Anybody receiving the PUP (Pandemic Unemployment Payment) will now be forced to pay ALL the income tax due on the payments this year if they go back to work in 2021.
Thousands of people across Donegal and the rest of the country will be hit by the bill.
Last year, people in receipt of the payment got the option to pay back their income tax bill over four years, from 2021 to 2024.
But anybody receiving the payment who gets their job back later this year will be required to pay their bill this year.
These people will effectively lose tax credits, reducing the portion of their income that is tax-free, according to Independent.ie.
Couples that are jointly assessed by Revenue, with one of the pair on the PUP payment, are also set to take a hit.
Almost 500,000 people will receive the welfare payment this week, all of whom could be affected by the shake up if they return to work.
Revenue confirmed that the Pandemic Unemployment Payment will be taxable in real time in 2021.
It said: “The process of taxing PUP payments in place for 2021 is in line with our standard and well-established processes and more importantly ensures any tax amount due on such payments are collected evenly and in manageable amounts over the course of the year to ensure there is no big tax bill at the end of the year.”