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Cycle to Work Scheme

Dáil Éireann Debate, Wednesday - 30 September 2020

Wednesday, 30 September 2020

Questions (65)

Jim O'Callaghan

Question:

65. Deputy Jim O'Callaghan asked the Minister for Finance if persons can avail of the cycle to work scheme if they are availing of the wage subsidy scheme; and if he will make a statement on the matter. [27443/20]

View answer

Written answers

The Temporary Wage Subsidy Scheme (TWSS) has now been replaced by the Employment Wage Subsidy Scheme (EWSS), which was legislated for under the recently enacted Financial Provisions (Covid-19) (No. 2) Act 2020.  The specific nature and terms of the EWSS arrangement are separate and distinct from the TWSS.  Where an eligible employer makes a payment of wages, within prescribed limits, to a qualifying employee during the scheme, the employer can claim an EWSS subsidy in respect of that employee.

In effect, the EWSS provides a flat-rate subsidy to qualifying employers, based on the number of qualifying employees on the payroll.  For every qualifying employee paid between €203 and €1,462 gross wages per week, the level of subsidy is €203.  For every qualifying employee paid between €151.50 and €202.99 gross per week, the subsidy is €151.50.  No subsidy is paid for employees paid less than €151.50 gross or more than €1,462 gross per week.

I have been advised by Revenue that the question of an individual’s entitlements in an employment context are matters that are outside the remit of the EWSS.  Essentially, the scheme has no role in relation to the employer/employee relationship in so far as the terms, conditions and entitlements of the employment are concerned, subject, of course, to the employer paying the requisite amount of gross wages to an employee, as outlined above, in order to qualify for subsidy in relation to the employee.

The cycle to work scheme enables an employer to purchase a bicycle and safety equipment for an employee without a taxable benefit-in-kind (BIK) arising.  The exemption applies to the first €1,250 expenditure incurred by an employer. This exemption limit is increased to €1,500 where the expenditure relates to the provision of an electric bicycle. Any amount in excess of these limits is liable to tax.

A number of conditions apply in order to avail of the scheme, for example the bicycle must be new and must be for the employee or director’s personal use in undertaking the whole or part of the journey to or from work. An individual may avail of the cycle to work scheme once every four years.

Alternatively, an employer and employee may enter into a salary sacrifice arrangement under which the employee agrees to sacrifice part of his or her salary in lieu of a benefit i.e. a bicycle or bicycle safety equipment in this instance. A salary sacrifice is subject to the same limits referred to above.

Further information on the cycle to work scheme can be found on Revenue’s website, available here.

I can confirm that participation in the wage subsidy scheme has no impact on participation in the cycle to work scheme.

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