Written Answers Nos. 150-169
150. Deputy Pádraig O'Sullivan asked the Minister for Finance the investment reforms being considered in advance of Budget 2026; if consideration will be given to cutting the rate of tax on certain investment funds from 41% bringing Ireland more in line with other EU countries; and if he will make a statement on the matter. [54426/25]
View answerI am aware of the importance of supporting retail investment. As the Deputy may be aware, in October 2024, ‘Funds Sector 2030: A Framework for Open, Resilient & Developing Markets’ was published, following a wide-ranging review of the funds and asset management sector. This report includes 42 recommendations to ensure that Ireland’s funds sector framework remains resilient, future-proofed, supportive of financial stability and a continued example of international best practice. Eight of these recommendations are to promote increased retail participation in capital markets. Retail investors are also a key focus of the European Union Savings and Investment Union.
I am committed to taking the necessary action to support this important sector. Recognising the complexities of the current taxation regime for retail investment sector as a I announced in my Budget 2026 speech, my officials are developing a roadmap for the taxation of retail investment, which will set out the intended approach to simplify and adapt the tax framework to encourage retail investment in future Finance Bills. The roadmap will take account of developments at EU level in respect of the Savings and Investments Union and is expected to be published by early 2026.
While the roadmap is being developed, I have taken action in Budget 2026, announcing changes to the relevant applicable tax rates. The rate of Investment Undertaking Tax (IUT), Life Assurance Exit Tax (LAET) and the rate of tax applicable to investments in equivalent offshore funds) and certain foreign life assurance policies will be reduced from 41% to 38%.
152. Deputy Ken O'Flynn asked the Minister for Finance if he will review the taxation treatment of redundancy payments, particularly ex-gratia or enhanced redundancy payments made in cases of involuntary redundancy, with a view to exempting such payments from income tax in recognition of the financial hardship associated with job loss. [54463/25]
View answer153. Deputy Ken O'Flynn asked the Minister for Finance if his Department has conducted any recent review or cost–benefit analysis on increasing the tax-free threshold for redundancy payments, and if he will publish the findings of any such review. [54464/25]
View answer154. Deputy Ken O'Flynn asked the Minister for Finance the estimated fiscal impact on the Exchequer of exempting all redundancy payments arising from involuntary redundancies from income tax, PRSI, and USC, based on the most recent available data. [54465/25]
View answer155. Deputy Ken O'Flynn asked the Minister for Finance if he will consider reforming the taxation rules to align redundancy payments with other non-taxable lump sums, such as lottery winnings or compensation payments, in circumstances where redundancy arises through no fault or choice of the employee. [54466/25]
View answer156. Deputy Ken O'Flynn asked the Minister for Finance the total tax yield to the Exchequer from taxpayers who received redundancy payments in each of the past five years. [54467/25]
View answerI propose to take Questions Nos. 152, 153, 154, 155 and 156 together.
The position is that the Redundancy Payment Acts 1967 – 2014 impose a statutory obligation on employers to recompense employees dismissed for reasons of redundancy, laid off or kept on part time for a minimum period. This includes statutory redundancy, which is calculated on the basis of two weeks’ pay per year of service, plus one additional week, subject to a maximum weekly pay figure of €600. Section 203 Taxes Consolidation Act 1997 (TCA 1997) exempts from income tax any payment arising in respect of statutory redundancy.
Lump sum payments which arise as part of a redundancy package come within the charge to income tax by virtue of section 123 Taxes Consolidation Act 1997 (“TCA 1997”). There are, however, significant reliefs available on the potential tax liability arising from such payments contained in section 201 and Schedule 3 of TCA 1997.
Section 201 TCA 1997 contains the provisions for an exemption or relief from taxation for payments on retirement, redundancy or termination. The basic exemption, increased exemption and the Standard Capital Superannuation Benefit (‘SCSB’) give relief from amounts which would otherwise be subject to taxation and are subject to a lifetime individual limit of €200,000.
Where a taxpayer receives an ex-gratia lump sum payment as part of a redundancy, a liability to tax arises on the amount of the payment that exceeds either the:
• Basic exemption and increased exemption, if due, or
• SCSB.
