Róisín Shortall (Dublin North West, Labour)
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Question 160: To ask the Minister for Finance the supports available through the taxation system to help a person wishing to return to full time education shortly after having become unemployed; and if he will make a statement on the matter. [33820/06]

Brian Cowen (Laois-Offaly, Fianna Fail)
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A number of supports in the taxation system may assist unemployed individuals returning to full-time education. Where, for example, an individual has paid tax during a tax year, he/she may be may qualify for tax relief on tuition fees and/or be entitled to a refund of some (or all) of that tax where he/she returns to full-time education.

In general, when an individual becomes unemployed, he/she may not, whilst working, have utilised the full amount of his/her tax credits for the tax year during which he/she become unemployed. In such cases, the granting of the unused portion of tax credits may give rise to a refund of tax already paid for that tax year. Whether or not a refund of tax is due is dependant on the facts and circumstances of each individual case. For example, if the individual takes up part-time employment whilst a student, his/her tax credits will be offset against the income for that part-time employment and this will affect the extent of any tax refund in respect of the tax paid whilst in full time employment. An individual seeking a refund should contact his/her local Revenue office which will determine whether or not a refund of tax due to unemployment may be due at this time. Alternatively, the individual can wait until the end of the tax year and claim a review of his/her tax liability for 2006 and this will determine the extent of any tax refund that may be due.

Subject to certain conditions, income tax relief is available in respect of tuition fees paid by an individual to a college approved by the Minister for Education and Science in respect of full time or part-time undergraduate courses, postgraduate courses and information technology and foreign language courses. Tax relief is available up to a maximum limit of €5,000 per annum at the standard rate of tax (currently 20%). To qualify for relief, an undergraduate course must be of at least two years' duration. In the case of a postgraduate course, the course must last at least one but not more than four academic years and must lead to a postgraduate award based on either a thesis or an examination. Tax relief is also available in respect of fees paid for training courses in the areas of information technology and foreign languages. A foreign language is defined as a language other than an official language of the State (courses in either the English or Irish language do not qualify). The course must be less than two years in duration and must result in the individual being awarded a certificate of competence on completion. Relief will only be granted in respect of one course in any year of assessment. Tuition fees paid by an individual on his or her own behalf or on behalf of a spouse, child or person for whom the individual is the legal guardian qualify for relief. The amount of tax repayment due in respect of any such claim is, of course, limited by the amount of the individual's actual tax liability during the relevant tax year. More complete details of the scheme, together with the explanatory leaflet and application form are available on the Revenue website, www.revenue.ie.

The Deputy may also be aware that statutory redundancy payments are tax free. Ex gratia redundancy payments in excess of the statutory redundancy amount may also be free of income tax to the extent that they are covered by certain other tax exemptions and reliefs. In addition, the basic exemption may be increased by an additional amount of up to €10,000 in a case where an individual is not a member of an occupational pension scheme. If an employee is liable to tax on his/her ex gratia redundancy payment, "top-slicing relief" may be due, whereby the taxable amount is not charged at the marginal rate, but instead at an average tax rate calculated by reference to the previous three years.