We use cookies to collect and analyse information on site performance and usage to improve and customise your experience, where applicable. View our Cookies Policy. Click Accept and continue to use our website or Manage to review and update your preferences.

PUP tax has no basis in law, claims FLAC
Pic: RollingNews.ie

20 Jan 2021 / COVID-19 Print

PUP taxation has no basis in law, according to FLAC

Retrospective taxation of the PUP payment has been criticized by Eilis Barry, chief executive of the Free Legal Advice Centres (FLAC) for a series of “contradictory and confusing explanations” from Government which have no basis in law.

The Minister for Social Protection Heather Humphreys said on radio that “we have always been clear that this payment would be treated as income by Revenue, similar to Jobseeker’s Allowance” and that the retrospective nature of the legislation pursuant to which the PUP has been taxed “is a matter for Revenue”.

Eilis Barry (small picture) has said in response that Jobseekers Allowance is not subject to tax, as it is a means-tested payment.

Secondly, if it was clear from the outset that the PUP would be subject to tax, as the Ministers have claimed, there would have been no need for enactment of section 3 of the 2020 Act,” she added.


FLAC legal officer, Christopher Bowes BL, commented: “The Minister stated that it was clear from the outset that the PUP would be treated as income by Revenue. The reality is that most statutory social welfare payments are categorised as income by Revenue but payments such as Jobseeker’s Allowance and Supplementary Welfare Allowance are specifically exempt from being taxed regardless of this categorisation. 

“Legislation underpinning the PUP was only introduced in August 2020 and at that time deemed it for legal purposes to be an Urgent Needs Payment, a form of Supplementary Welfare Allowance which is also explicitly exempt from income tax.

“It is also wrong of the Minister for Social Protection to claim that the retrospective taxation of the PUP is a matter for Revenue. The taxation of the payment was brought about by legislation and Revenue has no discretion in that regard as it must implement the legislation as passed.


“FLAC’s concerns in relation to this issue were outlined to Government well in advance of that legislation’s enactment.’ 

FLAC told members of the Oireachtas in November 2020 (in advance of the enactment of the Finance Act 2020) that PUP claimants (who were entitled to rely on the official information published in relation to the payment) could not have been aware that the payment would be subject to taxation.

FLAC has repeatedly outlined its concerns as to the fairness and constitutionality of the retrospective nature of the legislation.

FLAC is also concerned that the retrospective taxation may not accord with the constitutional protection of citizens property rights.

Eilis Barry stated: “The Minister of State at the Department of Finance, Sean Fleming TD, has previously incorrectly claimed that section 3 of the 2020 Act is not retrospective in nature and that the legislation in place at the time of the PUP’s introduction meant that it was always going to be subject to income tax. 


“Further, in debating a separate provision of the Finance Act, the Minister for Finance endorsed the principle that 'changes to tax law are generally made on a prospective basis such that they apply only from the date on which they have legal effect’ but has refused to apply this principle to the taxation of the PUP.”

Eilis Barry said that she wrote last year to the Minister for Finance to set out FLAC’s concerns and was redirected by that office to the Minister for Social Protection.

Gazette Desk
Gazette.ie is the daily legal news site of the Law Society of Ireland