Dáil Éireann Debate, Tuesday - 28 April 2026
406. Deputy James O'Connor asked the Tánaiste and Minister for Finance the action he will take to increase the six-month time limit for income tax exemption to complete a retraining course paid for by the employer as part of a redundancy package; and if he will make a statement on the matter. [29579/26]
Amharc ar fhreagraSection 201 ‘Exemptions and Reliefs in respect of tax under section 123’ of the Taxes Consolidation Act 1997 provides a number of reliefs from income tax on a lump sum payment arising from the termination of an employment. Section 201(1A) provides that, where an employer pays the cost of retraining an employee as part of a redundancy package, that cost of the retraining, up to a maximum of €5,000, will be exempt from income tax.
For the retraining payment to qualify for the exemption under Section 201(1A), certain conditions must be met. These conditions are:
• the employee is a person who has at least 2 years continuous full-time service;
• the retraining is part of a redundancy package and is designed to improve skills or knowledge used either in obtaining gainful employment or setting up a business; and
• the retraining is completed within 6 months of the termination of employment.
The grant cannot be provided as a monetary part of a redundancy package by the employer.
In addition, where a redundancy package which includes a retraining opportunity is provided by an employer, the retraining must be available to all eligible employees in order to be eligible for the exemption.
I do not currently have any plans to amend this timeline for completion of this retraining, but of course matters are kept under review.
Further guidance on this matter can be found in TDM Part 05-05-19 Payments on Termination of an Office or Employment or Removal from an Office or Employment – www.revenue.ie/en/tax-professionals/tdm/income-tax-capital-gains-tax-corporation-tax/part-05/05-05-19.pdf.
