Nov 2017
24
Premature births & maternity benefit
From 1st October 2017, the period for which Maternity Benefit is paid has been extended in cases where a baby is born prematurely. A premature birth is described as one at less than 37 weeks’ gestation. It is estimated that every year in Ireland approximately 4,500 babies are born prematurely.
Currently, under the Maternity Protection Acts 1994 and 2004, a mother is entitled to 26 weeks’ maternity leave and 16 weeks’ unpaid leave. Maternity leave normally starts two weeks before the babies expected due date or on the date of the birth of the child should it be earlier.
Under the new amendment, where a child is born prematurely the mother’s paid maternity leave will be extended by the equivalent of the duration between the actual date of birth of the premature baby and the date when the maternity leave was expected to start. For example, where a baby is born in the 30th week of gestation the mother would have an additional entitlement of approximately 7 weeks of maternity leave and benefit i.e. from the date of birth in the 30th week to the two weeks before the expected date of confinement. This additional period will be added onto the mother’s normal entitlement to 26 weeks of maternity leave and benefit, where the mother meets the ordinary qualifying criteria.
Mothers of preterm babies are advised to contact the Department of Employment Affairs and Social Protection (DEASP), email [email protected], to arrange the additional payment.
Babies surviving from the earliest gestations, such as 23 weeks, can spend months in a neonatal unit in hospital, by the time a premature baby gets to go home, a mother’s maternity leave can almost be used up. This new change has been heralded as a positive step in supporting parents during a difficult time.
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Nov 2017
20
Taxation of Illness Benefit - 2018
Currently, employers are required to tax Illness Benefit and Occupational Injury Benefit payments paid to employees by the Department of Employment Affairs and Social Protection (DEASP).
With effect from 1st January 2018, employers will no longer be responsible for taxing Illness Benefit. From this date Revenue will tax Illness Benefit by adjusting employee's tax credits and/or rate bands. Revenue will receive real-time interfaces of taxable DEASP income and the adjusted tax credits and/or rate bands will be notified to employers via P2C files. As a result of this change there will be more frequent P2Cs for employees. While payroll operators will no longer need to tax Illness Benefit, it will be extremely important to implement amended P2Cs immediately.
In addition, from 1st January 2018 Illness Benefit letters will no longer be delivered to the ROS Inbox. In light of this change, employers may need to review their sick pay schemes.
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Nov 2017
14
PAYE Modernisation – What do these changes mean for you?
The existing PAYE (Pay As You Earn) system was introduced nearly sixty years ago ensuring that correct deductions are made relating to pay and tax.
From 1st January 2019, this system for PAYE will undergo a long overdue update, but don’t worry, this update will benefit all involved – including employers and employees.
Employers –
PAYE Modernisation will change how employers report their payroll information to Revenue. Every time an employee is paid a file will need to be submitted (electronically) to Revenue, consisting of all details of employee payments, deductions and leaver information. The contents will be similar to the current annual P35, but this file will be submitted every pay period (weekly, monthly, fortnightly, etc.).
The update will also allow employers to submit a new employee’s information before they commence employment with them. PAYE Modernisation / Real Time Reporting (RTR) will result in a reduction in the occurrence of year end over/underpayments of tax.
This new Revenue reporting system is anticipated to be fully integrated into payroll software. Fortunately, it is envisaged that the workload will not increase as a result of PAYE Modernisation.
Employees –
An online statement will be sent before the start of the new tax year which will detail the employee’s tax credits and standard cut-off point (SRCOP). This will be based on estimated income and details available to Revenue.
Employees will be encouraged to make any adjustments to this online statement, including any claims for additional entitlements. This differs from the current system where an employee is required to wait until the end of the tax year to apply for any refund as a result of overpayment of taxes or to find out if there are amounts due to Revenue as a result of underpayment of taxes.
P60s will be abolished, employees will instead have access to their pay and tax record online, this will be updated on an ongoing basis throughout the year as they are paid. This will enable Revenue to carry out periodic reviews to identify if employees are utilising their tax credits and SRCOP to the maximum effect (e.g. where an employee has 2 employments) and, where applicable, employees will be prompted to reallocate tax credits and SRCOP.
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- PAYE Modernisation - Are You Ready For January 2019?
- Revenue moves to PAYE Modernisation
- Auto Enrolment Planned for Ireland by 2021
- 2018 and Beyond
Nov 2017
6
PAYE Modernisation - Are You Ready For January 2019?
Revenue has released an information leaflet titled “PAYE Modernisation – Are You Ready?”. This kick-starts their awareness campaign for businesses to get ready for payroll changes called PAYE Modernisation or Real Time Reporting (RTR). Revenue outlines the steps that all employers need to take in order to ensure that their current records and obligations are up-to-date and correct.
