Seán Fleming (Laois, Fianna Fail)
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22. To ask the Minister for Finance if he will consider some mechanism to give a tax break for low paid workers who have to pay annual rail commuter tickets to get to and from work (details supplied); if he will correct this unfair situation; and if he will make a statement on the matter. [7916/16]

Michael Noonan (Limerick City, Fine Gael)
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I understand the Deputy to be referring to the Travel Pass (Taxsaver) scheme.  I am advised by the Revenue Commissioners that this scheme operates on the basis that an employer pays for the Travel Pass on behalf of an employee at the start of the year and the payment is deducted from the employee's emoluments over the course of the year. This repayment arrangement is referred to as a "salary sacrifice". In these circumstances, section 118B of the Taxes Consolidation Act 1997 (the Act) provides that the remuneration foregone shall be exempt from tax.  This has the effect of reducing the cost of the Travel Pass to the employee by the amount of tax that would have been paid on the "sacrificed" income at the employee's marginal (i.e. highest) rate of tax.

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

The relief is available to any employee where the employer elects to operate the scheme. It should be noted that where an individual's employer does not participate in the Travel Pass scheme, any benefits that could arise under the scheme will not be available to any employees of that employer.  Additionally, where an employee's income is exempt from income tax, no benefit will arise.

I am satisfied that the scheme is working well and while all such initiatives are periodically reviewed I have no plans at present to modify it.