Sections 472A and 88A of the Taxes Consolidation Act 1997 provide tax incentives for both employers and employees, to help the long-term unemployed to return to employment. The relief under Section 472A, known as the Revenue Job Assist scheme, allows qualifying employees, in addition to their normal tax credits, to claim certain income deductions, including additional deductions for qualifying children, for the three year period after taking up employment.
Section 88A provides an associated tax incentive for employers. Employers may claim a double deduction in computing the profits of the trade or profession in respect of the first 3 years wages paid to qualifying employees. This double deduction may also be claimed in respect of the employers PRSI contribution on such wages.
For example, if an employer provided employment to an individual earning €20,000, the employers PRSI would amount to €2,150. When computing the profits for corporation tax purposes, the employer can deduct double the amount of salary and employers PRSI paid in respect of that individual, i.e. an additional €22,150, which would result in a reduced liability to corporation tax saving the company €2,768.75 per annum.
Both incentives apply in respect of individuals who have been unemployed for at least 12 months and are in receipt of a specified social protection payment or who are in a category approved for the purposes of the scheme by the Minister for Social Protection with the consent of the Minister for Finance.
The latest year for which information is available on the take-up of the scheme is for 2009, when 200 employers and 390 employees participated, at a cost to the Exchequer of €0.3 million. Full details of the scheme for employees can be found in Revenue leaflet IT58 and for employers in Revenue leaflet IT59. These leaflets, along with a recently published guide entitled Supporting Job Creation — Tax reliefs, deductions and exemptions, are available on the Revenue Commissioners website at http://www.revenue.ie.
In addition, the Department of Social Protection provides for the Employer Job (PRSI) Incentive Scheme. Under this scheme, if an employer takes on an additional member of staff in 2012 that has been unemployed for 6 months or more, an exemption from employers' PRSI for 18 months is available. Primary responsibility for this incentive rests with the Minister for Social Protection.