Covid-19 payment claimants liable for small amount of tax, says Donohoe

Finance Minister Paschal Donohoe has said people will be liable for a “small amount” of tax on the Emergency Covid-19 Pandemic Unemployment Payment (PUP).

The Dail approved €6.8 billion in additional funding on Thursday for the Department of Social Protection to continue to fund social welfare payments.

Independent TD Marian Harkin said many people receiving the €350 weekly payment have no idea it is taxable or that they could be pursued by the Revenue Commissioners at the end of the year for tax they owe.

Mr Donohoe said: “If a tax liability is generated by the PUP – because it is €350 – I would imagine the amount of tax liability generated on this will be very small.

“The Revenue Commissioner would deal with this issue over a matter of years if the additional liability merits that.”

There were calls in the Dáil to maintain the payment at its current rate.

Independent TD Gino Kenny criticised people “dog whistling” and TDs calling for the payment to be cut.

Mr Donohoe said he does not think people on the €350 weekly pandemic unemployment payment are “living it up”.

He said: “There is no suggestion from me or anyone in the Government that anybody who is on the pandemic payment is in any way living it up.

Believe me, I understand the contribution that people on low income make to this society for the work that they do.

Earlier, Social Protection Minister Regina Doherty said she will bring forward proposals for some changes to the PUP next week.

Ms Doherty said she hoped the House would approve the Bill to allow future social welfare payments to continue.

<figcaption class='imgFCap'>Regina Doherty said if TDs did not approve the proposals, the Government could not continue a raft of social protection payments (PA)</figcaption>
Regina Doherty said if TDs did not approve the proposals, the Government could not continue a raft of social protection payments (PA)

“The failure to approve the estimates will mean my department won’t have a legal basis to continue with the payments which would be devastating for the people we are meant to serve,” she warned.

Ms Doherty told the House an extra €6.8 billion is needed – €4.3 billion of which will go towards the PUP and the wage subsidy scheme.

She said all payments would stop without the approval.

“Child benefit, pensions, carers payments, payments to lone parents, payments to people with disabilities and much more besides, including our community employment and all of our employment services – indeed our carer’s respite grant which is due next week.

“Without the approval today, we can’t proceed to make the necessary arrangements next week to process the due payments and all of our payments will cease.”

Ms Doherty also rejected claims that people are “gaming” the social welfare system.

<figcaption class='imgFCap'>(PA Graphics)</figcaption>
(PA Graphics)

She added: “Yes there is fraud, and there is fraud in every system and every other country. We are catching those people but they are in very small numbers. There is nobody gaming the system.

“There are some people getting more from it than they would have been earning in income and there are anomalies with part-time workers.”

Fianna Fáil’s Willie O’Dea said TDs were being asked to vote on billions of euro in extra funding without information on how long Covid-19 payments will continue for.

Mr O’Dea said while it is welcome the Covid-19 unemployment payments will be extended beyond June, people need certainty on the payment.

“We are still without an announcement on when this will be paid until. It seems to me that the Government were happy to take the plaudits to increase the social welfare payment to €350 per week but they want to shirk the responsibility regarding how long this will continue.”