Paschal Donohoe (Dublin Central, Fine Gael) | Oireachtas source

I thank the Chairman. There are a number of amendments that are in order for dealing with this section. I am sure we will have the opportunity to debate a number of different elements that have been put forward.

I want to make clear from the very start the intention of the Government that these payments would be taxed and treated in the same way as we tax other equivalent social welfare payments. I point members of the committee to the Dáil answer I gave on 17 April on this matter. The sitting on 17 April was one of the early sittings of the Dáil after the pandemic unemployment payment had been introduced. It was one of the first opportunities for me to take questions in the Dáil on the matter. For the purpose of getting the debate on this section under way I want to read into the record of the committee some of the lines and statements I made at that point. I proposed to take a set of questions together because they related to tax treatment of the Covid-19 pandemic unemployment payment and the wage subsidy scheme. I stated that disbursements made under both the pandemic unemployment payment and the temporary wage subsidy scheme were in the nature of income supports and shared the characteristics of income. I also stated that on first principles, therefore, they were liable to income tax and that other income earners in receipt of comparable normal wages were taxable on those wages. I stated that in the interests of equity, the payments made under both schemes were, therefore, subject to income tax.

I also stated: "In the case of the PUP, the taxation position follows the general taxation rule for social welfare payments and [is therefore also] exempt from USC and PRSI. This will be the case [for] former PAYE worker[s] or [those who were] previously self-employed."

When the PUP was introduced, that it was taxable income was always made clear. The grounds for that claim rest on a number of points: it is a regular payment; it is not means tested; and it confers a monetary benefit on those who need and deserve it. Furthermore, we are treating this payment in the same way as comparable payments under our social welfare code, in particular jobseeker's payments. This is why that income is and was taxable and why this section is in the Bill.