Some workers could receive €100 a year under Budget 2022’s increased tax relief provision to offset domestic bills when working from home, according to official estimates.
The Minister for Finance announced on Tuesday that the Government will introduce an income tax deduction amounting to 30 per cent of the cost of vouched expenses for heat, electricity and broadband for remote workers.
The Government believes up to 400,000 people could benefit from the scheme, according to The Irish Times.
However, official estimates suggest that based on an individual working remotely for 100 days a year, paying the top rate of tax and having average utility costs, the net amount they would receive under the scheme would be about €100 a year.
Official Government estimates suggest that, up to the end of May, about 69,500 claims for the existing, lower tax relief had been lodged in respect of broadband, light and heat expenses related to working at home — equating to about €136 per claim.
Based on people working 100 days a year at home, with average annual electricity costs of €1,500, heating €1,000 and broadband €576, informed sources said that a household could claim on average €252 each year.
Assuming the claimant was paying the top rate of tax, the net benefit would be about €100.
Speaking after the Budget announcement, Tánaiste Leo Varadkar said the measure could allow people who were working remotely to make claims of a couple of hundred euro annually.
He said there was no cap on how much can be claimed, though he did not rule one out in the future. The Government projected the measure could cost €11 million in a full year.
He encouraged people to avail of the enhanced support saying there has been an “underclaim” of the existing relief.
Trade unions have warned they will be watching to see if the tax changes discourage employers from contributing towards heating and electricity costs for staff working remotely, “and instead effectively pass the responsibility on to the public exchequer”.