Former Levies to Fund
The National Training Fund Act, 2000 provided for the repeal of previous levies on employers under the Industrial Training Acts. The legislation repealed the Industrial Training Act and the Industrial Apprenticeship Levy Acts 1967 and 1994.
The 2000 Act established a National Training Fund and provided for a new associate levy. The Fund finances a range of schemes aimed at raising the skills of those in employment and at providing training to those who wish to acquire skills for the purpose of taking up employment.
The Act provides for the payment by employers of a levy equal to 0.7% on reckonable earnings under social welfare legislation for Class A and Class H employment. The cost of levy, when introduced was offset by a comparable cut in employers PRSI. The levy is, in effect, incorporated into the employer’s PRSI.
The National Training Fund is used to finance approved schemes. It was administered at first, by the Minister for Enterprise, Trade and Employment and latterly by the Minister for Education and Skills. Monies not required to meet current expenditure are transferred to the investment account and may be transferred back to the current account as required.
The Fund is managed by the Minister for the Finance. The Exchequer may make contributions to the Fund in order to cover shortfalls in income. The accounts of the Fund are examined by the Comptroller and Auditor General and are laid before the Houses of the Oireachtas.
The rate of charge of the Fund is 0.7% of reckonable earnings of relevant employees. This is subject to ceilings applicable, from time to time on employers PRSI. Employers who are exempt under social welfare legislation from paying PRSI, are not liable to pay the levy in respect of that employee’s earnings.
When the fund was established, sums were transferred from the Social Insurance Fund into the fund. Funds in the former levy grant scheme under the Industrial Training Act were also transferred.
Payments may be made from the Fund for schemes which designed to raise of skills of those in employment or to provide training to those who wish to acquire skills for the purpose of taking up employment. The Minister for Education and Skill determines the schemes which receive funding and with the consent of the Minister for Finance, the amounts to be allocated.
The Social Partners had a role to play in allocation of the NTF and are consulted by the government on allocation of NTF funds for training programmes. The government-sponsored, the Expert Group on Future Skill Needs, is the forum used to fulfil this requirement
Department of Education and Skills decides training support policies and allocation of NTF funds to different agencies/programmes. Then, typically, a system of annual calls and competing proposals from companies/groups of companies is applied.
NTF’s financial resources are used by various government departments and agencies:
- Department of Education and Science (Back to education initiative – for second-chance education, Vocational training opportunities scheme – for unemployed trainees; Department of Employment and Enterprise (Company training grants);
- Solas formerly FÁS – National Employment and Training Authority (One step up initiative – for low-skilled an vulnerable workers in SMEs, Technical employment support grants – for unemployed jobseekers; Skillsnets Limited (Skillsnets training networks programme (TNP);
- Enterprise Ireland (support for in-company management training in manufacturing and internationally-traded service sector); the Industrial Development Authority (training and development activities for new overseas industries in manufacturing and internationally-traded services);
- Tourism Ireland (Short and longer term tourism skills development)
Funds may be used to provide direct supply-side funding of education and training providers/institutions or demand-side financing (such as subsidies to companies to support training provided/financed by employers). Some programme initiatives require financing from beneficiary (Skillsnets TNP) eligible group employed, unemployed, job seekers (depending on the programme/initiative)
Programmes/initiatives designed for supporting training in companies often target micro-companies and SMEs. The type of education and training eligible depends on the programme/initiative.
The Revenue Commissioners may supply to any person having obligations in relation to the collection and administration of the levy, information regarding reckonable earnings in respect of which the levy is payable. This may be done in so far as the supply of information is necessary for the administration of the legislation.
The Revenue Commissioners may accordingly supply information on earnings in respect of Class A and H employments to the Department of Social Community and Family Affairs.
There are provisions for the inspections of records. There are preferential status for the levy in the event of winding up and bankruptcy of parties who are liable to pay.