The Minister for Social Protection announced recently that the employee PRSI charge will apply to all share-based remuneration from 2012. The Minister also announced that employers should cease deducting and remitting employer PRSI on share-based remuneration with immediate effect.

As reported in March this year, the Minister for Finance issued a notice earlier this year stating that the charge to PRSI on share awards, as introduced by Finance Act 2011, would not apply where the share-based remuneration was the subject of a written agreement entered into before 1 January 2011. However, this is no longer the case, and as the Minister for Social Protection announced, regardless of when share-based remuneration agreements were entered into, the employee PRSI charge will apply in all cases with effect from 1 January 2012.

Members should also note that the employer element of PRSI on share-based remuneration was abolished as part of the Government's Jobs Initiative announced in May this year. Where employers have paid PRSI on share-based remuneration in 2011, a refund of this PRSI paid can be claimed by way of an offset against current PRSI liabilities through the monthly P30/end of year P35 returns.

The necessary legislation to give effect to these changes is expected to be included in the next Social Welfare Bill.

The full statement which issued from the Minister for Social Protection was published on the Department's website www.welfare.ie.