If you are an employer in Ireland the main changes from the budget presented in the Dail in December, 2012 are summarized below.
1. Maternity Benefit Change
From January 1, 2013 maternity benefit will be taxable income (although it will be exempt from the USC (universal social charge)). This is quite a unique change as it sees the taxation of a social welfare benefit and it will be interesting to see how it operates in practice.
2. Redundancy Rebate
The statutory employer redundancy rebate will be abolished from January, 2013 also. The key date with this change is the date of dismissal: if the date of dismissal is post January 1st, 2013 there will be no rebate.
It is worth noting that the date of dismissal, according to redundancy legislation, is “the date that notice of termination of employment expires”.
3. Termination/Ex-Gratia Payments
“Top slicing relief” will no longer be available to termination/ex-gratia sums of €200,000 or more from January, 2013. (Top slicing relief is a tax relief which makes the termination more attractive to top earners.)
4. PRSI
From January 2013 employees who earn in excess of €352 per week will no longer get their PRSI free allowance.
Some of these changes can be pre-empted prior to 31st December, 2013 but clearly there is a very small window of time in which to do so.
Employers are advised to always consult an accountant and/or solicitor before making significant decisions in the areas referred to above.