COMMITTEE OF PUBLIC ACCOUNTS debate -
Thursday, 8 May 2008

Private Residential Tenancies Board Accounts 2004-06.

Ms Josephine Feehily (Chairman, Revenue Commissioners) and Ms Bernadette Lacey (Secretary General, Department of Social and Family Affairs) called and examined.

Chairman

Today, the committee will examine the 2006 Annual Report of the Comptroller and Auditor General and Appropriation Accounts, chapter 3.10 - Aspects of Rental Taxation (Resumed), and the Private Residential Tenancies Board Accounts 2004-06.

I remind witnesses that they do not enjoy absolute privilege. Members and witnesses attention is drawn to the fact that as and from 2 August 1998, section 10 of the Committees of the Houses of the Oireachtas (Compellability, Privileges and Immunities of Witnesses) Act 1997 grants certain rights to persons who are identified in the course of the committee's proceedings. These rights include: the right to give evidence; the right to produce or send documents to the committee; the right to appear before the committee either in person or through a representative; the right to make a written and oral submission; the right to request the committee to direct the attendance of witnesses and the production of documents; and the right to cross-examine witnesses. For the most part, these rights may only be exercised with the consent of the committee.

Any persons identified in the course of proceedings who are not present may have to be made aware of these rights and provided with a transcript of the relevant part of the committee's proceedings, if the committee considers it appropriate in the interests of justice. Notwithstanding this provision in the legislation, I remind members of the long-standing parliamentary practice to the effect that they should not comment on, criticise or make charges against a person outside the House or an official, either by name or in such a way as to make him or her identifiable. Members are also reminded of the provisions within Standing Order 158 that the committee shall also refrain from inquiring into the merits of a policy or policies of the Government or a Minister of the Government or the merits of the objectives of such policies.

I welcome Ms Josephine Feehily, Chairman of the Revenue Commissioners. I congratulate Ms Feehily on her appointment to that position and wish her well in her endeavours on behalf of the country. I ask Ms Feehily to introduce the officials accompanying her this morning.

Ms Josephine Feehily

Thank you, Chairman. With me is Mr. Norman Gillanders, who is the head of our operations policy and evaluation division. Also here is Mr. Paddy O'Shaughnessy, who is our liaison manager with the Committee of Public Accounts. Our senior press officer, Mr. Dave Coleman, is in the Gallery. I have discovered that I am something of a novelty where the media is concerned. Members of the media tend to appear whenever I am speaking, which is why the press officer is here.

Chairman

They will be running away from you soon.

Ms Josephine Feehily

Yes, I am sure the interest will wear off.

Before the meeting began, I asked Mr. O'Shaughnessy if he thought it would be appropriate for me to say a few words on the role of the Comptroller and Auditor General and our relationship with his office. However, when Deputy Seán Fleming said that we should not be friends, I had my doubts. I will simply say that we both work from Dublin Castle and have a very professional relationship, which definitely has its tensions. I appreciate fully the independence of the Comptroller and Auditor General's office. We too have independence issues. The role of the Comptroller and Auditor General is enormously important from the point of view of Accounting Officers. As I am here in that capacity today, I just thought I would make a brief comment on the matter.

I have a very short opening statement--

Chairman

Before Ms Feehily begins, I wish to also welcome Ms Bernadette Lacey, Secretary General of the Department of Social and Family Affairs, and ask her to introduce her officials.

Ms Bernadette Lacey

I am accompanied by Mr. Brian Ó Raghallaigh, who is the assistant director general with responsibility for rent supplements and supplementary welfare payments.

Chairman

We are also joined by officials from the Department of the Environment, Heritage and Local Government.

Mr. Denis Conlan

I am principal officer in the housing division of the Department. I am joined by Mr. Liam Gleeson, assistant principal officer in the private housing section.

Chairman

Thank you. I also welcomeMs Margaret Taheny-Moore, director of the Private Residential Tenancies Board. I ask her to introduce her officials.

Ms Margaret Taheny-Moore

With me is Ms Kathryn Ward, assistant director and head of the disputes section of the PRTB. On my left is Ms Carmel Diskin, who is a higher executive officer in charge of enforcement of registrations.

