Thousands of people in Ireland who received the PUP social welfare payment from the government during Covid are now faced with tax bills reaching up €2,500 in some cases.
According to Revenue, almost 280,000 people have not yet been in touch with them to organise a payment plan for their tax due, and they'll have to act soon to avoid an automatic tax credit reduction. Revenue confirmed that the number of those left to contact them is close to 300,000 in relation to the PUP and the Temporary Wage Subsidy Scheme payments, and a total of €219 million is owed.
A Revenue spokesman said: “Revenue estimates that there are approximately 279,000 taxpayer units who were in receipt of PUP and/or TWSS payments, and who have not yet filed a return, who may be in an underpayment position.” Here's everything you need to know if you received the PUP or Temporary Wage Subsidy Scheme payments during the Covid-19 pandemic.
Read more: Emergency services rush to scene of two-car crash on M50
What is the Covid-19 Pandemic Unemployment Payment?
The COVID-19 Pandemic Unemployment Payment (PUP) was a social welfare payment for employees and self-employed people who lost all their employment due to the COVID-19 public health emergency. The COVID-19 Pandemic Unemployment Payment is taxable.
However, the amount of tax you are liable to pay depends on your overall income during the year. You will not pay tax, if your tax liability is less than your tax credits and allowances.
In 2021 and 2022, PUP is treated like other taxable social welfare payments. It is taxed in real-time. This means it is taxed as it is paid, and the tax due is collected by reducing your tax credits and rate band.
What is the Temporary COVID-19 Wage Subsidy Scheme?
The Temporary COVID-19 Wage Subsidy Scheme was announced on 24 March 2020. It replaced the Revenue Employer COVID-19 Refund Scheme.
It allowed employers to continue to pay their employees during Covid-19. It aimed to keep employees registered with their employers, so that they could get back to work quickly after the pandemic.
The Employment Wage Subsidy Scheme came to an end in May 2022 after two years. The EWSS was the biggest and most important of the wage schemes that were introduced at the height of the pandemic.
How do I pay back tax on the PUP and TWSS?
Anyone who was in receipt of the PUP or TWSS schemes during lockdowns was given the option to pay back their income tax bill over four years - but they had to file a tax return in order to clear the charge. If you are one of those people, you need to file a tax return to Revenue indicating what method you would like to pay off the debt.
You can clear the tax liability in one go or you can choose to have it deducted from your tax credits over a four-year period. It is now understood that Revenue is likely to automatically reduce the tax credits unless people make arrangements to pay the tax back.
For more information and advice visit revenue.ie
READ NEXT:
- Social welfare Ireland: First double payment announced in Budget 2023 expected next week
- The five 'vampire appliances' skyrocketing your energy bill by up to €655 and how to stop them
- Electricity expert shows TikTok fans €3.99 tumble dryer item that could reduce your energy bill
- Daylight Saving Time: When will the clocks go back?
- Budget calculator shows how income tax changes will affect you
Sign up to the Dublin Live Newsletter to get all the latest Dublin news straight to your inbox.
