2026-07-15

I want to raise the issue of reforming the existing tax saver commuter ticket to include shared mobility services and to recognise new work patterns like working from home, as has been proposed by several service providers. As the Minister of State knows, shared mobility is shared bikes, e-bikes and e-car share services that people can rent when they need them. It complements rather than replaces existing public transport by providing flexible transport options that connect people to destinations that fixed public transport routes simply cannot reach. The first mile and last mile of any journey are as important as the middle. We know there are people who would like to get public transport to work but the time it takes them to get from their house to the bus stop or station at either end of the commute can act as a disincentive. For many commuters, shared mobility provides that vital last-mile connection between the bus stop or train station and their home or work. For others, it offers a full-on, sustainable alternative to owning a private car for journeys that would otherwise have to be made by car. The potential is significant. Commercial bike sharing services last year delivered more than 600,000 journeys, while car sharing services facilitated over 500,000 journeys last year. These numbers are expected to grow substantially, with estimates suggesting that expanding car sharing alone could take demand for 300,000 private cars off our roads completely. The national policy statement on shared mobility was published last year. It highlights the OECD findings that shared mobility has enormous potential to reduce carbon emissions and support more sustainable travel, an ambition that we all support. However, the potential will only be realised if the sector receives the policy support that it needs. There are businesses operating on low-margin, high-cost models. We have already seen providers like TIER & Dott withdraw bike sharing services from Irish towns and cities, including Limerick and Navan, while Driveyou exited the Dublin car share market. If we fail to act, we risk further market failure and losing services that are essential to a more sustainable transport network. Last year, the national policy statement on shared mobility policy referenced the potential of introducing a shared mobility voucher but I understand the sector has recently been told that the option of a voucher is now off the table. If this is the case, there is another practical and achievable solution, and that is modernising the existing tax saver scheme. Quite simply, the existing tax saver model is no longer meeting the needs of today’s commuters. Participation has fallen dramatically. In 2019, there were about 60,000 users and that has fallen to 25,000 today. While initiatives like the 90-minute fare in Dublin have undoubtedly played a role, they do not fully explain this decline. The reality is that the tax saver model is built around an outdated model of commuting. It works best for people with fixed travel patterns and convenient access to traditional public transport, but we know that nowadays many workers split time between working from home and the workplace, and they rely on a combination of transport options to complete their journey. However, the tax saver scheme completely excludes shared bikes, car share services and other sustainable transport models, and it is not providing the incentive for a genuinely multi-modal travel model. It also remains very much focused on Dublin transport patterns. If we are serious about encouraging sustainable travel, the tax saver scheme must evolve. It needs to become more flexible, more inclusive and more reflective of how people travel today. As a first step, I ask that the Minister for Finance directs officials in his Department to undertake a review of the tax saver scheme.

I thank the Deputy for his heartfelt contribution. The proposal is to reform the tax saver commuter ticket scheme to include private shared mobility services. As somebody from a rural area where we totally rely on bus services, it sounds like a novel thing to have the shared mobility model of bikes, cars and all the rest. It is way beyond what we experience in more rural parts, but it is wonderful to hear about it from the Deputy. The key objective is to ensure and encourage behavioural change in favour of the usage of shared mobility services and would support integrated transport services like bike, scooter and car-sharing through a virtual tax saver account model. The core objective is to encourage a shift in usage towards shared modes of transport in place of less efficient, congestion-inducing and carbon-intensive private car use, particularly for frequent journeys such as commuting. However, I take the Deputy’s point that the existing architecture of the scheme is for reliable, constant and regular transport rather than the patterns that most people have, which are a bit more flexible, particularly with working from home. As the Deputy is aware, commuting employees currently have access to reliefs from benefit-in-kind, BIK, in respect of sustainable transport, namely the cycle to work scheme under section 118(5G) Taxes Consolidation Act 1999 and the tax saver scheme under section 118(5A) of the same Act. The schemes have similar objectives - to reduce car dependency and to encourage the use of public transport and cycling as more sustainable forms of commuting. What is being proposed is the introduction of a new scheme that would allow employees to choose to assign part of their salary to pay for shared mobility services. Specifically, the sacrificed pay could be transferred to a virtual card account operated by an approved third-party commercial provider. Under this proposal, the sacrificed pay would not be subject to PAYE, USC or PRSI, while employers would benefit from reductions in employer PRSI. The actual operation of the ticketing wallet would be appropriate to the Department of Transport but there may be limitations in terms of what the current ticketing system, primarily Leap, can support. Subject to meeting the conditions of the scheme, there is currently no impediment to employers who wish to provide a voucher in respect of a shared mobility service to an employee under the small benefit exemption. The current threshold for this scheme is €1,500 per annum per employee. It is for each employer to decide whether to utilise this provision. The existing schemes are implemented as tax-exempt benefit-in-kind in order to keep the implementation as simple as possible and to reduce the administrative burden on employers and employees. The schemes are designed to be as straightforward as possible to encourage uptake by employers. The proposed model is more complex than the existing scheme and is something that would require engagement with stakeholders, including employers, software providers and transport operators. It is important to note that employers are not required to take part in the tax saver or bike-to-work schemes. Where an individual's employer does not participate in the schemes, any benefits that could arise under the relevant scheme will not be available to any employees of that employer. This means that an individual cannot avail of the scheme if their employer has chosen not to participate. However, it should be noted that if an employer does choose to participate in the schemes, employer’s PRSI is not payable on the cost of the relevant benefits when they make the associated deduction from their employees’ salary payments. Thus, there is an incentive for employers to participate in these schemes.