Chairman

We are also joined by officials from the Department of Finance.

Mr. Paddy Barry

I am from the tax and financial services division of the Department.

Chairman

You are on your own?

Mr. Paddy Barry

Yes, I am on my own.

Chairman

I ask the Comptroller and Auditor General to introduce chapter 3.10 - Aspects of Rental Taxation and the Private Residential Tenancies Board accounts for the years 2004 to 2006. The full text of the chapter can be found in the annual report of the Comptroller and Auditor General or on the website of the Comptroller and Auditor General at www.audgen.gov.ie.

Mr. John Purcell

Thank you, chairman. As I see it, there are three issues arising from today's agenda. First, the transfer and use of information on rent supplements and other rental payments by the State for tax computation purposes; second, the qualified audit reports on the 2004 and 2005 accounts of the PRTB; and third, the funding of the board's activities.

In Chapter 3.10 of my 2006 report, I drew attention to operational difficulties being encountered in maximising the benefit of information being provided to the Revenue Commissioners on rental payments by the State. The requirement in the Finance Act of 2007 to provide the Revenue Commissioners with landlords' PPS numbers has the potential to overcome some of these difficulties. However, the Department of Social and Family Affairs, in its administration of the rent supplement scheme, has a legal problem in enforcing collection of landlords' PPS numbers. An enhanced role for the PRTB in transferring information might help to get around this problem. It was clear that the committee felt there was scope for better co-ordination and collaboration between all State agencies operating in this area.

The PRTB commenced operations in September 2004 but was not geared up to deal with the volume of applications for registration received in the early stages. Approximately 40,000 applications, together with payments from landlords, were received in the first four months. This led to a situation whereby only 2,000 applications were processed by the end of 2004. As the volume of unprocessed applications grew, moneys were not lodged promptly to the bank. This, coupled with the lack of key information on the status of applications, meant that the board was unable to arrive at an appropriate income figure for the year. There was a knock-on effect in 2005 and I had to qualify my audit opinion on the accounts for that year also. I am glad to report that the problem has now been resolved and I was in a position to give a clear audit report on the 2006 accounts, earlier this year.

Members will see from the account for 2006 that the balance sheet shows the board had €8.5 million on hand at the end of the year. Under a ministerial directive dated February 2005, the board retains two sevenths of the tenancy registration charges collected towards its own operational expenses, with the remainder to be paid to local authorities to perform their inspection functions, including the vetting of the standard of rented accommodation. The Exchequer also provides direct funding to the board. The level of cash on hand suggests that the State is over-funding the board to a considerable extent and that the local authority inspection scheme is not fully bedded in.

Chairman

Thank you, Mr. Purcell.

Ms Josephine Feehily

Chairman, thank you for the opportunity to address the committee on aspects of rental income taxation. The committee examined this matter previously with my predecessor, Mr. Frank Daly. At that session, certain questions were raised on taxation of rental income and the use of third party information. I will focus on these two issues.

It may be useful to the committee to put the discussion in context. The tax system operates on a self-assessment basis, which the committee recognised on the last occasion. Rental income is one source of income received by companies and individuals and those individuals may be either in the self-assessed or PAYE system, depending on their main source of income. Revenue approaches the taxation of companies and individuals in accordance with its customer charter, which includes a presumption of honesty. In this context, people make tax returns and Revenue subjects a proportion of them to compliance checks and audits.

For several years now our strategy has been to focus our resources on the cases with the highest risk and we have been developing a risk analysis and profiling system. Information already available in Revenue and information received from third parties is crucially important for the effectiveness of this approach to compliance. The strategy is that high risk cases are then considered by auditors who select the cases to be audited with the objective of leaving compliant taxpayers alone.

In the context of assessing the risks regarding rental income taxation, there are various sources of information available to us, including information on property acquisitions from stamp duty data, private tenants tax credit data, information from the Department of Social and Family Affairs, to the extent that we can match it to a PPS number - and I will return to this issue in a few moments - and information on the rental accommodation scheme.

