Tax implications of Pandemic Unemployment Payment (PUP)

dcr22B

Hi all,

I'm self employed and coming to the end of my period of benefitting from the Pandemic Unemployment Payment.

In terms of the tax implications, I have been accruing for Income Tax, PRSI and USC on the benefits I have received. I have noticed that there is no Employee PRSI to be paid on the Covid-19 temporary wage subsidy scheme, does this scenario also apply to the Pandemic Unemployment Payment? I have Googled it to bits and I'm no clearer on it.....

Calahonda52

Is the PUP not paid directly to you as a SW payment, giving you credit for stamps, same as illness benefit, so no EE PRSI payable as its not an employment related payment, its dole on steroids!

Stratvs

It is a Social Welfare payment. PRSI is not applicable.

lughildanach

There has been no indication that it will be chargeable for PRSI purposes.

But the full PRSI implications are not yet clear. There have been indications that those on the PUP will be treated as if in employment, which would suggest a paid PRSI contribution will be allocated (question there would be whether the employee would have to pay at some stage).

However, other indications have been that a credited contribution will be allocated. I don't think they have fully figured this out yet.

Certainly the credit would be much simpler to administer, but it could have negative consequences for people over the next few years who were relying on having a paid contribution.

For the self-employed, its different. Self employed people aren't usually awarded credits. If their chargeable income remains above the 5k threshold, there will be no adverse impact as a full Class S stamp is payable. For those whose income drops below the threshold, they will have to consider whether paying a voluntary contribution may be appropriate.