SF claims Government using ‘dubious legal grounds’ to retrospectively tax PUP benefit

Cut TD pay by 25% amid Level 4 and 5 restrictions – Aontú Bill

The Government has been accused of using “dubious legal grounds” to retrospectively tax those receiving the Pandemic Unemployment Payment (PUP) even though it is exempt by law as an “urgent needs” benefit.

Sinn Féin finance spokesman Pearse Doherty claimed it was an unprecedented move by the Government, which had failed to justify the decision in "rewinding the clock" to make the payment taxable.

The Donegal TD was speaking in the Dáil on Wednesday during the opening debate on the Finance Bill, which gives legal effect to the measures announced in Budget 2021.

Aontú TD Peadar Tóibín introduced a Bill to cut TDs’ salaries by 25 per cent during Level 4 and Level 5 restrictions and when premises such as pubs, cafes and restaurants are closed due to Covid-19 restrictions.


Mr Tóibín, who described the Finance Bill as the “ultimate Ross O’Carroll Kelly budget”, said the words “we’re all in this together have been thrown around like confetti”.

‘Urgent needs’ payment

During the debate, Mr Doherty said for the first five months the PUP benefit was not subject to tax because it is an “urgent needs” payments.

He said the Finance Bill “seeks to retrospectively tax a payment which was exempt from tax by law”. He described it as “an unprecedented move by the Government” which had failed to justify it.

“It is hard to understand why the Minister is expending energy in order to retrospectively tax those who lost their job as a result of this pandemic on dubious legal ground”.

The move set a precedent, because under provisions of the 2018 Finance Act the payment is exempt from tax. Now the Government is saying “we’re going back in time, we’re rewinding the clocks and we’re actually going to make this taxable”.

Opening the debate, Minister for Finance Paschal Donohoe said 70,000 businesses are availing of €2.1 billion in tax debt warehousing, which allows them to defer their tax payments for a year with no interest applying.

Some 40,800 employers have registered for the employment wage subsidy scheme (EWSS), while 330,000 people are currently availing of the PUP.

Meanwhile, 2,200 firms had registered for the Covid Restrictions Support Scheme (CRSS), which provides up to €5,000 to businesses closed or restricted because of the Covid-19 pandemic and which runs to the end of March next year.

Mr Donohoe said that “the health of the country and the health of the economy are interdependent, and the better our public health, the stronger our economic health”.

Sinn Féin public expenditure spokeswoman Mairéad Farrell questioned the inclusion of “subsidies for Nato military forces” for exemptions they will receive from 2022 from excise for services and goods.

“There seems to be a will that the taxpayers of this country, a neutral country, provide tax subsidies to foreign military forces from an organisation that our country isn’t even a member of”, she said, asking what cost benefit analysis had been done for the State.

Unprecedented opportunities

Labour finance spokesman Ged Nash said there were unprecedented opportunities in the budget, but that there was little sign of a new direction, a "new social contract, the emergence of a different, more egalitarian post-pandemic society and economic model". He said it was "very much a case of business as usual".

The Bill, he added, would increase wealth inequality and “widen the opportunity gap between the have littles, have somes and have lots”.

People Before Profit TD Richard Boyd Barrett said he played a game every year with the Finance Bill to "find the tax relief that's going to benefit the rich and maybe find the sneaky tax that's going to punish the poor".

He said there were an estimated €20 billion to €30 billion in tax reliefs for some of the wealthiest multinationals which were making €180 billion gross profit, but they only pay tax on €90 billion because of the “tax loopholes they avail of”.

Marie O'Halloran

Marie O'Halloran

Marie O'Halloran is Parliamentary Correspondent of The Irish Times