Dáil Éireann Debate, Wednesday - 29 September 2010
325 Deputy John O’Mahony asked the Tánaiste and Minister for Education and Skills the changes she has made to the administration of the cycle to work scheme; the reasons for making the changes; and if she will make a statement on the matter. [33648/10]
Amharc ar fhreagraThe revised arrangements for the administration of the Cycle to Work Scheme in 2011 and subsequent years for the teaching and non teaching staff of Primary, Secondary, Community and Comprehensive schools paid on payrolls operated by my Department are outlined in Circular Letter number 46/2010. The terms of the scheme for staff employed and paid by Vocational Education Committees are outlined in Circular Letter number 51/2010.
Under the terms of the revised scheme, eligible staff employed in the 2010/2011 school year have three application date options to submit applications to join the scheme. Applicants can only apply for the scheme under one of the options.
The closing dates for the different options are the 7th January, 7th March, and 23rd April, 2011. Salary deductions will commence during the months February, April and May respectively for the three options.
The changes were introduced as the feedback received on the 2010 scheme highlighted the need for more flexibility and an extended application period to allow eligible staff in schools avail of the benefits of the "Cycle to Work" scheme.
Copies of the Circulars are set out below for your information.
Circular Letter 0051/2010
To the Chief Executive Officer of each Vocational Education Committee
Cycle to Work Scheme
For 2011 and Subsequent Years
1 INTRODUCTION
The Minister for Education and Science wishes to inform CEOs of the Cycle to Work Scheme for 2011 and subsequent years. The scheme will apply to all staff employed by VECs.
Legislation was introduced in the Finance (No. 2) Act 2008 which allows an employer to incur the expense of providing an employee with a new bicycle1 without the employee being liable for benefit-in-kind taxation. The legislation also permits the benefit-in-kind tax exemption to apply in the context of salary sacrifice, that is, where an employee agreed to forego or sacrifice part of his/her salary in lieu of the provision of new bicycle by the employer. The employee will not pay tax, PRSI, income levy or pension related deduction on the remuneration sacrificed.
The scheme allows an employer to purchase a new bicycle and/or bicycle safety equipment up to a value of €1,000 once every 5 years on behalf of an employee.
A guidance note on the scheme including a series of Questions and Answers provided by the Revenue Commissioners can be found at:
http://www.revenue.ie/en/practitioner/law/bik-exemption-for-bicycles.pdf
The scheme applies only to new bicycles and bicycle safety equipment purchased from approved suppliers. [A list of suppliers is available on the OPW web site at:
http://www.opw.ie/en/OurBusinessUnits/GovernmentSuppliesAgency/Cycle-to-WorkScheme/.]
1The scheme also applies to safety equipment relating to cycling.
2 REQUIREMENTS OF THE SCHEME
Salary sacrifice by an employee in respect of the bicycle will be acceptable to the Revenue Commissioners as being effective for tax purposes under the following conditions:
1. There must be a bona fide and enforceable alteration to the terms and conditions of employment, i.e. exercising a choice of benefit instead of salary.
2. The alteration must not be retrospective and must be evidenced in writing.
3. There must be no entitlement to exchange the benefit for cash;
4. The choice exercised (i.e. benefit instead of cash) cannot be made more frequently than once in a five-year period
5. The choice exercised must be irrevocable for the relevant year for which it is made.
The salary sacrifice will have no impact on pension contributions or on pension benefits.
3 APPLICATION FOR THE SCHEME
There are three application options for the scheme between January and April and applicants should apply for the scheme under one of these options. Completed applications must be forwarded to the administration office in the appropriate VEC no later than the dates specified below.
|
Application Option |
Closing date for receipt of applications |
|
Option 1 |
07th January |
|
Option 2 |
07th March |
|
Option 3 |
23rd April |
Individuals wishing to avail of the Cycle to Work Scheme are required to:
1. Complete an Application Form (Appendix 1) which outlines the items to be purchased, and
2. Sign the Salary Deduction Authorisation Form (Appendix 2) and
3. Read and agree to the conditions governing the scheme (Appendix 3).
The Department recommends that, if possible, the forms were made available to staff on the each VEC's website.
