The Department of Public Expenditure & Reform has just announced a change to Civil Service mileage and subsistence rates. These changes will have a wider impact throughout the economy in setting the benchmark guide for all motor travel rates for mileage and travel expenses in the private sector.
The new motor travel rates will come into effect from 1st April 2017 and it is agreed that the rates will not change for a period of 3 years. The agreement for the new rates was between Unions and Government to devise the best standardized system of travel and subsistence across the public sector, while also having a direct effect on the private sector.
The motor travel rates distance bands have increased from two to four with a lower recoupment rate for the first 1,500 kilometres. A lower rate now applies for the first 1,500km travelled each year, and there are increased rates for cars with lower engine sizes which can benefit more fuel efficient vehicles.
The reduced rates are payable to Civil Service employees who travel when it is associated with their job but not solely related to the performance of their duties, such as:
- Attendance at confined promotion competitions
- Attendance at approved courses of education
- Attendance at courses or conferences
- Return visits home at weekends during a period of temporary transfer
The motor travel rates have seen an increase in rates for overnight stays in recognition to the increase of costs of overnight accommodation. The overnight rates have been increased to €133 and the day rates have stayed the same. However if staying in the capital, overnight stays can be more expensive so there is a maximum claim of €167 per night once you supply a receipt.
Considerations for calculating the Motor Travel Rates
The Government created a formula to revise the rates based on market research analysis such as:
- A replacement rate that assumes that an employee replaces their car every four years.
- Insurance costs based on a 35 year old civil servant, driving a Volkswagen Golf with a two year no claims bonus.
- Car cost calculated with reference to the top 10 best-selling cars
- Servicing and repair costs based on the figures given in the AA Cost of Motoring report each year
- Fuel costs
The new formula also provides a methodology that can be easily updated and adapted to new data such as changing fuel or vehicle and insurance costs. These new rates also factor in the need to encourage and promote the use of more environmentally efficient vehicles and methods of travel, as an aim to reduce carbon emissions.
Travel that has taken place in the first three months of the year from 1st January to 31st March is calculated on the old rate. The official circular is available at: http://circulars.gov.ie/pdf/circular/per/2017/05.pdf