PAYE Modernisation will change how employers report payroll information for their employees to Revenue. A file will need to be submitted (electronically) to Revenue, containing all details of employee payments. The contents are similar to the annual P35, however, this file will be submitted every pay period (weekly, monthly, fortnightly, etc.).
If you are an employer who uses payroll software, then the work involved to comply with PAYE Modernisation will be minimal. However, for smaller employers who do not use payroll software, the process of complying with PAYE Modernisation will be time-consuming and stressful. Currently, these employers make one manual submission to Revenue through their annual P35. With PAYE Modernisation, these employers will be required to make an employer submission to Revenue each pay period in real time. The employer submission will contain details comparable to what currently appears on an employer’s P35 return.
With PAYE Modernisation in mind, Revenue has contacted nearly 400 employers regarding their P35L returns for 2016. These returns contained employees who were never previously registered as working with the employer. This communication reminds those employers of their obligation to comply with PAYE regulations and requests those employers to submit a P46 for the non linked employees currently in their employment, the commencement date should be input as 1st January 2017 for employees that commenced employment before the current tax year. This action will then result in a new P2C (tax credit certificate) being issued for these employees.
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Nov 2017
2
Auto Enrolment Planned for Ireland by 2021
Taoiseach Leo Varadkar said that the Government will publish a five year roadmap for pension reform before the end of the year. This will include the introduction of an auto-enrolment pension scheme for private sector workers, two-thirds of whom currently have no occupational pension to supplement their state pension. The first payments are expected to be made into new individually held funds by 2021.
He said the government would “work closely and consult with employers” in designing the new scheme. The Minister for Employment & Social Protection Regina Doherty, said that there will be no discrimination in the new auto-enrolment pension scheme proposed by Taoiseach Leo Varadkar.
“You can’t discriminate somebody that’s earning 20 grand to somebody that’s earning 40 grand,” said Minister Regina Doherty.
“But it’s always going to be based on the percentage, so whatever percentage you put in, the employer will put in a percentage and the State will put in a percentage, and we have to work out the details as to what that percentage will be.”
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Nov 2017
1
10% pay rise for Construction Sector under new Sectoral Employment Order
A Sectoral Employment Order (SEO) for the general construction industry has been signed into law by the Minister for State at the Department of Business, Enterprise and Innovation, Pat Breen.
Effective from 19th October 2017, the order provides for mandatory terms and conditions in the construction sector, including pay, pensions and sick leave. In finalising the Order, the Labour Court received submissions from the Construction Industry Federation (CIF), UNITE the Union, the Irish Congress of Trade Unions and the Trustees of the Construction Workers Pension Scheme.
Who does the Order affect?
The Order applies to employers in the construction sector, regardless of whether or not they are CIF members. The sector is defined to include both “Building Firms” and “Civil Engineering Firms”, examples will include companies involved in; construction, reconstruction, alteration, repair, painting and decorating. It is estimated that the new Order will apply to approximately 50,000 workers. Notably electricians and plumbers are not included.
Hourly Rates
The new minimum hourly pay rates are:
- New Entrant Workers: €13.77
- Category 1 Workers (General Operatives with more than 1 years’ experience: €17.04
- Category 2 Workers (Skilled General Operatives): €18.36
- Craft Workers (Includes: Bricklayers, Carpenters, Plasterers): €18.93
- Apprentices
- Year 1: 33.3% of Craft Rate
- Year 2: 50% of Craft Rate
- Year 3: 75% of Craft Rate
- Year 4: 90% of Craft Rate
These new rates are approximately 10% higher than they had been under the previous Registered Employment Agreement (REA).
Unsocial Hours
The following unsocial hours payments will now apply:
- Monday to Friday, normal finish time to midnight: time and a half
- Monday to Friday, midnight to normal starting time: double time
- Saturday, first four hours from normal starting time: time and a half. All subsequent hours until midnight: double time
- Sunday, all hours worked: double time
- Public holidays, all hours worked: double time plus an additional day’s leave
Pension Scheme and Sick Pay Scheme
The Order provides that employers must provide pension benefits with no less favourable terms than those in the Construction Workers Pension Scheme (CWPS). The Order also provides for a mandatory sick pay scheme, in recognition of the health and safety risks posed to industry workers.
Dispute Resolution
The Order includes a new dispute resolution procedure. No strike or lock-out is allowed unless and until all stated dispute resolution procedures have been exhausted.
Where to from here?
The Order is a significant development for those in the general construction industry. Employers will need to review their payment practices to ensure that they comply with the new requirements.
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