The application must be completed in conjunction with the supplier. It will contain information on the new bicycle/cycle safety equipment supplied and the details of the supplier. The supplier must attach the relevant invoice. The supplier must also accept that the payment from the VEC will be made by Electronic Funds Transfer (EFT) only.
4. SALARY DEDUCTION
The Salary Deduction Authorisation Form will set out the salary sacrifice for the items requested.
Salary deductions should commence during the month specified below for the three options:
|
Application Option |
Commencement date for salary deductions |
|
Option 1 |
February |
|
Option 2 |
April |
|
Option 3 |
May |
All salary deductions must be completed by the last payroll in November, therefore salary deductions under options 2 and 3 will be spread over a reduced number of salary payments. In the case of applicants employed under a regular part time contract due to expire in August, deductions should be completed by the last payroll in August. An employee may alternatively opt to complete salary deductions over a shorter period
Once the salary deduction arrangements have been put in place, the bicycle / cycle safety equipment may be collected from the supplier.
5. DISSEMINATION OF INFORMATION
You are requested to bring the contents of this Circular to the attention of all staff in your VEC. This circular can be accessed on the Department of Education and Skills web page:www.education.ie.
6. QUERIES
Queries regarding the operation of this scheme should be directed by email to the VEC Financial and Administrative Personnel Section at: financialvec@education.gov.ie.
7. PREVIOUS CIRCULAR
This circular supersedes circular 0063/2009.
M. Ryan.
Principal Officer.
VEC Financial and Administrative Personnel
August 2010
Appendix 1
Cycle to Work Scheme
Application Form
To: Cycle to Work Scheme
Enter VEC address
Please clearly mark envelope “Cycle to Work Scheme”
Please circle as appropriate:
Current post: Teacher or Non teaching staff
1 Employee Personnel Details
Name: (as on payslip) _________
Home Address _______________________
_______________________
Contact Telephone No.____ School roll number______
PPS No.: (as on payslip)
Payroll No.: (as on payslip)
2 Supplier details
Supplier Name ___________ VAT Number _______
2.1 Supplier Tax Clearance Certificate (TCC) details:
Number _________ Expiry Date _________
2.2 Supplier’s Bank details for EFT Payment:
Bank Account No.
Bank Sort Code
Bank Name & Address _________________
__________________
Please ensure that the bank account is within the Republic of Ireland and will support the Electronic Money Transfer System.
3 Details of Bicycle/Cycle Equipment Ordered
|
Goods |
Description |
Price inclusive of VAT |
|
Bicycle |
||
|
Cycle helmet conforming to European standard EN1078 |
||
|
Bells and bulb horn |
||
|
Lights including dynamo packs |
||
|
Mirrors and mudguards |
||
|
Cycle clips and dress guards |
||
|
Panniers, luggage carriers and straps |
||
|
Locks and chains |
||
|
Pumps, puncture repair kits, cycle tool kits and tyre sealant |
||
|
Reflective clothing along with white front reflectors and spoke reflectors |
||
|
Total |
Attach Invoice For Bicycle/Cycle Equipment of Total Ordered.
Appendix 2
Cycle to Work Scheme
Salary Deduction Authorisation Form
I hereby authorise a salary sacrifice of €_________as per invoice of my annual basic salary in lieu of the provision of new bicycle/cycle safety equipment by enter name of VEC VEC. I realise that this arrangement will operate until the salary sacrifice has been recouped and that the deductions will be reflected in my pay slips over one of the periods below (please indicate your selected deduction period):
|
February to November |
April to November |
May to November |
|||
|
February to August * |
April to August* |
May to August* |
*August in the case of applicants employed under a fixed term or regular part time contract due to expire in August.
I declare that the bicycle/cycle safety equipment supplied under this scheme is for my personal use and will be used primarily for qualifying journeys, i.e. journeys to or from work and/or between places of work and that such use is subject to any rules or conditions that are in force concerning the operation and use of the equipment.
