Large parts of economy back on PUP as building sites shut again

More than 398,200 people required pandemic unemployment payment this week, including seven out of ten people in accommodation and food service and one in five building workers
Large parts of economy back on PUP as building sites shut again

As more building sites close down, there are 32,150 construction industry claimants on the pandemic unemployment payment. Picture: Larry Cummins

A surge in the numbers drawing down pandemic unemployment payments means seven out of ten people in accommodation and food service and one in five building workers are out of work at this early stage of the third lockdown.

There were more than 398,200 people in total requiring the PUP this week, up by almost 62,610 from last week, as the shakeout of jobs across the shuttered parts of the economy, including building sites that started to close late last week, start to show up in the figures. 

The Department of Social Protection figures show the PUP claimants include almost 106,390 people who work in the heavily restricted accommodation and food services industry, 65,300 people who work in wholesale and retail, and 34,460 people who work in administration and support services. 

So far, as more sites close down, there are 32,150 construction industry claimants.   

The figures mean that seven out of every 10 people who work in accommodation and food service and approximately one in five of all wholesale and retail workers now require the PUP at this stage of the lockdown, according to Irish Examiner calculations.

In construction, where sites started to close down last week, the number of claimants this week represents about a quarter of all people employed in the industry. 

Senior economist Jim Power said he had no doubt that the overall PUP numbers will rise again in the coming weeks, as the construction industry, in particular, continues to shake out workers from those sites that must close during the current restrictions.

However, Mr Power said the PUP numbers are unlikely to reach the elevated levels of last May, as businesses such as restaurants and non-essential shops have developed some parts of their online businesses since the first lockdown.   

Revenue figures last week showed that, in December, and before the full level 5 restrictions were imposed, the Government was supporting the jobs of a further 321,800 people across 32,300 companies through the employment wage subsidy scheme. 

Last spring, the total number of people requiring some sort of Government support, including the PUP, the former wage subsidy scheme, or a regular unemployment payment reached almost 1.2m, equivalent to around 60% of all the private sector employment in the State. 

Many thousands of workers who were on the PUP or the wage support scheme last year will have to pay back some in tax, experts have warned. 

Marian Ryan, consumer tax manager at Taxback.com, said an average PUP claimant may face a Revenue demand for €150 because PUP payments and on the former wage subsidy schemes are liable for tax. 

For recipients of the temporary wage subsidy scheme, the average payment could be €1,300, while for some higher-paid workers, the tax bill could be as much as €2,800, Ms Ryan said. 

However, she said that Revenue would allow the payments to be paid by reducing tax credits over four years. 

Paul Joyce, senior policy analyst at the Free Legal Advice Centres, said it maintains that the PUP should not be liable for tax in the first place.

More in this section

Lunchtime
News Wrap

A lunchtime summary of content highlights on the Irish Examiner website. Delivered at 1pm each day.

Sign up
Revoiced
Newsletter

Our Covid-free newsletter brings together some of the best bits from irishexaminer.com, as chosen by our editor, direct to your inbox every Monday.

Sign up