Thursday, 22 September 2022
Ceisteanna Eile - Other Questions
Flexible Work Practices
103. To ask the Minister for Finance if financial supports for working from home will be increased given the increase in the cost of utilities; and if he will make a statement on the matter. [46184/22]
The question of working from home has taken an unexpected, negative turn in recent months with the rise in energy prices, such as for gas and electricity. What is the Minister’s view on that as we enter the winter months?
I propose to take Questions Nos. 103, 108 and 111 together. The programme for Government includes a commitment to facilitate and support remote working. As part of the national remote working strategy, in 2021, the tax strategy group reviewed the tax arrangements for remote working in respect of both employees and employers. That paper is now available on my Department’s website.
Taking into account all these different factors, as announced in budget 2022, the tax arrangements for remote working were enhanced and formalised in line with Government policy to facilitate and support remote working. Accordingly, for the tax year 2022, an income tax deduction amounting to 30% of the cost of vouched expenses for electricity, heat and broadband in respect of those days spent working from home can be claimed by taxpayers. The amount of the relief will depend on the particular circumstances of the remote worker in terms of the level of costs incurred and his or her marginal tax rate. However, this measure provides some relief for those with additional expenses arising from working from home. At the same time, it ensures that the traditional burden of employer-related costs are not transferred from the employer to the State and by doing so, to the wider body of taxpayers.
As Deputies will be aware, as the current deduction relates to a proportion of the cost of the relevant expenses, the amount that may be claimed will, of course, increase as the value of those expenses increases too. As Deputy Carroll MacNeill referenced a moment ago, the environment regarding working from home has, of course, changed over the past number of months for reasons the House well knows. I look forward to hearing the views of Deputies regarding the operation of this policy in the time to come.
An interesting point will be interplay between the retention of the deduction and any other changes that Government introduces with regard to energy supports more broadly and how that works out for individuals. It is extraordinary how external events impact behaviour in a collective way, whether it is the change to remote working and how much that has been of benefit to people, particularly families with children of a young age who have been able to be closer to home, which is so helpful.
Given the increase in energy costs, however, I wonder whether that behaviour will now shift back to the office environment and whether there will be incentives for people to spend more time at work instead of being at home, or what that balance may be in respect of transport costs and the additional costs of leaving a child in childcare for longer rather than being at home to avail of the shared heat and electricity available in office space. We did not expect the collective move to working from home in advance of the programme for Government. As the Minister said, we had hoped to provide it in the programme to enable that more but we did not expect the effect in that way. I wonder what the effect of this will be over the winter period.
On Question No. 108, to expand on the points on working from home that have been made, the Department and Minister must take recognition of the benefit of working from home for people and to society. People had long commutes and then started working from home. We must accept as a State that working from home which, for want of better English, was a by-product of Covid-19, has such huge benefits. We want to make sure that when the State reflects on the paper on the Department's website, but also as we look at the policy and go into the budget next week, we strengthen what the State can do in support.
The Minister made the point that he did not want the cost of remote working for private industry coming back on to the State. However, if we take it in the round and consider the enormous benefit it has had to individuals, communities and people who have been able to relocate to rural areas and who continue to live in rural areas and work from home, there have been significant benefits to society. The Minister really needs to look at that in the round. It important that is taken into recognition when he is making decisions on the paper.
I thank the Minister for his response. A very fortunate several hundred thousand people got to stay home on what was a wet and horrible morning while more than 2 million people got into their cars or on trains, bicycles or otherwise to go to work, school or third-level institutions. As other Members said, this is about harnessing what Covid-19 brought us, which I believe to be of benefit, that is, the huge number of people who stayed at home and reduced their transport costs, reduced congestion and reduced their carbon footprint. I support any measure the Government can take to enhance that, particularly against the backdrop of rising energy costs.
Anecdotally, I was in the UK during the summer and spoke to a number of extended family members who all said the same thing. Their energy bills are predicted to double, triple and quadruple, and they will spend more time the office over the winter. Of course, that is understandable step. We in government have options, however. I will be interested to see what options are exercised on Tuesday.