The Basic Exemption is €10,160 plus €765 for each complete year that a taxpayer worked for their employer. An ex-gratia termination payment will be tax free if it does not exceed the Basic Exemption.
A taxpayer may be entitled to an increase of €10,000 on the basic exemption if:
• they have not received an amount in excess of the basic exemption in the previous ten years, and,
• they are a not a member of an occupational pension scheme, or, if they are a member of an occupational pension scheme, but they revoke their entitlement to receive a tax-free lump sum from that scheme.
The SCSB is an additional relief taxpayers may be entitled to and is provided for in Schedule 3 of TCA 1997. SCSB is computed at 1/15th of a taxpayer’s average annual pay for the last 36 months in employment. This is then multiplied by the number of complete years of service with the employer. Any tax-free lump sum payments received, or which the taxpayer is entitled to receive, from their work pension, are subtracted from this benefit.
As stated, the basic exemption, increased exemption and the SCSB give relief from amounts which would otherwise be subject to taxation and are subject to a lifetime limit of €200,000 and the individual may apply whichever of the three exemptions is most beneficial to them. This lifetime limit is only applicable to ex-gratia lump sum payments which arise as part of a redundancy package and if any individual receives an amount exceeding the €200,000, the balance would be subject to income tax.
The Department of Enterprise, Trade and Employment (DETE) provides guidance on an individual’s statutory redundancy entitlements, and further information on same can be found on their website at: enterprise.gov.ie/en/what-we-do/workplace-and-skills/redundancy-payments/
In addition, the Revenue website sets out further information on the tax treatment of lump sum termination payments in the hands of the employee, and that information is accessible at: [www.revenue.ie/en/personal-tax-credits-reliefs-and-exemptions/lump-sum-payments/index.aspx]
I am advised by Revenue that redundancy payments are not separately recorded on payroll submissions, but instead are captured together with retirement lump sums. As both payment types are captured together it is not possible to identify which of those relate only to redundancy payments. Therefore, it is not possible to provide the data requested in relation to these payments, such as the number of taxpayers in receipt of such payments, the average payment amount, information in relation to the tax yield associated with such payments, or the cost of exempting these payments from taxation. In relation to the Deputy’s further questions, my Department has not carried out a recent review or cost benefit analysis in this area.
Finally, as you will appreciate, there are many requests for the introduction of new tax reliefs and the extension of existing ones. In considering these, it is important to be mindful of the public finances and the many demands on the Exchequer and to have regard to budgetary constraints and the equitable treatment of all taxpayers. Tax reliefs, no matter how worthwhile in themselves, reduce the tax base and make general reform of the tax system that much more difficult. Therefore, I have no plans to enhance the relief any further at this time.
157. Deputy Ken O'Flynn asked the Minister for Finance whether his Department has conducted or commissioned any comparative analysis of the effective tax burden on small private landlords in Ireland versus the United Kingdom; and if he will make a statement on the matter. [54482/25]
View answer158. Deputy Ken O'Flynn asked the Minister for Finance if he has considered introducing a lower rate of income tax or other fiscal incentive for small-scale landlords who remain in the Irish rental market; and if he will make a statement on the matter. [54483/25]
View answerI propose to take Questions Nos. 157 and 158 together.
My Department has not conducted or commissioned a comparative analysis as set out in the deputy's first question.
However, and as the deputy may be aware, Finance Act 2024 introduced the Residential Premises Rental Income Relief (RPRIR). It provides relief, at the standard rate, on a portion of a landlord’s residential rental income. The relief relates to tenancies registered with the Residential Tenancies Board or where a landlord leases a property to a public authority (including a local authority).
The relief is €3,000 in the tax year 2024, €4,000 in the tax year 2025 and €5,000 in the tax years 2026 and 2027, which is equivalent to a tax credit of up to €600, €800 and €1,000 respectively. This measure is effective until the end of 2027.
A full clawback of the benefit of the relief will apply in the event the landlord removes any property from the rental market in the four-year period.
The credit is available to all individual landlords of residential rental properties.
159. Deputy Ken O'Flynn asked the Minister for Finance whether his Department has considered tax deferral mechanisms or roll-over reliefs for landlords who sell one Irish property and reinvest in another Irish rental property, similar to schemes in the United Kingdom; and if he will make a statement on the matter. [54484/25]
View answerThe Deputy should note at the outset that “Roll-over relief” (under which the CGT payable on the proceeds of a gain was deferred if the proceeds were reinvested with the result that the tax liability is not realised until the assets are eventually sold) was abolished in Budget 2003 for disposals after 4 December 2002.
