Marie Sherlock (Labour) | Oireachtas source

I thank the Minister of State for his detailed and considered response. I would like to make three points. It is well within the power of the Government to allow on a pro ratabasis the application of the PAYE allowance and personal tax credit during this tax year. It is within the power of the Government to allow those tax credits to apply against whatever earned income is generated in 2020. My understanding of the Minister of State's response is that it is a dressing up the section as an act of charity or mercy to those who have been on the PUP and are earning again in 2020 and that if the section is withdrawn the PUP will be 100% taxable. It is within the wherewithal of Government to apply an amendment here that allows the application of the tax credits.

As I understand it, for 20.5 weeks this payment was considered a supplementary welfare payment. Under the tax code, that payment is not taxable. On 5 August the status of that payment was changed to make it taxable and now, in December, the Government is trying to change the status of the payment retrospectively from 13 March to 5 August. I do not think that is necessary. The Minister of State has given no figures in terms of how much is likely to be generated. If he thinks it will sufficient to blow a hole in the public finances, then let us have that conversation. Thus far, there is no evidence as to what it will generate other than fear and anxiety among workers.

It is good that there is a four-year period for repayment. Let us call a spade a spade. This means five years of workers living with this hanging over them. Workers will have to repay tax because they were misfortunate enough to have lost their jobs because of the pandemic. I think we can do better.

The Minister of State made the point that to put the tax treatment of the PUP in place in March would have taken weeks. To me, that is a nonsense. As a new Senator I sat in this House in the months of July and August when we passed legislation dealing with billions of euro in one day. We have taken all Stages of a Bill in one day. It was within the power of the Government to make this payment taxable in March but it chose not to do so. It did so in August and we cannot go back and rewrite that, but the Government can apply the tax credits for earned income for this year and ensure that the 20.5 weeks of the PUP between 13 March and 5 August are not taxable. I reiterate the call for the Minister of State to withdraw or amend section 3.