I thank the Deputies for the points they made. It is probably a little too early to know what the equilibrium will look like in terms of working from home. Even if we did not have the energy price change that is occurring and we were living in - to use that phrase we used for a long time - a "new normal", I still think it would be early to see what the new patterns will be regarding where work will take place. The world of work is undergoing so much change at the moment, not just due to the effects of Covid-19 but due to the fact that so many employers are working so hard to keep the workers they have and to get new ones, combined with the digitisation of the workplace that is taking place.
I do not believe the State should always be the first port of call for dealing with some of these costs. If this is an arrangement that works for the company, employer and employee, then the employer and company have a role to play in looking at how some costs can be alleviated. I know many different employers have done that over time.
The point was made by Deputy Moynihan that many of the benefits, particularly outside of our cities, have been really positive; I can see that. That is why going ahead with the national broadband plan was clearly the right thing to do. As noted by Deputy Alan Farrell, I am aware of how some of this may change if people see some of the costs of working from home begin to change. We will, of course, continue to monitor this to ensure we have an appropriate policy in place in that regard. We made a change last year and I will continue to monitor how it is impacting on where work takes place.
The Minister is quite right that the State cannot be the first port of call. There is, however, a general supervisory role and level of communication with businesses, in particular, to try to effect a degree of co-ordination that works for their employees. I spoke with one city centre business owner who has a core day on Wednesday. Everybody comes into the office on a Wednesday for the purposes of physically seeing each other and developing relationships and so on. That business also provides for three days per week in the office over the winter and two days per week over the summer in anticipation of summer holidays and sunny weather, etc., and just a better lifestyle. That is the planning by that business to create three core days to facilitate its employees to come in and, as I said, avail of the shared heat and electricity. It is that sort of signal from Government that we will maintain the balance in potential deductions. As the Minister said, however, business has a strong role to look after its employees. It is an important retention mechanism. We must think about it strategically and in a co-ordinated way so that we can share and pool our energy resources and costs in a way that is of maximum benefit to everyone.
I take the point regarding the State but we also need to take recognition of the State employees who can work from home, provide the same service and do the same job equally well from home a number of days per week. The State needs to examine this and make sure it has have every incentive in place in order that people are not commuting from the likes of my area in Duhallow to other large urban centres, and that they can work from home and from the hubs that are being developed in some villages and towns. There must be an incentive and a clear pathway whereby the State is saying it believes this is the future for a hybrid mechanism of working and it encourages this.
I agree entirely with Deputy Moynihan, and I support the Minister's comment that the Government does not necessarily have to be the first to move. As we all know, employers are responsible for ensuring their staff who happen to be working from home have suitable seating, among other things, which is important. The employers, therefore, play a role. I fully appreciate what the Minister is referencing and it is important that this message goes out. That said, certain issues will impact on employers, as other speakers have touched on, and it is important that the Department and the Government retain flexibility to address those matters, in addition to the welcome paper and guidance that has been issued by the Department of Finance and other Departments in recent years.
When State or local authority employees are working at home, they are often uncontactable. Part of this process should include the provision of facilities at home for employees of the State, local authorities and the HSE, paid for by their employers, to correspond over the airwaves with public representatives and other people who are trying to get them. It is a big and serious issue and these employees should be supported to do that.
The Deputy has concluded the discussion in an appropriate way because there has to be a balance. Public services still need to be provided, contact needs to be made available to citizens and consumers and employers still have to be viable and provide for and meet the needs of their customers. There is clearly a balance in how all this can be done. All the Deputies have acknowledged the huge change that has happened, and this change is beneficial for all the reasons I have heard. We need to monitor the impact the latest set of changes have on this trend and decide then if any further policy response is needed. As Deputy Carroll MacNeill said, the LEEF, which includes the Government, unions and employers, has tried to provide some guidance for how this matter can be dealt with within the private sector. As Deputy Moynihan said, we need to get the balance right in our public services to meet the needs he has referred to, while also ensuring public services are still provided.