The Government made confusing and contradictory statements on the tax of the pandemic unemployment payment (PUP), the Free Legal Advice Centre (FLAC) has said.
The centre has criticised what it describes as stress caused by the tax bills sent to PUP claimants.
In May, the Government announced there could be tax liability from claiming the benefit. Revenue intends to collect the outstanding money over a four-year period in the form of reduced tax credits, without imposing interest.
However, FLAC legal officer Christopher Bowes said communication over the taxation could have been clearer.
“The concerns arise out of the fact that some of these people may not have known that the payment was going to be subject to income tax when they first made the claim for the PUP payment,” he said.
“The issue arises from the fact that those people have now, as of last Friday, begun to receive... income tax bills in relation to their claims for the PUP.”
Mr Bowes said people have had to deal with “confusing” contradictions and different explanations on how the PUP would be taxed from the Government.
“Legislation that was introduced in August last year in relation to the payment categorised it as an urgent needs payment, which is a form of social welfare payment, which is specifically exempt from income tax,” he said.
“The Minister said yesterday that it was clear from the start that the payment would be taxed in the same manner as jobs seeker’s allowance, and again, this was a very confusing comment in circumstances where job seeker’s allowance is in fact also exempt from income tax.”