Pádraig O'Sullivan (Cork North Central, Fianna Fail)
Link to this: Individually | In context | Oireachtas source

132. To ask the Minister for Finance if financial supports will be put in place for those working from home given the ongoing increase in the cost of utilities; and if he will make a statement on the matter. [47204/22]

Paschal Donohoe (Dublin Central, Fine Gael)
Link to this: Individually | In context | Oireachtas source

The Government recognises the impact rising prices have had on households and businesses across the country and has taken significant action. Some €2.4 billion in cost of living measures has been announced since last October. Looking ahead, the Government will continue to address these challenges head on. Budget 2023 will be a ‘Cost of Living Budget’ and will build on the fiscal supports the Government has already provided to cushion the impact of rising prices.

The Government supported households and firms through the pandemic and will continue to do so in the face of unprecedented energy price spikes caused by Putin’s war. However, we must be cognisant that resources are limited and while government policy will absorb some of the price shock, we cannot cushion households and businesses from the entire impact. The Government has to balance the appropriate response to the increased cost of living in Ireland with the unprecedented level of global economic uncertainty and macroeconomic risk. Furthermore, in calibrating how we respond to the current challenges, it is important that we strike the right balance and ensure that policy doesn’t inadvertently add further inflationary pressures into the system.

I am advised by the Revenue Commissioners that there are a number of administrative and legislative provisions under which employers can support employees in working from home.

Employees may incur certain expenditure in the performance of their duties working from home, such as additional heating, electricity, and broadband costs. Revenue operates a long-standing administrative practice which allows an employer to make payments up to €3.20 to employees, for each day worked from home, subject to certain conditions, without deducting PAYE, PRSI or USC. There is no legal obligation on an employer to make such a payment, as it is at the discretion of the employer.

The home-working allowance originated in 1993; according to the CSO's CPI Inflation Calculator, the inflation rate in Ireland since January 1993 is 81 per cent which, if applied to the €3.20 rate, would amount to €5.79 today.

As the Deputy may be aware, my Department reviewed the tax arrangements for remote working as part of the 2021 Tax Strategy Group process and published the resultant paper on the Department's website. The review found that the daily tax-free rate of €3.20, up to €16 per week or €832 per annum compares favourably internationally. For example, in the UK, the weekly rate is just £6 per week or a maximum of £312 per annum.

Where an employer does not pay €3.20 per day to a remote worker, or that amount doesn’t sufficiently cover the additional cost borne by the employee as a result of working from home, the employee may be entitled to claim Remote Working Relief, which is provided for in section 114A of the Taxes Consolidation Act (TCA) 1997. This measure allows employees, subject to satisfying certain conditions, to claim an income tax deduction amounting to 30% of the relevant cost of electricity, heating and broadband for the days spent working from home as a remote worker.

Revenue has advised that the provision of equipment, such as computers, printers, scanners and office furniture by the employer to enable the employee work from home will not attract a benefit-In-kind charge, where the equipment is provided primarily for business use. In addition, the provision of a telephone line, broadband and such facilities for business use will also not give rise to a benefit-in-kind charge, where private use of the connection is incidental. These exemptions are provided for in section 118 TCA 1997.

Finally, comprehensive guidance material on the range of measures available to remote workers is published on the Revenue website. Detailed material is included in Tax and Duty Manual Part 05-02-13 Remote Working Relief, which is available at: www.revenue.ie/en/tax-professionals/tdm/income-tax-capital-gains-tax-corporation-tax/part-05/05-02-13.pdf.