People on the Pandemic Unemployment Payment who go back to work this year face a higher income tax bill.
This is because the tax rules for the payment are different in 2021 compared to 2020.
In 2020, people on the PUP who returned to work had the option of spreading the tax bill from the payment over several years.
This has now changed.
Norah Collender from Chartered Accountants Ireland, says now the tax will instead be due at the end of the year in which someone returns to their job.
Ms Collender said: “The taxpayer is going to be paying back the tax on the Pandemic Unemployment Payment when they go back to work. That will take the form of a reduction in their tax credits and rate bands.”
But Marian Ryan, the consumer tax manager with Taxback.com, says the tax bill will be relatively small.
“For every week they're on the PUP, their tax benefit will be reduced by €7, that's for a standard tax payer. For a higher tax payer that will be doubled so it will be €14 per week."
