Michael Noonan (Limerick City, Fine Gael) | Oireachtas source

I move amendment No. 13:

In page 10, between lines 21 and 22, to insert the following:"Exemption in respect of certain expenses of State Examinations Commission examiners

7.The Principal Act is amended by inserting the following section after section 195B:

"Exemption in respect of certain expenses of State Examinations Commission examiners

195C.(1) In this section—

'civil servant' has the meaning assigned to it by the Civil Service Regulation Act 1956;

'employee' has the same meaning as in section 983;

'examination purposes' means:

(a) the development of examination papers or other examination materials;

(b) the marking of such papers or other such materials; or

(c) the carrying out of invigilator duties at an examination;

'examination'’ means any examination standing specified for the time being in Schedule 2 to the Education Act 1998;

'examination paper' includes any paper, plan, map, drawing, diagram, pictorial or graphic work or other document and any photograph, film or recording (whether of sound or images or both)—

(a) in which questions are set for answer by candidates as part of an examination or which are related to such questions, or

(b) in which projects or practical exercises are set which candidates are required to complete as part of an examination or which are related to such projects or exercises;

'examiner' means, other than a person employed as an Examinations and Assessment Manager, a person who is an employee of the relevant employer for examination purposes;

'relevant employer' means the State Examinations Commission;

'travel' means travel by car, motorcycle, taxi, bus or rail.

(2) This section applies to payments made by the relevant employer to or on behalf of an examiner in respect of expenses of travel and subsistence incurred by the examiner, on and from 1 January 2016, for examination purposes.

(3) So much of any payment to which this section applies, as does not exceed the upper of any relevant rate or rates laid down from time to time by the Minister for Public Expenditure and Reform in relation to the payment of expenses of travel and subsistence of a civil servant, shall be exempt from income tax and shall not be reckoned in computing income for the purposes of the Income Tax Acts.".".

Following an audit of the 37 categories of contract examiner staff engaged by the State Examinations Commission, SEC, Revenue determined that elements of the travel and subsistence payments are taxable. My colleague, the Minister for Education and Skills, in conjunction with her Department and the SEC, have advised that they consider that there are only two viable options open to deal with this issue. We can either provide remediation by means of a specific provision in the Finance Bill or increase remuneration for affected examiner staff in order to offset the significant loss of income as a result of taxing travel and subsistence payments.

I am advised that the Department of Public Expenditure and Reform is strongly opposed to the possibility of increased remuneration and I tend to agree with its position. This leaves a difficult decision. If we do not wish to increase the public pay bill significantly, we need to consider how we can continue to pay expenses to these people at the same level as they have previously received them. We could simply deduct the tax, which the SEC should have been doing all along, but then, of course, the expenses received into their hands by these staff would decrease considerably. I am advised this could put the SEC in a position where it would be difficult to attract sufficient numbers of such staff in order for the State examinations in 2016 to be concluded successfully. On this basis I consider that, having regard to historical practice, it would seem appropriate to include a measure in the Finance Bill 2015 to exempt certain expenses of SEC examiner staff from taxation.

Bearing in mind the need to ensure this measure operates exactly as intended, and with a very narrow focus, there have been ongoing discussions involving the Office of the Attorney General, the Department of Finance, Revenue, the Department of Education and Skills and the SEC. For this reason, the measure was not fully ready for inclusion in the Finance Bill as initiated and, therefore, I am introducing it on Committee Stage. I commend the amendment to the committee.