Heather Humphreys (Cavan-Monaghan, Fine Gael) | Oireachtas source

I thank the Deputy for raising this issue. All legislation enjoys the assumption of constitutionality. The Minister for Finance determines taxation policy. The legislation has gone through both Houses of the Oireachtas. The Revenue Commissioners and the Department of Finance are of the view that it is constitutional. The Minister for Finance and the Revenue Commissioners are clear on this issue.

The position is that the PUP is taxable. It is important to remember that payments from the Department of Social Protection are, in general, taxable sources of income. For example, jobseeker's benefit payments are taxable. The PUP follows this general taxation rule for social welfare payments.

The data show that in the case of people who are on PUP only, more of them are due a refund than are due to pay extra tax. In the case of lower-income households or those whose income solely comprises social welfare payments, a liability to tax typically does not arise because the value of social welfare payments received in a tax year is usually not liable for tax. Revenue will be adopting a fair and flexible approach to collecting tax due on payments made under the PUP scheme. Revenue has also given assurances that if any income tax and USC liability still arises following the allocation of the unused tax credits, it will work with PUP recipients to collect the outstanding liabilities.

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