Marie Sherlock (Labour) | Oireachtas source

We are opposing the section and specifically the provisions relating to the retrospective application of income tax to the pandemic unemployment payment, PUP, for the 20 and a half weeks between 13 March and 5 August. Let us be clear what is in question here. The Social Welfare (Covid-19) Act 2020 provides that the PUP is subject to tax from 5 August but it is only now, in the middle of December, that we will be retrospectively applying income tax to that vital payment between those dates that kept many thousands of households throughout the country afloat during the worst of the pandemic.This belated decision to retrospectively apply income tax to the payment is mean and unnecessary. It is a penny-pinching initiative. Its main impact will be to strike fear into those households that have been so badly hit this year and to cause anxiety. People in these households are dealing with reduced incomes, the stress of working from home and the great uncertainty that comes from not knowing whether they will have a job next year. I ask the Minister of State to consider taking section 3 out of the Bill. We have yet to hear any answers as to how much this measure will raise. My colleague, Deputy Nash, asked this question in the Dáil and we have not got an answer yet.

My second point is that it makes no sense for it to be good enough to retrospectively apply income tax to an ordinary worker's social welfare payment, which is supposed to be exempt from such tax because it is a supplementary welfare payment as per the 2005 Act, while it is not okay to retrospectively change the rules regarding corporation tax or many other taxes in our system, as has been articulated by the Minister for Finance. FLAC, the Free Legal Advice Centres, has been in contact with the Department on a number of occasions to express grave concern about the legality of the principle of retrospectively applying income tax and the impact this will have on working families. Let us be clear; this retrospectively applied tax could push someone who did not have to pay income tax this year because he or she fell below the threshold into paying tax or could push a worker from the standard income tax bracket into the higher tax bracket. All of us in this Chamber today have to ask whether it is good enough to further penalise those families and workers who have been so badly affected this year. I ask the Minister of State to withdraw this section. It does not stand up and it is not fair. We will oppose the section.