Timmy Dooley (Clare, Fianna Fail)
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190. To ask the Minister for Finance his views on changing the tax saver rebate scheme to be a pay and claim process in order to broaden the number of users of the scheme; if he will provide details on the number of users of the scheme in each transport system in which it currently operates in tabular form; and if he will make a statement on the matter. [45319/14]

Michael Noonan (Limerick City, Fine Gael)
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I understand the Deputy to be referring to the Travel Pass/Taxsaver commuter ticket scheme.  The scheme operates on the basis that an employer pays for the ticket on behalf of an employee, typically at the start of the year, and the payment is then deducted from the employee's emoluments over the course of the year.  The incentive operates on the basis that, although such a payment out of an employee's income should be made out of after-tax income, section 118B of the Taxes Consolidation Act 1997 provides that the remuneration foregone shall be exempt from tax.  This has the effect of reducing the cost of the ticket to the employee by the amount of tax that would have been paid on the equivalent amount of income at the employee's marginal rate (the highest rate of tax at which the employee is paying tax).  In this way the employee, over the course of a year, only suffers the net cost of the Travel Pass, deducted on a weekly, fortnightly or monthly basis, with the total initial cost met by his or her employer. 

Where an employer provides a ticket without charge to an employee, section 118(5A) of the Taxes Consolidation Act 1997 provides that there is no benefit-in-kind charge on the employee in relation to cost of the Pass.

I take it that the Deputy's proposal relates to employees whose employers may not be in a position to, or willing to, operate the existing scheme. Under this proposal, therefore, the employee would meet the cost of the ticket at the outset and submit a claim to Revenue in respect of it by which he or she would be refunded the tax by way of repayment or adjustment to his or her tax credits.  Prices can range from over €1,300 for annual travel on Dublin Bus only, (tax refund at 41% - €533), to over €6,000 to include Irish Rail, Dublin Bus and Bus Éireann, (tax refund at 41% - €2,460).  Apart from the additional cost to the Exchequer, this would lead to an additional overhead in verifying claims.  Provision of passes by employers who are subject to a general PAYE audit system is administratively more efficient. 

On that basis I would have no plans to modify the scheme as it presently exists; I am satisfied that it works well for the vast majority of employees who wish to avail of it.

The bus, train or ferry pass must be issued by  an approved transport provider as defined in section 118 (5A) of the Taxes Consolidation Act 1997, however neither my Department nor Revenue maintains specific statistics in relation to the numbers of employees availing of the scheme.