Covid-19 unemployment payment could result in tax bill for recipients
The Government is reminding anyone receiving the Pandemic Unemployment Payment, instituted as an emergency response to layoffs made in the wake of the Covid-19 crisis, that they could face a tax bill at the end of the year.
5,000 fewer people will receive the weekly €350 payment this week, with another 33,000 claiming it for the last time, as businesses return to trading as part of the State's plan for a phased emergence from.
Over 580,000 people will collect the payment tomorrow, at a total cost to the State of €200m. Elizabeth Canavan from the Department of the Taoiseach has stated that the payment is a taxable source of income:
"When a review takes place for a PAYE taxpayer, it may be the case that they have unused tax credits, to cover any taxes that may arise.
"Where a PAYE taxpayer owes tax, it is normal Revenue practice to collect any tax owing, in manageable amounts, by reducing tax credits for a future year or years, in order to minimise any hardship."
Last week, the payment was speculated to remain in place until the lifting of restrictions in August, with the rate 'tapering-down' over several months afterward.
More than 200,000 workers, including students and part-time employees will see their payments reduced, with recipients moved to the €203 weekly jobseekers allowance over a period of time, yet to be agreed, if they are not in a position to return to work.
A range of options is under consideration by the Government as to how to handle the payment beyond June 8, when it was meant to cease.