A rollover relief applied in respect of gains on the disposal of certain residential rental properties between 5 January 2001 and 3 December 2002, where the properties complied with certain housing regulations. For the gain to be fully rolled over/deferred, the entire proceeds, net of costs needed to be reinvested in similar residential property.
An issue with the relief was that chargeable gains which were deferred under roll-over relief were often never ultimately taxed. Therefore re-introducing roll-over relief would be likely to affect the yield from CGT.
Any proposal to introduce roll-over relief specifically for rental properties could have unintended consequences. It could have a distorting impact on the market and provide advantages to investors over first-time buyers.
In conclusion, I am not currently considering reintroducing roll-over relief .
165. Deputy Ken O'Flynn asked the Minister for Public Expenditure, Infrastructure, Public Service Reform and Digitalisation if his Department has conducted an analysis of the amount of the €120bn in spending which is attributable to once-off versus recurring commitments; and if he will publish the breakdown. [54422/25]
View answerMy Department published the Medium Term Expenditure Framework in September 2025. This included an analysis of temporary expenditure. This expenditure provided flexibility to respond to external shocks while protecting day-to-day investment in public services. Non-core expenditure reduced from €15.4 billion in 2020, following the onset of the Covid-19 pandemic, to €4.3 billion in 2024. Over the period 2022 to 2024 expenditure of approx. €3 billion was spent annually on Cost of Living supports.
All expenditure lines were reviewed as part of Estimates 2026. Temporary and one-off spending items were removed from the starting point of each Vote Group’s budget. This is detailed in the reconciliation table for each Vote Group published in Part II of the Budget 2026 Expenditure Report. Funding for 2026 was then allocated to Departments based on ongoing requirements. A total of €2.1 billion was allocated for Ukraine related expenditure across all Departments for 2026 as set out in Table 2 of the Expenditure Report.
166. Deputy Ken O'Flynn asked the Minister for Public Expenditure, Infrastructure, Public Service Reform and Digitalisation if his Department has assessed the impact of overruns in Budget 2025, from the originally planned €3bn in new expenditure to the estimated €8.5bn; and if he will publish the corrective measures being applied. [54424/25]
View answerBudget 2025 set out planned expenditure of €105.4 billion for 2025. Earlier this year, Government agreed to increase the ceiling by €0.9 billion to facilitate additional capital funding for the key areas of Housing and Education. This brought the Government Expenditure Ceiling for 2025 to €106.4 billion.
The Summer Economic Statement in July 2025 set out a revised Government Expenditure Ceiling for 2025 of €108.7 billion. This represented an increase of €2.3 billion from the revised ceiling of €106.4 billion. This additional funding consists of €1 billion current and €1.3 billion capital expenditure. This revision was made by Government to reflect policy choices to further support the delivery of key social and economic priorities as set out in the Budget 2026 documentation.
Managing the delivery of public services within budgetary allocations is the responsibility of each Minister and their Department, who are required to ensure that appropriate measures are in place to facilitate financial control within budgetary targets.
As part of my Department’s role supporting the appropriate use of public funds across government bodies, it establishes the governance frameworks, or rules, setting out the principles and procedures for how money should be spent. The aim of these rules is to support Accounting Officers in discharging their responsibility to ensure expenditure is managed in line with the Voted allocation and that services are delivered in an effective and efficient manner to support the achievement of value for money.
My Department is in regular communication with all spending Departments and Offices in respect of the management of expenditure within the agreed overall fiscal parameters, and provides ongoing reporting and monitoring of aggregate expenditure on a monthly basis, published in the Fiscal Monitor.
Chapter 3 of the Budget 2026 Expenditure Report details a series of reform proposals by sector to enhance spending efficiency.
