Claire Kerrane (Roscommon-Galway, Sinn Fein)
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547. To ask the Minister for Finance his plans to reform the PME refund to make it non-taxable; and if he will make a statement on the matter. [46424/25]

Paschal Donohoe (Dublin Central, Fine Gael)
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It is a general principle of taxation that, in the absence of a specific exemption, income from all sources is, in general, subject to tax.

Section 19 of the Taxes Consolidation Act (TCA) 1997, sets out that tax under Schedule E shall be charged in respect of every public office or employment for profit.

Section 112 of the TCA 1997 brings into charge all salaries, fees, wages, perquisites or profits of any kind arising from an office or employment. Therefore, the long-standing position is that all emoluments arising from an office or employment are chargeable to income tax under Schedule E in accordance with Section 112.

I am advised by Revenue that in determining whether this payment is taxable, the nature of the payment must be considered. In dealing with the Professional Master of Education (PME) Refund Scheme, the Department of Education’s Circular Number 0069/2024 states that the objective of the scheme is to encourage newly qualified teachers to take up teaching roles and the scheme provides for a payment of €2,000 to them in recognition of the additional costs that they have in undertaking a PME. Further information on this Circular is available at:

assets.gov.ie/static/documents/984e067b-00692024-.pdf

The payment represents a cash award for teachers for being an employee and this payment is to be made to teacher employees of the Minister for Education as employees who will be granted the payment if they satisfy conditions of that employment.

Section 112 TCA provides that a cash award made to an employee in recognition of the passing of an examination or acquiring a qualification is a taxable event. There is currently no provision exempting such payments from the charge to tax.

Further information regarding the provision of staff awards can be found in Revenue’s Tax and Duty Manual Part 05-01-01j:

www.revenue.ie/en/tax-professionals/tdm/income-tax-capital-gains-tax-corporation-tax/part-05/05-01-01j.pdf

In regard to the Deputy's query in relation to amending the tax relief available on the PME refund, such proposals for tax expenditure measures should be assessed in accordance with my Department's Tax Expenditure Guidelines. These make clear that any policy proposal which involves tax expenditures should only occur in limited circumstances where there are demonstrable market failures and where a tax-based incentive is more efficient than a direct expenditure intervention. Furthermore, I must always be mindful of the public finances and the many demands on the Exchequer. Tax reliefs, no matter how worthwhile in themselves, lead to a narrowing of the tax base.

As the Deputy will appreciate, decisions regarding taxation measures are made in the context of the annual Budget and Finance Bill processes, at the appropriate time, and having regard to the sound management of the public finances. However, I have no plans at present to change the tax treatment of the PME along the lines suggested.