Tax refund scheme favours more affluent schools

Monday 03 February 2014 21.58
The tax refund scheme favours schools that get large voluntary contributions from parents
The tax refund scheme favours schools that get large voluntary contributions from parents

Eight of Ireland's most affluent schools received an average of almost €50,000 in additional funding each from the State in 2012.

The funding was a result of a tax refund scheme that favours schools that get large voluntary contributions from parents.

Data given to RTÉ News by the Revenue Commissioners shows that the State distributed an additional €1.4m among 140 schools under the scheme.

The special tax break allows schools to claim money back on any voluntary contributions worth more than €250.

For every €250 received, Revenue gives a top-up of up to €173.

In 2012, the latest year for which figures are available, one school received an additional €72,500 from the State as a result.

This was based on voluntary contributions totalling €116,000 that it received during the year.

Of the top eight schools to benefit from the scheme, seven were in Dublin.

The Revenue Commissioners did not identify the schools because of the right of taxpayers to confidentiality.

These figures relate only to voluntary contributions paid by parents and others who are in the PAYE tax system.

The real amount that schools receive could be more than double that. 

The Department of Finance estimates that schools could be getting even more money in contributions from people who are self-employed.

However, the Revenue Commissioners did not compile data on donations from that source.

Under the scheme, schools are treated as charities and so they are allowed to claim tax back on donations.

The measure was introduced in the 1990s by Minister for Education Ruairi Quinn, who was then minister for finance.

These latest figures show a reduction in the number of schools benefiting under the scheme, with 140 schools in 2012 compared to 171 in 2011.

They shared €1.4m in additional payments from the State.

But €1.9m was distributed in the previous year. This is most likely due to a drop in the number of parents able or willing to make voluntary contributions of €250 or more.

In submissions to Revenue, education bodies have argued that the scheme should also be applicable to donations of under €250.

Schools typically use the money raised to buy computers and other equipment or to refurbish or extend school properties.

Rules for the scheme stipulate that the voluntary contribution must not confer a benefit on the donor, or on any person connected with the donor.

The Department of Finance has changed the way the scheme operates for 2013 and future years.

Education bodies have told the department they fear the changes will lead to a reduction in donations received by schools.

TUI wants scheme scrapped

The Teachers' Union of Ireland has called for the scrapping of the scheme.

Secretary General John MacGabhann said the union did not have an issue with parents or others giving financial donations to schools.

However, he said it did have an issue with the State conferring further advantage through the tax code on schools that received large donations.

Elsewhere the Vice-Chair of the Dáil's Education Committee said the scheme is out-dated and should be discontinued.

Labour TD Aodhán Ó Ríordáin said any scheme from the Department of Finance that disproportionately benefited schools with parents of greater means was clearly unfair and must be immediately scrapped.

Mr Ó Ríordáin said all State support for schools should be focused on areas of the education system that are in greatest need.

However, Mr Quinn told RTÉ News he felt the scheme should continue.