Wednesday, 25 October 2017

Questions (173)

Catherine Murphy


173. Deputy Catherine Murphy asked the Minister for Foreign Affairs and Trade the details of the system of tax free allowances paid to Irish officials at embassies outside this State; the way in which they are calculated; the annual cost of same; and if he will make a statement on the matter. [45203/17]

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Written answers (Question to Foreign)

At present, Ireland’s diplomatic network includes 61 Embassies, 7 multilateral missions, 11 Consulates General and one Representative Office. A system of concurrent, or secondary, accreditations allows us to manage relations with a wider range of countries than those where we have missions. Missions abroad perform a wide range of functions in pursuit of Ireland’s foreign policy interests, including advancing government policies, in particular with the EU and the UN, providing frontline consular services to Irish citizens overseas, supporting Irish culture and enhancing Ireland’s visibility overseas. This work helps to cement our values and extend our influence on matters of interest to us, enhancing our global visibility and outreach. Missions are instrumental to the organisation and conduct of Ministerial-led Trade missions and the Saint Patrick’s Day programme of promotional visits and events both of which are crucial in maintaining contacts and influence with business and political leaders. In partnership with the State Agencies missions advance Ireland’s trade, tourism, education and investment objectives. The success of these collaborative promotional activities conducted in priority markets is illustrated by the impressive growth in relevant trade figures over recent years. For example, it estimated that the Irish food and beverage sector grew by 2% in 2016 to reach €11.5bn, representing growth of over 41% since 2010. Total overseas visitor numbers have grown every year since 2010 and last year grew by 10% to a record 9.5 million visitors. Exports by Enterprise Ireland client companies have also shown impressive growth in recent years surpassing the €20bn mark for the first time last year.

Maintaining a permanent corps of officers experienced in international affairs is vital to derive the maximum benefit from Ireland’s international engagement. In relative terms, the Irish Foreign Service is modest in size: 54 of Ireland’s missions abroad have one or two diplomatic officers, while only 12 have more than three. In addition to the Department’s own staff who undertake postings, we oversee the posting of officers from all Government Departments and other offices to Ireland’s mission network. The number of Irish officials posted to our diplomatic missions for the 2016/17 period is 380. The number of accompanying family members is 392 for the 2016/2017 period.

All our diplomats are civil servants; both when based at HQ and abroad they are paid the standard salary for their grade as determined by the Department of Public Expenditure and Reform which is subject to the normal taxation and social security obligations of civil servants. In common with other diplomatic services, this Department further supports officers who are assigned abroad to serve the State in an official capacity through a system of Foreign Service Allowances. This is to assist in defraying the additional costs to officers and their families of moving and living abroad. Allowances are based on independently sourced data. In line with Department of Public Expenditure and Reform sanction, Foreign Service Allowances are required to be reviewed once a year, or more often in locations that experience substantial fluctuation in key economic indicators on currency and exchange rates. The components of the allowance system are:

Cost of Living Allowance (COLA) , which is designed to estimate and defray costs associated with a higher cost of living at the post abroad. The department uses the services of an independent firm to provide cost of living indices for the various locations required. COLA only becomes payable at posts with a higher cost of living index than Dublin.

Local Post Allowance (LPA) , which assists mainly with the additional indirect costs arising from the representational role of the officers. This allowance which varies according to marital status and grade is payable at all locations abroad. Officers serving in designated “hardship” posts may also be currently entitled to a hardship allowances as part of their LPA.

Children’s Foreign Allowance (CFA) , which compensates an officer for the additional costs incurred with regard to qualifying children at post.

These allowances are temporary. They are not classified as allowances in the nature of pay and are not subject to income tax as they are designed to defray the additional costs to officers of living and working abroad for the period of the assignment. Provision is made in the Finance Act 2005 for the tax treatment of Foreign Service Allowances.

The total amount paid to staff in the form of Foreign Services Allowances in 2016 was €11,174,118. This total is made up of COLA, LPA and CFA; in 2016, COLA amounted to €3,829,738; LPA (including Hardship) amounted to €6,251,432; and CFA amounted to €1,092,948.