Seán Fleming (Laois-Offaly, Fianna Fail) | Oireachtas source

-----aside from the numbers voting to support a Minister's point of view. No Minister can unilaterally change anything when it comes to these taxation matters, and I say "Thank God" for that and that we have a parliament. I would not like to have the route that was suggested. It might not have been intentionally suggested, but that is what was said today.

The other point I wish to make is important. There is a Schedule to the social welfare legislation of social welfare payments that are exempt from income tax. The same Schedule is included in the Finance Act 2018. If something is on that Schedule, it is exempt from tax. Every other social welfare payment is taxable. The only ones that are not taxable are those on the list of payments exempt from tax. The PUP did not exist when that Schedule was put in the Finance Act two years ago, so by definition, PUP is not on the list of payments that are exempt from tax. It could not be. Now the Senators are going back in time and asking us to have the PUP listed in 2018 as a payment of income that is exempt. That is the logic of what Senator Gavan said. To make the case, he quoted the 2018 Act that has a list of the exempted payments and he is saying it is a supplementary welfare allowance or an urgent needs payment. It is not a supplementary welfare allowance payment, which is in that Schedule. This is not a supplementary welfare allowance and, by definition, it is not in the Schedules to the Social Welfare Acts or the Finance Acts. The PUP was never listed as a payment that is exempt from income tax so, by definition, it is taxable.

I am worried about what I have heard today. Where a person lost his or her job this year, unconnected to Covid and as happened this year and happens every year, and the person goes on jobseeker's benefit, I am shocked that there is a move here today to say that those people who lost their jobs through no fault of theirs and are on jobseeker's benefit should be taxable - Members are not arguing otherwise, and it is taxable - but the person next door who lost his or her job because of Covid should get his or her payment tax free. I am shocked to hear Members picking out people who are getting a payment for loss of income this year and saying some should be taxed, such as the people on jobseeker's benefit, while those on the other payment because of Covid should not be taxed on the same amount, and sometimes it can even be a higher weekly payment. I am surprised to hear that case being made here. It is the logic of what has been said.

I have made it very clear.The Government cannot do it. It came in and was taxable at the beginning. We passed the legislation on 5 August and that was the formality of it. The purpose of this section is to give retrospective benefit to allow people who have got the PUP to claim the PAYE credit allowance and the tax credit allowance. Section 3 is a retrospective measure which benefits people who receive the PUP. It is not charity. It is their entitlement, having been at work, lost their jobs due to Covid and gone on the PUP. As the payment is not from their employer, it does not come under the normal PAYE tax credit rules. We recognise that and for the avoidance of all doubt we are amending it to say the PAYE credits and tax credits a person would get if they were in employment can be used while they are on the PUP. We are making a retrospective move to benefit people who went on the PUP. Without this section, we would be penalising those people to no end.

The effect of being asked to withdraw or change this is that, although the Senator is setting out to say it should not be taxable, her recommendation, if passed, would make it 100% taxable without the benefit of being able to have the PAYE allowance or the tax credit offset against it. I know that was not her intention as nobody in Dáil Éireann or Seanad Éireann would suggest that. We are removing all doubt, just in case somebody made that case without this section in the legislation. It could have been 100% taxable so we are doing this to remove doubt on this matter. I hope I am making myself clear. That is the position. If this recommendation were accepted, everybody would get a massive bill for tax on PUP unless we allow these allowances to be offset against it.