I think we can all agree that commuting patterns have changed a lot since the Covid-19 pandemic and that idea of the rigid, five-day, ten-journey commute along the same route every day has disappeared for many workers. The tax saver scheme needs to change to reflect that new reality. Commuters want something that is more flexible, to reflect the fact that they are commuting in less regular patterns, but also to reflect the increased desire for multi-modal journeys. The idea of a flexible tax saver ticket that includes shared mobility is one that is worth exploring for these reasons. In the context of the forthcoming budget, I ask that the Department of Finance seriously look at reviewing the scheme and design a pilot programme to see how this type of flexible ticket might work in practice. As the Minister of State discussed earlier, it could be achieved through a digital wallet that allows commuters to assign a certain portion of their gross pre-tax income each month, which they could then use to purchase passes for different transport services on a flexible basis, depending on what modalities they needed and what particular days they need it for. It would require some additional digital infrastructure and planning, but it would achieve a lot of flexibility that the current system does not achieve. That is why I am proposing a pilot programme. I am not suggesting that we roll it out immediately, but a pilot programme would be the perfect way to explore how this might function and test the system before we undertake a full roll-out. I ask the Minister of State to bring this to the Department of Finance and her Government colleagues because we are losing people from the tax saver scheme at a dramatic rate and we have to do something dramatic to halt that.

I appreciate the sentiment of the Deputy's contribution and I do not disagree with any of it. Particularly when we look at digitalisation and the travel wallet, all of that should be considered. I will re-emphasise to the Minister for Finance and the Minister for Transport to perhaps look at this as a pilot programme. In considering proposals in respect of all tax expenditures, the Government must be mindful of the public finances and the many demands on the Exchequer. Tax reliefs, no matter how worthwhile in themselves, lead to a narrowing of the tax base and a strong and convincing case for the benefits and outcomes needs to be articulated and due consideration given to the commitment of scarce taxpayer resources for such reliefs. To be fair, the Deputy made that argument strongly. While the conditionality around the BIK exemption for the tax saver scheme falls under the Tánaiste’s remit as Minister for Finance, the scope and conditions of the travel passes on offer are a matter for the individual transport providers. As with all tax policy measures, the tax saver scheme is kept under review by Department of Finance officials. It is particularly important in considering proposals in respect of tax expenditures that the Government is mindful of the public finances and the many demands on the Exchequer. The expansion of any scheme creates a cost and that cost must be recovered elsewhere. At present, there are no specific plans to amend the tax legislation in respect of the tax saver scheme, which is considered to be operating well. The Programme for Government: Securing Ireland's Future contains a commitment to, within the lifetime of this Government, conduct a review of the bike-to-work scheme to boost take-up among all workers. The Minister’s Department has engaged with officials in the Department of Transport in recent months in relation to this review and the terms of reference remain under consideration. I again thank the Deputy and will pass on his heartfelt sentiments to both Ministers in relation to a pilot programme for consideration.