Social Welfare and Pensions Act 2009

12.

Amendments to Act of 1979.

12.— (1) The Act of 1979 is amended—

( a) by inserting the following definitions in section 1:

“‘Act of 1997’ means the Taxes Consolidation Act 1997;

‘reckonable earnings’ means emoluments—

( a) derived from insurable employment or insurable (occupational injuries) employment within the meaning of the Social Welfare Acts, and

( b) to which Chapter 4 of Part 42 of the Act of 1997 applies, but without regard to sections 1015 to 1024 of the Act of 1997,

reduced by so much of the allowable contribution referred to in regulations 41 and 42 of the Regulations of 2001 as is deducted on payment of those emoluments;

‘reckonable emoluments’ means emoluments (other than reckonable earnings) reduced by so much of the allowable contribution referred to in regulations 41 and 42 of the Regulations of 2001 as is deducted on payment of those emoluments;

‘reckonable income’ means, in relation to an individual, the aggregate of the individual’s income from all sources for a contribution year estimated in accordance with the provisions of the Income Tax Acts, but without regard to sections 1015 to 1024 of the Act of 1997, and after—

( a) the deduction from that income of so much of the allowable contribution referred to in regulations 41 and 42 of the Regulations of 2001 as is deducted on payment of emoluments, and

( b) the deduction from that income (other than emoluments) of so much of any deduction allowed by virtue of the provisions referred to in the definition of ‘capital allowance’ in section 2(1) of the Act of 1997 as is to be deducted from or set off against that income in charging the income to income tax;

‘Regulations of 2001’ means Income Tax (Employments) (Consolidated) Regulations 2001 ( S.I. No. 559 of 2001).”,

( b) by the repeal of section 2,

( c) by inserting the following section after section 4:

Rates in respect of health contributions.

4A.— (1) For the contribution year 2009, the health contribution payable by an individual on his or her reckonable income for that contribution year shall be at the rates specified in the table to this subsection.

TABLE

Part of reckonable income

Rate of health contribution

The first €75,036

3.333%

The next €25,064

4%

The remainder

4.16%

(2) For a contribution year subsequent to the contribution year 2009 the health contribution payable by an individual on his or her reckonable income for that contribution year shall be at the rates specified in the table to this subsection.

TABLE

Part of reckonable income

Rate of health contribution

The first €75,036

4%

The remainder

5%

.”,

( d) in section 5—

(i) in subsection (1)( a) by substituting “the health contribution being calculated in accordance with the rates specified in the table referred to in section 4A(1) or 4A(2) as the case may be in respect of such reckonable earnings” for “the health contribution being calculated at the rate of two per cent of the amount of such reckonable earnings”, and

(ii) by substituting the following subsections for subsections (1A) and (1B):

“(1A) Subject to section 4A(1) as respects reckonable earnings paid in the period beginning on 1 January 2009 and ending on 30 April 2009, where the amount of the reckonable earnings exceeds—

( a) €1,925, in the case where the period in respect of which the payment concerned is made is a week, or

( b) a corresponding amount, in the case where the period in respect of which the payment concerned is made is greater or less than a week,

the health contribution payable under this section shall be calculated at the rate of—

(i) 2 per cent of €1,925 or of the corresponding amount, as the case may be, and

(ii) 2.5 per cent of the amount of the excess.

(1B) Subject to section 4A(1) as respects reckonable earnings paid on or after 1 May 2009, where the amount of the reckonable earnings exceeds—

( a) €1,443, in the case where the period in respect of which the payment concerned is made is a week, or

( b) a corresponding amount, in the case where the period in respect of which the payment concerned is made is greater or less than a week,

the health contribution payable under this section shall be calculated at the rate of—

(i) 4 per cent of €1,443 or of the corresponding amount, as the case may be, and

(ii) 5 per cent of the amount of the excess.”,

( e) in section 6—

(i) in subsection (1) by substituting “the health contribution being calculated in accordance with the rates specified in the table referred to in section 4A(1) or 4A(2) as the case may be in respect of such reckonable emoluments.” for “a health contribution shall be payable of an amount calculated at the rate of two per cent of the amount of the reckonable emoluments to which such payment relates.”, and

