at that time making it exempt from tax during that period.
“For many today, this will have made their tax bill as much as €1,400 higher than it would otherwise have been.
“That is regrettable and totally unnecessary, especially during such a difficult time.”
