Marie Sherlock (Labour) | Oireachtas source

On Committee Stage, I made very clear on behalf of my colleagues in the Labour Party our deep unease - this is shared by other colleagues on this side of the Chamber - regarding what we believe is the retrospective application of income tax to the pandemic unemployment payment, PUP, between 13 March and 5 August. I listened very carefully to the comments the Minister of State made, especially with regard to the income tax classification of PUP income received in the context of Case IV of Schedule D and also the need to reclassify this as Schedule E in order to be able to offset personal and PAYE tax credits. We accepted that point and asked the Government to table a recommendation in this regard. However, as this was not forthcoming, we have brought forward a recommendation in conjunction with the Free Legal Advice Centres. The latter has written on a number of occasions to the Minister for Finance, Deputy Donohoe, expressing its alarm about section 3 of the Finance Bill.

Our recommendation is that for the period before which PUP had statutory basis as a payment, namely, 13 March and 5 August, it would not be considered reckonable income for income tax purposes. We accept that the payment has been subject to income tax since 5 August. However, we believe that the principle of retrospection in the context of income tax is wrong. Last week, I also mentioned that there is a great reluctance and resistance on the part of the Government to enter into a conversation about the retrospective application of tax changes to any other part of our tax code. As a result, we are not convinced why it is acceptable in the context of income tax.

I ask the Minister of State to accept our recommendation, which we believe is very reasonable and which solely deals with the period between 13 March and 5 August when the payment was classed as an emergency payment. We hope that he will accept the recommendation.