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

I thank the Deputies for their questions. I will deal with each of the points in turn, beginning with the points made by Deputy Tóibín. As the pandemic unemployment payment was introduced at €350 in the first instance it offered a very high degree of income support to those workers who had lost their jobs through no fault of their own. The only reason they were losing their jobs was because of the arrival of a pandemic onto our shores. The setting of that payment at €350 offered a very high level of income support. In the cases of many workers, their income was broadly protected versus their after tax income. We are, of course, familiar with the fact that some workers may even have seen an increase in their income when compared with their post-tax income, which happened because we had to bring in an exceptional payment at a high level in the emergency circumstances that we were in.

It is going to take some time to determine the overall income effects of the PUP. That information will be available from the Central Statistics Office, CSO, but it is very unlikely, however, to be a story of dramatic income reduction, given the high level of the PUP at that point, at €350, for everybody.

Moving on to deal with the point regarding the issue of taxation in this regard, and what the claim could be, I do not have available what we expect to be any significant tax take as a result of this situation, but my officials will share that information with me during the morning, if it is available.It is worthwhile, however, to talk about this matter in the way that the House would. I refer to looking at the effect on an individual and what kinds of sums of money we are talking about in this context. I will use the example of someone being on the PUP for 12 months to illustrate the sums of money that would be involved for that person. In this case, however, that would be a significant fraction of the figures I am going to talk about, because we are dealing with the tax liability that was due over a specific period of time. If a citizen were on the PUP for a full year, that would mean that his or her taxable income during that period would be €18,200. The only tax that person would pay would be income tax, because he or she would not pay the universal social charge, USC, or employees' PRSI. The total tax due from that person on the PUP across a 12-month period, therefore, would be the income tax of €340. In addition, for the period in question, from March to August, the amount concerned is a fraction of that.

The effective tax rate, therefore, that would be due on the PUP is 2.88%, and that worker would have the default ability to pay off that €340 over a period of four years, which would mean that the tax he or she would be paying per week would be €1.26 in that four-year period. Deputy Doherty is of course correct because we are debating principles here, but while we are debating the principles it is also appropriate to frame those principles in respect of the total amount of tax that would be due in respect of that person from the application of the taxation code in the way which I have described. It is €500, if a person is on the PUP for a full year, and he or she has the ability to pay off that amount over a four-year period. Those are the figures we are talking about, therefore. In respect of the comments from Deputies Toíbín and Barry, if figures are shared with me during the morning regarding what amount of tax would be available to the country as a result, I will of course share that information with the committee.

To deal with Deputy Toíbín's main contention, in respect of creating a narrative of dramatic and savage income reduction, not that he is in his question but I refer to if one were to create such a narrative, it is not consistent with the reality of the introduction of the PUP of €350 being taxed in the way which I have described. Turning to the points made by Deputies Barry and Doherty, I have acknowledged, because it is the case, and Deputy Doherty asked me this question and has done so in the past as well, the heading under which this payment was made available through social welfare legislation. Just because the payment was made available under section 202 of that legislation, however, does not mean that it is an urgent needs payment. It is not an urgent needs payment. It is not means tested and it is not ad hoc. We are repeating, and have repeated, this payment since it was introduced. As such, it is very different, even in nature, to the other social welfare payments listed under section 126 of the tax Act on which we must base this as well.

Moving on to deal with the other claim being made regarding this action being retrospective, it is not retrospective.

It is being collected in the same way as taxation on any other social welfare payment would have been collected. In fact, it will be collected over a longer time period because of the emergency circumstances that we were in. It is not just a view of the Minister, either myself or Minister Humphreys. At that point we were making that statement cognisant of what the legislation is and cognisant of the need to ensure equity of tax treatment between the PUP and other jobseeker's payments, the other income supports, that were available at that point in time. It is not retrospective. Just because it was made under section 202 does not mean it was an urgent needs payment. While we are debating matters of principle here, and I am addressing the principle questions that are put to me, it is important also to be aware of the actual sums of money that are at debate here.