The recent changes to the taxation structures that apply the Pandemic Unemployment Payment (PUP) have caused some upset because – unlike last year – PUP is taxable in real-time during 2021.
However, there are actually another 24 other social welfare payments that are also taxable – a fact of which many of us are unaware.
Here's all you need to know about PUP changes;
The issue with the PUP
Essentially, the new changes mean that an individual is taxed when they're paid. Therefore, PUP payments earned in 2021 are treated like other Department of Social Protection (DSP) taxable payments.
For those people who are returning to work, Revenue has said that when they return, they will have to pay income tax on the PUP money this year.
This is different to last year, when people were given the option of paying the tax back over four years.
However, claimants of the PUP will now lose tax credits if they return to work this year — reducing the portion of their income that is tax-free.
This change by Revenue means that people receiving the payment will have to repay the income tax due for this year if they return to work in 2021.
As stated by Citizens Information, PUP is liable to income tax and USC at the end of the year.
The new changes will impact people in different ways
While the tax changes apply across the board, the amount of tax PUP recipients are liable to pay depends on their overall income during the year. You will not pay tax if your tax liability is less than your tax credits and allowances.
The Minister for Finance has confirmed that those on the lower rate of PUP will not see a significant change.
Revenue.ie, meanwhile, states that: "Payments from the Department of Social Protection are taxable sources of income unless they are specifically exempt from tax. PUP is a taxable payment.
"It is subject to Income-tax (IT) but not Universal Social Charge (USC) or Pay Related Social Insurance (PRSI)."
Here are the 24 other social welfare payments that are actually taxable.
The following information can be found on Citizens Information.