I understand that I should use the bicycle in line with all rules and regulations as set out by the Road Safety Authority (RSA) and make use of proper cycle safety equipment at all times.2
I have read and I agree to Cycle-to–Work Scheme conditions and circular 0051/2010
____________________________
2Please see RSA web site http//www.rulesoftheroad.ie/rules-for-pedestrians-cyclists-motorcyclists/index.html.
To be completed by an employee who wishes to complete the salary deductions over a shorter period;
I wish to complete the salary deductions over one of the following shorter periods:
|
Start Date |
End Date — Please specify |
|
February |
|
|
April |
|
|
May |
NAME _______________
BLOCK CAPITALS PLEASE
PPSN ______________
Signed: __________ Date:
____________
|
Data Protection |
|
Name of VEC will treat all personal data you provide on this form as confidential and will use it solely for the purpose intended. The information will only be disclosed as permitted by law or for the purposes listed in the VEC’s registration with the Data Protection Commissioner — REF 10764/A |
|
If the information you have provided is to be used for purposes other than outlined in the VEC’s registration with the DPC your permission will be sought. |
Appendix 3
Cycle to Work Scheme Conditions
1. The applicant must be employed in a Permanent, Contract of Indefinite Duration (C.I.D), fixed term, or Regular Part Time capacity at the date of application. The employment must be capable of lasting until the salary sacrifice has been recouped. It is not possible for casual or non casual employees to avail of the scheme.
2. The employee must sacrifice or forego part of his/her annual basic salary in lieu of the provision of new bicycle/cycle safety equipment by the VEC. This arrangement will operate until the salary sacrifice has been recouped and this will be reflected in his/her pay slips over that period.
3. The new bicycle/cycle safety equipment acquired under the scheme must be used primarily for the purpose of transport to or from work and/or traveling between work places.
4. When purchasing a new bicycle, the employee must be aware that the National Safety Authority of Ireland implements on behalf of the European Commission certain bicycle safety standards. Bicycles that comply with such standards are presumed to comply with the EU General Product Safety Directive 2001/96/EC which lays down an obligation on producers to place safe products on the market. The relevant standards are;
I.S. EN14764:2006 — city and trekking bikes,
I.S. EN14766:2006 — mountain bikes,
I.S. EN14781:2006 — racing bicycles.
More information on these matters can be accessed athttp://www.nsai.ie
5. The employee will not be able to cease his or her participation in the scheme prior to the expiry of the salary sacrifice arrangement, except in cases of termination of employment. Where employment is terminated before the expiration of the salary sacrifice arrangement, the employee must pay the balance due to the VEC, which may be deducted from any outstanding payment due in termination of the employment. Where this is not possible, it may be then necessary for the VEC to recover the balance due from the employee.
6. Participation in the scheme will be limited to once in each five-year period. Accordingly any person who availed of the scheme in 2010 under the terms of Circular 0063/2009 cannot re-apply in 2011.
7. The scheme applies only to new bicycle/cycle safety equipment purchased from approved providers. A full list of providers is available from the OPW website:
http://www.opw.ie/en/ourbusiness units/governmentsuppliesagency/cycletoworkscheme/.
8. The payment for the bicycle/cycle safety equipment will be made to the supplier by the VEC. It will be a requirement of the scheme for participating suppliers that all warranties relating to the bicycle/bicycle safety equipment will be for the benefit of the employee and all issues arising in relation to the warranties will remain between the employee and the supplier.
9. The processing of applications will only commence after the closing date for each application option. At the time of purchasing the bicycle or safety equipment the supplier should be advised that payment will only issue subsequent to the closing date.
10. The employee acknowledges that the VEC is not responsible or liable for the security, disposal, maintenance, repair and use of the bicycle or bicycle safety equipment.
11. The VEC accepts no responsibility for misuse of bicycles or equipment by the employees and asserts that bicycles and bicycle safety equipment acquired by virtue of the scheme are strictly non transferable.
