PUP was brought in last year to support people who had lost their jobs.
Income tax rules for people on the Pandemic Unemployment Payment are changing this year.
Those receiving the state support, who manage to secure a job, will see a reduced take home wage.
Workers on the PUP last year were given the option to pay their income tax bill over four years, but this will not be in place this year.
The Irish Independent reports couples who are jointly assessed will also be affected.
Solidarity-People Before Profit TD Bríd Smith says the State shouldn't be punishing people who lost their jobs in a pandemic:
"We don't want to drive people into poverty, we don't want to frighten them off coming with us when we're trying to deal with a pandemic, we need to keep people on board, and this is very punitive indeed."