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PUP tax is getting complicated? Revenue to acquire partner’s tax credit as well

DUBLIN: The PUP announced by the government during the COVID time is a relief, but there are now concerns that it will be complicated. Beneficiaries, who were shocked when the PUP was taxed, are now stunned by the government’s latest proposal.

About 500,000 people in Ireland are currently receiving pandemic unemployment payments at the Level 5 lockdown. But the latest news is that those who were receiving PUP in 2021 and want to return to work will have to pay back the tax this year. They will have four years to pay the tax.

But if you claim PUP 2021, and if you go back to work this year, it’s going to be a problem. Tax credits and tax bands will be amended when you resume work. The PUP is more of a problem if the tax is assessed jointly with the partner.

The working person’s own credits would be adjusted in order to collect the PUP tax. If the amount is insufficient, the partner’s tax credit will also go. PUP is liable to tax, but USC and PRSI are not liable for payment.

Recipients of a PUP payment of €350 per week for the entire year 2021 will lose up to €70 a week in tax credit when they return to work.

A person who receive a PUP for €350 per week will have to pay 20% tax. The tax rate is about €70 a week.

The annual tax credit per person / family will be reduced from €3300 to €63 in 52 weeks. The government then intends to recover the remaining pandemic payment, either together or several times, from each weekly payment of about €7 per week. In this way, PUP and tax are unfair to millions of PUP beneficiaries.

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