Circular Letter 46/2010
To the Management Authorities of Primary, Secondary,
Community and Comprehensive Schools
Cycle to Work Scheme
For 2011 and Subsequent Years
4 INTRODUCTION
The Minister for Education and Skills wishes to inform management authorities of Primary, Secondary, Community and Comprehensive Schools of the Cycle to Work Scheme for 2011 and subsequent years. The scheme will apply to teachers, special needs assistants, clerical officers, caretakers and child care workers paid on payrolls operated by the Department of Education and Skills as paymaster.
Legislation was introduced in the Finance (No. 2) Act 2008 which allows an employer to incur the expense of providing an employee with a new bicycle3 without the employee being liable for benefit-in-kind taxation. The Legislation also permits the benefit-in-kind tax exemption to apply in the context of salary sacrifice, that is, where an employee agreed to forego or sacrifice part of his/her salary in lieu of the provision of new bicycle by the employer. The employee will not pay tax, PRSI, income levy or pension related deduction on the remuneration sacrificed.
1The scheme also applies to safety equipment relating to cycling.
The scheme allows an employer to purchase a new bicycle and/or bicycle safety equipment up to a value of €1,000 once every 5 years on behalf of an employee.
A guidance note on the scheme including a series of Questions and Answers provided by the Revenue Commissioners can be found at:
http://www.revenue.ie/en/practitioner/law/bik-exemption-for-bicycles.pdf
The scheme applies only to new bicycles and bicycle safety equipment purchased from approved suppliers. [A list of suppliers is available on the OPW web site at
http://www.opw.ie/en/OurBusinessUnits/GovernmentSuppliesAgency/Cycle-to-WorkScheme/.]
For the purpose of the Cycle to Work Scheme, any reference to employer in this circular can be taken as a direct reference to the Department of Education and Skills, as paymaster. Any reference to employee relates to the individual primary or second level teacher, special needs assistant, clerical officer, caretaker or child care worker.
5 REQUIREMENTS OF THE SCHEME
Salary sacrifice by an employee in respect of the bicycle will be acceptable to the Revenue Commissioners as being effective for tax purposes under the following conditions:
6. There must be a bona fide and enforceable alteration to the terms and conditions of employment, i.e. exercising a choice of benefit instead of salary.
7. The alteration must not be retrospective and must be evidenced in writing.
8. There must be no entitlement to exchange the benefit for cash;
9. The choice exercised (i.e. benefit instead of cash) cannot be made more frequently than once in a five-year period
10. The choice exercised must be irrevocable for the relevant year for which it is made.
The salary sacrifice will have no impact on pension contributions or on pension benefits.
6 APPLICATION FOR THE SCHEME
There are three application options for the scheme between January and April and applicants may apply for the scheme under one of these options. Completed applications must be forwarded to the appropriate Payroll Section in the Department of Education and Skills, Cornamaddy, Athlone, Co. Westmeath no later than the dates specified below
|
Application option |
Closing date for receipt of applications |
|
Option 1 |
07th January |
|
Option 2 |
07th March |
|
Option 3 |
23rd April |
Individuals wishing to avail of the Cycle to Work Scheme will be required to:
4. Complete an Application Form (Appendix 1) which outlines the items to be purchased,
5. Sign the Salary Deduction Authorisation Form (Appendix 2) and
6. Read and agree to the conditions governing the scheme (Appendix 3).
These forms can be downloaded directly from this Department's website,www.education.gov.ie in the Section “Education Personnel”, “Payroll”, “General Payroll Information”.
The application must be completed in conjunction with the supplier. It will contain information on the new bicycle/cycle safety equipment supplied and the details of the supplier. The supplier must attach the relevant invoice. The supplier must also accept that the payment from the Department will be made by Electronic Funds Transfer (EFT) only.
4. SALARY DEDUCTION
The Salary Deduction Authorisation Form will set out the salary sacrifice for the items requested.
