The employer's of seafarers PRSI refund scheme ended on 31 December 2003. The scheme commenced in 1996 on foot of proposals put forward by the Department of the Marine; it was a Commission approved support measure, that is a State aid to facilitate the employment of seafarers in the Irish PRSI system. The scheme refunded employers of such seafarers their PRSI contribution for each of their seagoing employees. The reintroduction of the scheme required the agreement of the Ministers for Social and Family Affairs and Finance and the co-operation of the Department's mercantile marine office.
An interdepartmental expert working group, comprising representatives of the three concerned Departments was established and chaired by my Department, tasked to produce a report recommending whether the scheme should be reintroduced. In December 2004, agreement was reached that the scheme should be reintroduced with effect from 1 January 2004 for a period of seven years. Commission approval for the reintroduction of the scheme, under the 2004 Community guidelines on State aid to maritime transport, is expected to be received in the next few weeks. There will, accordingly, be no break in the scheme's application.
In 2002 the Government introduced a sector specific corporation tax, the tonnage tax, for our ship operators. We have a unique €6,350 income tax allowance for seafarers in place. In the context of the upcoming budget, I had sought the Minister for Finance's agreement to the introduction of additional EU approved State aid for our maritime sector, focused on encouraging the employment of Irish seafarers, before Irish Ferries announcement on 19 September 2005 of its latest redundancy proposals.