Mick Barry (Cork North Central, Solidarity)
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2. To ask the Minister for Employment Affairs and Social Protection if the continuation of the pandemic unemployment payment will be guaranteed until the end of the pandemic; and if she will make a statement on the matter. [40071/20]

Mick Barry (Cork North Central, Solidarity)
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I ask the Minister if the continuation of the pandemic unemployment payment will be guaranteed until the end of the pandemic.

Heather Humphreys (Cavan-Monaghan, Fine Gael)
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Payment of the pandemic unemployment payment, or PUP, as it is known, has proved to be an extremely effective tool in responding to the economic impact of Covid-19 and in cushioning hundreds of thousands of individuals and families from sudden income shocks. Expenditure on the scheme has amounted to over €4.3 billion since its introduction in March. The scheme will remain in place until the end of March 2021 and, just last week, I announced that I had secured Government approval to keep the scheme open for new applicants until this date, rather than it closing at the end of the year. This extension provides certainty to people, including those in the retail and hospitality sectors, that they will be able to re-apply for PUP early in the new year if that is required.

I take this opportunity to highlight two other recent positive changes to the payment. First, since the move to level 5 restrictions, the €350 rate of PUP has been reintroduced for individuals who had prior average weekly earnings of €400 or more. Approximately 158,150, or 45% of the total in receipt of the support, are now receiving this rate of payment. Second, in budget 2021, we provided with immediate effect that self-employed PUP recipients can earn up to €480 over a rolling four-week period and retain entitlement to PUP. The €480 limit is based on gross income, before tax and PRSI, minus expenses.

The Government will keep the position regarding PUP under review and any future decisions will be informed by the trajectory of the pandemic and the evolving public health situation.

Mick Barry (Cork North Central, Solidarity)
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I want to ask the Minister about her plans to tax the pandemic unemployment payment. The recipients of the payment are victims of the Covid crisis; they are workers who lost their jobs in the Covid crisis. Many of these workers did not just lose their job, but their incomes fell off a cliff. There are people who would have had incomes of €600, €700 and €800 a week that were reduced to €350. That was the money which paid the rent and put the food on the table. Now, the Minister and the Government are planning to tax it. This is another real blow to those workers and their families. We are talking about hundreds of thousands of people. I ask the Minister to give the House a justification for taxing these workers, the victims of the crisis, and dealing them another blow. Can that be justified?

Heather Humphreys (Cavan-Monaghan, Fine Gael)
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The issue of tax is a matter for the Department of Finance. We all know that if we earn over a certain amount of money, we are all liable to pay tax. As I understand it, that is the rule across the board.

It is important to say we have paid out a considerable amount of money to support people through the pandemic unemployment payment. This week, we issued €130 million in arrears to 286,000 people. The Deputy will be aware that when the payment was brought in last March, some payments were not made because there was missing information and so on. We worked with those people and we got them into payments and it just took some time to get the arrears sorted. Those arrears have been paid this week. Next week, we are going to pay out a record €389 million on the Christmas bonus and over 311,000 people on the PUP will receive that bonus. Normally, people would have to be 15 months on a social welfare payment, such as a jobseeker’s payment, to get the Christmas payments. However, in acknowledgement of the very difficult year people have had, we have agreed that if they are on the pandemic unemployment payment or a jobseeker’s payment for more than four months in total from last March until October, or perhaps November, but if they are on it for four months since then-----

Catherine Connolly (Galway West, Independent)
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Excuse me. The Minister is over time. I do not wish to interrupt but I am trying to ensure that every Deputy gets in.

Mick Barry (Cork North Central, Solidarity)
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Tax is a matter for the Department of Finance but the Minister sits at the Cabinet table, where a proposal came to tax a payment for which the Minister is responsible. She is the Minister for Social Protection. How are these workers being protected with the plans to tax them in the new year?

In fact, it is a retrospective tax because when it was introduced, on 13 March, it came in as an urgent needs payment. Urgent needs payments are explicitly exempt from tax under section 126 of the Taxes Consolidation Act. It is was only on 5 August that the PUP was put on a statutory basis. Yet, for the period between 13 March and 5 August, the PUP is to be taxed. This is retrospective taxation.

It is an extraordinary decision. As the Minister charged with protecting people in this vulnerable position, how did she allow that to go through at Cabinet level when the proposal came from the Department of Finance?

Heather Humphreys (Cavan-Monaghan, Fine Gael)
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It has always been the case that if people earn over a certain income in any given tax year, they are liable for tax. That has always been the case and it is the case for the pandemic unemployment payment in the same way as for any other payment people receive.

We have supported people. We have processed 1.5 million claims since last March and we have issued 13 million payments to 800,000 people. That is the equivalent of processing seven years’ worth of jobseeker applications in eight months. The total spend on PUP to date is €4.3 billion. I think the Deputy will accept the Government has not been found wanting in supporting people through what has been an extremely difficult time for them. To go back to the Deputy’s initial question, I will be reviewing the pandemic unemployment payment in January.