Salary deductions will commence during the month specified below for the three options:
|
Application option |
Commencement date for salary deductions |
|
Option 1 |
February |
|
Option 2 |
April |
|
Option 3 |
May |
All salary deductions must be completed by the last payroll in November, therefore salary deductions under options 2 and 3 will be spread over a reduced number of salary payments. In the case of applicants employed under a regular part time contract due to expire in August, deductions must be completed by the last payroll in August. An employee may alternatively opt to complete salary deductions over a shorter period
Once the salary deduction arrangements have been put in place, the bicycle/cycle safety equipment may be collected from the supplier.
5. DISSEMINATION OF INFORMATION
Management authorities are requested to bring the contents of this Circular to the attention of all teachers, special needs assistants, clerical officers, caretakers and child care workers in their schools paid on payrolls operated by the Department of Education and Skills as paymaster. This circular can be accessed on the Department of Education and Skills web page: www.education.ie.
6. QUERIES
Queries regarding the operation of this scheme should be directed by email to the appropriate Payroll area:
primtch_payroll@education.gov.ie
pppayroll@education.gov.ie
NTSPayroll@education.gov.ie
7. PREVIOUS CIRCULAR
This circular supersedes circular 54/2009.
P. Maloney.
Principal Officer.
August 2010.
Appendix 1
Cycle to Work Scheme
Application Form
To: Cycle to Work Scheme
Payroll Division
Department of Education and Skills,
Athlone, Co. Westmeath
Please clearly mark envelope “Cycle to Work Scheme” and “Primary Payroll”, “Post
Primary Payroll” or “Non Teaching Staff Payroll” as appropriate.
Please circle as appropriate:
Current post: Teacher or Non teaching staff
Sector: Primary or Post Primary
1 Employee Personnel Details
Name: (as on payslip) _________
Home Address _______________________
_______________________
Contact Telephone No.____ School roll number ______
PPS No.: (as on payslip)
Payroll No.: (as on payslip)
2 Supplier details
Supplier Name ___________ VAT Number _______
2.1 Supplier Tax Clearance Certificate (TCC) details:
Number _________ Expiry Date _________
2.2 Supplier’s Bank details for EFT Payment:
Bank Account No.
Bank Sort Code
Bank Name & Address _________________
__________________
Please ensure that the bank account is within the Republic of Ireland and will support the Electronic Money Transfer System.
3 Details of Bicycle /Cycle Equipment Ordered
|
Goods |
Description |
Price inclusive of VAT |
|
Bicycle |
||
|
Cycle helmet conforming to European standard EN1078 |
||
|
Bells and bulb horn |
||
|
Lights including dynamo packs |
||
|
Mirrors and mudguards |
||
|
Cycle clips and dress guards |
||
|
Panniers, luggage carriers and straps |
||
|
Locks and chains |
||
|
Pumps, puncture repair kits, cycle tool kits and tyre sealant |
||
|
Reflective clothing along with white front reflectors and spoke reflectors |
||
|
Total |
Attach Invoice For Bicycle/Cycle Equipment of Total Ordered.
Appendix 2
Cycle to Work Scheme
Salary Deduction Authorisation Form
I hereby authorise a salary sacrifice of €_________as per invoice of my annual basic salary in lieu of the provision of new bicycle/cycle safety equipment by the Department of Education and Skills. I realise that this arrangement will operate until the salary sacrifice has been recouped and that the deductions will be reflected in my pay slips over one of the periods below, please indicate your selected deduction period;
|
February to November |
April to November |
May to November |
|||
|
February to August* |
April to August* |
May to August * |
*August in the case of applicants employed under a fixed term or regular part time contract due to expire in August.
I declare that the bicycle/cycle safety equipment supplied under this scheme is for my personal use and will be used primarily for qualifying journeys, i.e. journeys to or from work and/or between places of work and that such use is subject to any rules or conditions that are in force concerning the operation and use of the equipment.