(ii) by substituting the following for subsections (1A) and (1B):

“(1A) Subject to section 4A(1) as respects reckonable emoluments paid in the period beginning on 1 January 2009 and ending 30 April 2009, where the amount of the reckonable emoluments exceeds—

( a) €1,925, in the case where the period in respect of which the payment concerned is made is a week, or

( b) a corresponding amount, in the case where the period in respect of which the payment concerned is made is greater or less than a week,

the health contribution payable under this section shall be calculated at the rate of—

(i) 2 per cent of €1,925 or of the corresponding amount, as the case may be, and

(ii) 2.5 per cent of the amount of the excess.

(1B) Subject to section 4A(1) as respects reckonable emoluments paid on or after 1 May 2009 where the amount of the reckonable emoluments exceeds—

( a) €1,443, in the case where the period in respect of which the payment concerned is made is a week, or

( b) a corresponding amount, in the case where the period in respect of which the payment concerned is made is greater or less than a week,

the health contribution payable under this section shall be calculated at the rate of—

(i) 4 per cent of €1,443 or of the corresponding amount, as the case may be, and

(ii) 5 per cent of the amount of the excess.”,

( f) by the repeal of section 7, and

( g) by inserting the following sections after section 7B:

“Adjustment to take account of aggregate calculations.

7C.— Notwithstanding sections 5(1A), 5(1B), 6(1A) and 6(1B), calculations made in accordance with those sections may be adjusted by an employer of an employed contributor to take account of aggregate reckonable earnings or aggregate reckonable emoluments, or both aggregate reckonable earnings and aggregate reckonable emoluments as the case may be, paid in the contribution year and the payment of the health contribution may be made in accordance with the figure achieved as a result of the calculation so adjusted.

Repayment of contributions.

7D.— (1) Where an individual’s health contribution was calculated in accordance with section 5 or 6 in respect of the contribution year 2009 and where, as a result of that calculation, the individual paid in respect of that year, an amount in excess of the rates specified in the second column in the table referred to in section 4A(1) in respect of the parts of reckonable income specified in the first column of that table, the individual shall be repaid that excess amount.

(2) Where an individual’s health contribution was calculated in accordance with section 5(1B) or 6(1B) in respect of the contribution year 2010 or any contribution year thereafter and the individual’s reckonable earnings or reckonable emoluments for the particular contribution year do not exceed €75,036, sections 5(1B) or 6(1B), as the case may be shall be construed as if “4 per cent” were substituted for “5 per cent” and any health contributions overpaid in respect of that contribution year shall be repaid to the individual.

Provision in respect of ex gratia redundancy payments.

7E.— (1) This section applies to emoluments paid to an individual in the period 1 January 2009 to 30 April 2009 in the form of any ex gratia payment made on the occasion of the redundancy of that individual, which is chargeable to tax under section 123 of the Act of 1997, in respect of which health contributions are payable in accordance with section 4A.

(2) Notwithstanding any other provision of this Act and subject to section 7A, to the extent that emoluments are emoluments to which this section applies—

( a) health contributions shall be paid in respect of those emoluments for the contribution year 2009 at the rate of—

(i) 2 per cent on the first €100,100 of such emoluments, and

(ii) 2.5 per cent on the balance,

and

( b) those emoluments shall not be reckoned in calculating relevant income for that year for any other purpose of this Act.”.

(2) References to reckonable earnings in regulations under the Act of 1979 that were in force immediately before the commencement of this section shall be construed as references to reckonable earnings within the meaning of that Act as amended by this section.

(3) References to reckonable emoluments in regulations under the Act of 1979 that were in force immediately before the commencement of this section shall be construed as references to reckonable emoluments within the meaning of that Act as amended by this section.

(4) References to reckonable income in regulations under the Act of 1979 that were in force immediately before the commencement of this section shall be construed as references to reckonable income within the meaning of that Act as amended by this section.

(5) Regulations 4, 5 and 6 of the Health Contributions Regulations 1979 (S.I. No. 107 of 1979) are revoked.

(6) This section comes into operation on 1 May 2009.