Employer’s levy to increase by 200 million to help fund higher education in Ireland

The Government is seeking to increase the employer levy by 50% to help fund higher and further education and training by 2020.

At present employers currently pay €390 million a year through the National Training Fund Levy; but the government wishes to increase this annual figure by another €200 million.

The idea for the extra €200 million to be increased on the employer’s levy is enclosed in a consultation paper for a proposed Exchequer-Employer Investment Mechanism, launched by Education Minister Richard Burton and Public Expenditure Minister Paschal Donohue.

The idea for the funding to be increased through the rise in the employment levy is being implemented as part of a response to meeting the skills needs in the economy in the coming years.

The initiative also comes due to the review, carried out in the Cassells Report, of funding for Higher education which called for an extra €600 million a year by 2021 to provide a quality experience for the growing numbers of third-level students.

The levy that is obtained through the PRSI system, currently stands at 0.7 per cent or employees reckonable earnings. The report proposes to gradually increase the levy to 1 per cent in three years’ time, by the end of 2020.

In a controversial move the Cassells report also suggested that a loan scheme for students should be implemented as another way of increasing funding for the sector.

The Oireachtas Education Committee is currently assessing the Cassells Report, which will be used when Mr. Bruton considers his final decision on how to progress the funding issue.

According to ministers Bruton and Donohoe, the proposed extra €200 million from an Exchequer-Employer mechanism would not only lead to benefits for students, but would also benefit wider society.

Mr Bruton described how properly-funded higher education and further education sectors were key to delivering in areas like skills, research and disadvantage.

Mr. Bruton said, “Ireland’s capacity to deliver sustainable full employment, promote innovation and grow productivity in our economy, in the face of Brexit and other international challenges, will depend centrally on our capacity to nurture, develop, and deploy talent in our enterprises. Government and enterprise must work together if that ambition is to be realised.”

Paul Dwyer