Eoghan Murphy (Dublin South East, Fine Gael)
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304. To ask the Minister for Finance his plans to encourage employers to hire persons returning to work after being absent for a number of years for reasons of child rearing or other family considerations. [37804/15]

Michael Noonan (Limerick City, Fine Gael)
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Creating jobs and rewarding work is a key driver of growth and prosperity in the economy. It is critical that work pays for every family. The tax system has a role to play in supporting job creation and the maintenance of existing jobs.

As the Deputy will be aware, there are costs associated with hiring an employee, which include the wages of that employee and the relevant employer's PRSI liability. In addition, the level of the income tax liability of employees affects net pay, with consequential effects on decisions whether to take up or return to employment, or indeed to work additional hours. Reductions in income tax therefore can support job creation and thus lead to more job opportunities for individuals in general, as well as for those who have been absent from the workforce for a number of years for reasons of child-rearing or other family considerations.

The changes I announced in Budget 2016 aim to support job creation. They focus the majority of the available resources on tax reductions for low and middle income families.

From the 1st of January, the entry threshold to USC will increase from €12,012 to €13,000, removing over 40,000 workers from the scope of the charge entirely. It is estimated that over 700,000 income earners will not be liable to USC at all from next year.

The three lowest rates of USC are also being reduced, from 1.5%, 3.5% and 7% to 1%, 3% and 5.5% respectively. This will reduce the marginal rate of tax to 49.5 per cent for all earners under €70,044; the first time since the supplementary budget in April 2009 that the marginal rate has dropped below 50 per cent for middle income earners.

The Home Carer Tax Credit is being increased by €190 to bring it up to €1,000 per year, to assist single income married couples with children or who care for an elderly or incapacitated relative.  In a move specifically targeted at supporting lower-income families, the income threshold up to which the home carer can earn has also been increased by €2,120. Where the income of the primary earner does not exceed €35,600, the home carer will now be able to earn up to €7,200 and still benefit in full from the tax credit.

I have also announced in Budget 2016 changes to the current PRSI system, to address an issue affecting lower-paid workers which could result in a situation where an employee could receive a pay increase but find themselves with less net salary after deductions due to the PRSI 'step effect'. A tapered PRSI credit is being introduced to alleviate the step effect across a range of incomes. This change will ensure that low income earners within this income range will see a significant improvement in net take-home pay.

For Employer's PRSI, the entry point to the top 10.75 per cent rate will be increased by €20 per week to €376 per week. This will ensure that the liability to employer's PRSI for a full-time worker on the minimum wage will remain subject to the lower 8.5 per cent rate of PRSI following the increase in the minimum wage announced in Budget 2016.

These changes are designed to support job creation and reward work, both for new entrants to the job market and for people returning to the workforce after a number of years.

In addition, the Deputy may be interested in the JobsPlus scheme. It is an employer incentive which encourages and rewards employers who employ jobseekers who are on the Live Register. It is designed to encourage employers and businesses to employ individuals who have been out of work for long periods. It is administered by the Department of Social Protection. Further information is available at that Department's website at the following link .