167. Deputy Ken O'Flynn asked the Minister for Public Expenditure, Infrastructure, Public Service Reform and Digitalisation whether revenue from increased carbon-related motor fuel taxes will be directed towards electric vehicle infrastructure, public transport subsidies, or home energy grants; and if he will make a statement on the matter. [54493/25]
View answerIn Budget 2026, as per Sections 27, 28 & 29 of the Finance Act 2020, the carbon tax increased by €7.50 per tonne, as part of a schedule of increases to €100 per tonne in 2030. These increases are phased, with auto fuel changes being introduced annually in October, and changes for all other fuels the following May to allow for a lower rate on home heating fuels during the winter heating season.
The Programme for Government commits to maintaining the planned schedule of annual increases in the carbon tax to 2030 and to using the resulting revenues raised to support climate action measures and to ensure the most vulnerable are protected from unintended impacts of the tax increase.
On this basis, in Budget 2026 a total of €1,114 million of carbon tax revenue is being allocated to climate measures and to ensure the most vulnerable are protected from unintended impacts of the tax increase. This is an additional €163 million on the amount allocated in Budget 2025. The measures funded, relevant Departments, and the allocation for each is outlined below.
|
Departments |
Measures Funded |
2026 Total Allocation (€) |
2026 Additional (€) |
2025 Total Allocation (€) |
|
DCEE |
Residential & Community Energy Efficiency ODA - Green Climate Fund Just Transition Fund |
566 |
+89 |
477 |
|
DSP |
Targeted Social Protection Interventions |
350 |
+44 |
306 |
|
DAFM |
Incentivising Green and Sustainable Farming Green Agricultural Pilots |
173 |
+30 |
143 |
|
D/Transport |
Greenways/ Urban Cycling EV Charging infrastructure Providing Grants for EVs |
20 |
- |
20 |
|
DHLGH |
Peatlands Rehabilitation |
5 |
- |
5 |
|
Total |
|
1,114 |
+163 |
951 |
The Budget 2026 carbon tax allocation includes €558 million for Sustainable Energy Authority of Ireland residential and community energy upgrades, including the Solar PV (photovoltaic) Scheme. This is an €89 million increase on last year.
The Budget 2026 carbon tax allocation also allocates €20 million to the Department of Transport to continue funding sustainable transport measures that have received carbon tax funding since Budget 2020. This allocation is comprised of:
· €9 million to greenways and urban cycling
· €8 million to providing grants for electric vehicles
· €3 million to investment in electric vehicle charging infrastructure
My Department issues an annual publication on Budget Day titled The Use of Carbon Tax Funds, which contains further detail on these allocations, and includes information on the programmes funded from these amounts. All previous versions of this report are available on my Department's website.
168. Deputy Carol Nolan asked the Minister for Public Expenditure, Infrastructure, Public Service Reform and Digitalisation if the Office of Public works would support and fund the provision of mobility scooters so that those with conditions such as Parkinson’s disease and mobility issue can have access to sites like Emo Park, Lough Boora in County Offaly; if he is aware that such mobility scooters are provided at the entrance Dublin Zoo for just such a purpose; and if he will make a statement on the matter. [54284/25]
View answerThe Office of Public Works is committed to accessibility on our heritage properties. While recognising the benefits of such a scheme, there are a number challenges with the storing and maintenance of equipment, health and safety and public liability that would need to be considered in detail. Additionally, the OPW is not currently funded to provide such a service at our properties.
OPW staff at heritage properties across the country are available to help people with mobility issues to plan their visits. They offer practical guidance for our visitors to ensure that everyone can access their heritage.
The OPW has participated in schemes such as accessible cycling for people with mobility challenges. At John F. Kennedy Arboretum the OPW has collaborated with the Wexford Co Co. in the past to offer landscape tours by buggy to facilitate access for older people with mobility issues. The OPW is open to collaborating with community groups and social enterprises on implementing initiatives at our heritage properties where our collaborators have the resources to oversee the implementation of such schemes and where issues of health and safety and public liability can be appropriately managed.
169. Deputy Naoise Ó Cearúil asked the Minister for Public Expenditure, Infrastructure, Public Service Reform and Digitalisation the number of external consultancy contracts entered into by his Department in the past five years, including the original estimated cost, the final cost, and the reasoning for contracting this work rather than using internal resources. [54329/25]
View answerI wish to advise the Deputy that a deferred reply will be issued to him in respect of this Parliamentary Question, in line with Standing Order 52(1)(b).
