Leo Varadkar (Dublin West, Fine Gael) | Oireachtas source

The position is that the PUP, like most social welfare payments, is subject to income tax and the universal social charge, USC, in the same way, for example, as the State pension. Child benefit is exempt, but most social welfare payments are subject to tax if one earns enough money to pay income tax and the USC. Someone who, for example, earned €36,000 last year from work pays the same tax as someone who earned €36,000 comprising €10,000 in PUP and €26,000 from work. That is the way it works and it is only fair. We are allowing people to discharge that liability and pay that tax over a period of four years.

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