Pat Buckley (Cork East, Sinn Fein)
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239. To ask the Minister for Finance the way travel and subsistence payments for the construction sector, known as country money, are set; if there are discussions to increase the payments; and if he will make a statement on the matter. [53972/21]

Paschal Donohoe (Dublin Central, Fine Gael)
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I am informed by Revenue that it operates a scheme known as ‘country money’ in relation to employees in the construction sector. This arrangement is designed to reduce the administrative overhead for both employers and employees in the reimbursement of expenses of travel.

Section 114 of the Taxes Consolidation Act 1997 provides that where an employee “is necessarily obliged to incur ... expenses of travelling in the performance of the duties of that employment ... there may be deducted from the emoluments to be assessed the expenses so necessarily incurred and defrayed.”

This provision allows for reimbursement by an employer, without deduction of tax, of expenses of travel, including subsistence, necessarily incurred by an employee in the course of his or her duties.

While this may be operated on the basis of vouched expenses, for ease of administration, Revenue allows payment of certain set sums of money tax-fee to employees in the construction industry while they are assigned to sites that are remote from their place of employment.

The way travel and subsistence payment rates for the construction sector are set, is based on an employee being employed and working at a site that is located in excess of 32km from the employer’s base or headquarters. The current rates for ‘country money’ are set at a maximum of €181.68 per week for more than four days or €36.34 per day for four days or less.

Furthermore, Revenue confirmed that ‘country money’ may not be paid tax-free in the following circumstances where:

- the employer provides transport to and from the site, or

- the employer provides board and lodgings, or

- the employee is recruited to work at one site only.

The payment of ‘country money’ does not prevent an employee from making a claim for a deduction from taxable income of the actual amount of expenses necessarily incurred by them. However, in these circumstances, any amount of ‘country money’ paid or any other reimbursement of expenses by the employer is treated as additional emoluments and taxed accordingly.

The rates of ‘country money’ are agreed between Revenue and relevant construction industry and employee representative bodies. I am advised that there are no discussions to increase these payments at present.