I understand that I should use the bicycle in line with all rules and regulations as set out by the Road Safety Authority (RSA) and make use of proper cycle safety equipment at all times.4
I have read and I agree to Cycle-to-Work Scheme conditions and circular 0046/2010.
To be completed by an employee who wishes to complete the salary deductions over a shorter period;
I wish to complete the salary deductions over one of the following shorter periods:
|
Start date |
End date — Please specify |
|
February |
|
|
April |
|
|
May |
NAME _________________
BLOCK CAPITALS PLEASE
PPSN ________________
Signed: ___________ Date: __________
|
Data Protection |
|
The Department of Education and Skills will treat all personal data you provide on this form as confidential and will use it solely for the purpose intended. The information will only be disclosed as permitted by law or for the purposes listed in the Departments registration with the Data Protection Commissioner — REF 10764/A |
|
If the information you have provided is to be used for purposes other than outlined in the Departments registration with the DPC your permission will be sought. |
Appendix 3
Cycle to Work Scheme Conditions
1. The applicant must be employed in a Permanent, Contract of Indefinite Duration (C.I.D), fixed term, or Regular Part Time capacity at the date of application. The employment must be capable of lasting until the salary sacrifice has been recouped. It is not possible for casual or non casual employees to avail of the scheme.
2. The employee must sacrifice or forego part of his/her annual basic salary in lieu of the provision of new bicycle/cycle safety equipment by the Department. This arrangement will operate until the salary sacrifice has been recouped and this will be reflected in his/her pay slips over that period.
3. The new bicycle/cycle safety equipment acquired under the scheme must be used primarily for the purpose of transport to or from work and/or traveling between work places.
4Please see RSA web site http://www.rulesoftheroad.ie/rules-for-pedestrians-cyclists-motorcyclists/index.html.
4. When purchasing a new bicycle, the employee must be aware that the National Safety Authority of Ireland implements on behalf of the European Commission certain bicycle safety standards. Bicycles that comply with such standards are presumed to comply with the EU General Product Safety Directive 2001/96/EC which lays down an obligation on producers to place safe products on the market. The relevant standards are;
I.S. EN14764:2006 — city and trekking bikes,
I.S. EN14766:2006 — mountain bikes,
I.S. EN14781:2006 — racing bicycles.
More information on these matters can be accessed at http://www.nsai.ie
5. The employee will not be able to cease his or her participation in the scheme prior to the expiry of the salary sacrifice arrangement, except in cases of termination of employment. Where employment is terminated before the expiration of the salary sacrifice arrangement, the employee must pay the balance due to the Department of Education and Skills, which may be deducted from any outstanding payment due in termination of the employment. Where this is not possible, it may be then necessary for the Department of Education and Skills to recover the balance due from the employee under the terms of Circular: Pay 045/2010: Policy and Procedures for dealing with Overpayment of Salary/Allowances.
6. Participation in the scheme is limited to once in each five year period. Accordingly any person who availed of the scheme in 2010 under the terms of Circular 54/2009 cannot re-apply in 2011.
7. The scheme applies only to new bicycle/cycle safety equipment purchased from approved providers. A full list of providers is available from the OPW website:http://www.opw.ie/en/OurBusinessUnits/GovernmentSuppliesAgency/Cycle-to-WorkScheme/.
8. The payment for the bicycle/cycle safety equipment will be made to the supplier by the Department. It will be a requirement of the scheme for participating suppliers that all warranties relating to the bicycle/bicycle safety equipment will be for the benefit of the employee and all issues arising in relation to the warranties will remain between the employee and the supplier.
9. The processing of applications will only commence after the closing date for each application option At the time of purchasing the bicycle or safety equipment the supplier should be advised that payment will only issue subsequent to the closing date.
10. The employee acknowledges that the Department of Education and Skills is not responsible or liable for the security, disposal, maintenance, repair and use of the bicycle or bicycle safety equipment.
11. The Department of Education and Skills accepts no responsibility for misuse of bicycles or equipment by the employees and asserts that bicycles and bicycle safety equipment acquired by virtue of the scheme are strictly non transferable.