Another recent development in Revenue is the pursuit of sectoral projects. The committee will be familiar with the construction industry project which yielded approximately €300 million between 2006 and 2007, but many other sectoral projects are carried out by Revenue regions and districts and the results are shared across the organisation. Regarding these sectoral projects, while Revenue does not have a classification of "landlord" as such, there is a category of taxpayers who have identified themselves or their businesses as primarily engaged in the letting of property. The committee may be interested in some indicators of compliance in that sector.

In 2006, we audited approximately 500 such taxpayers and collected tax, interest and penalties of some €4.7 million. In one of the sectoral projects I mentioned Revenue carried out a local targeted review of 30 cases in the Wicklow district and found a compliance rate of 94%. We looked at the 50 highest value cases using the data received from the Department of Social and Family Affairs which matched our own and found that 41 were compliant and three owed us money. A further six have been asked for more information. Therefore, the compliance rate is at least 82% and probably higher. As an exercise, we manually matched and examined a further 115 cases, again focusing on the largest values. Of these, 102 were compliant. We are working through the remaining cases. This means there is a compliance rate of at least 89%. These are just examples. Rental income can arise in any sector and with any taxpayer, including shopkeepers and PAYE taxpayers. I am confident that there were many other compliance interventions which successfully identified and taxed rental income but did not classify it as such.

There are many motivators in the tax system to support compliance. Principally, a range of valuable tax reliefs are available which can be offset against gross income. Other motivators include: the rent a room scheme, for which the limit is now €10,000 a year; the private tenant's tax credit; the need for a tax clearance certificate for the rental accommodation scheme; and the fact that there is heightened awareness of information sharing among the relevant public bodies. As Mr. Daly indicated to the committee, data based on PPS numbers are hugely valuable to us. To this end, we have been working with the Department of Social and Family Affairs in the past two years. I am satisfied that we will begin receiving information from the Department, with PPS numbers where possible, before the end of this year. This represents very significant progress. Where a landlord declines or fails to give a PPS number to the Department, we will regard this as a risk factor for our compliance programme.

It is clear, as the Comptroller and Auditor General pointed out, that information sharing between ourselves and the Private Residential Tenancies Board could be enhanced with stronger legislation. We are developing proposals in that regard. In the meantime we are receiving full co-operation and information on a case by case basis, as provided for in legislation.

The Comptroller and Auditor General also referred to the importance of data matching. Obviously, automated matching is the most efficient method and, while there are some obstacles to this, we are getting better at it. We have now matched about 65%, excluding agent cases, of the 2006 rent supplement information from the Department of Social and Family Affairs. It is important to emphasise that information which is not matched is not lost - it is available to auditors in our business intelligence database.

Chairman

May we publish Ms Feehily's report?

Ms Josephine Feehily

Yes.

Chairman

I ask Ms Taheny-Moore to make her opening statement on behalf of the PRTB.

Ms Margaret Taheny-Moore

I welcome the opportunity to appear before the committee to give evidence on the financial statements of the Private Residential Tenancies Board for the financial years ending 31 December 2004, 2005 and 2006. The Private Residential Tenancies Board has been in operation for just over three and a half years. Its activities have evolved significantly since its establishment and the demands on it have been greater than expected. Its staffing structure increased from eight posts, when an ad hoc board was in operation prior to its establishment on 1 September 2004, to 26 in 2005. Recently, sanction was received to increase levels by a further 14 permanent posts, which will bring the total staffing complement to 40. In addition, a significant amount of our data input is carried out by agency staff and the numbers involved have varied depending on necessity in recent years.

The PRTB receives Exchequer funding from the Department of the Environment, Heritage and Local Government. The grant amounted to €154,000 in 2004, €1.703 million in 2005, €2.974 million in 2006 and €5.74 million in 2007. The 2008 allocation is €4.644 million. The main reason for the increase in 2007 was the relocation of the board's offices to O'Connell Bridge House in D'Olier Street. The board is also in receipt of registration fee income which amounts to €70 per tenancy if registered within one month of commencement of the tenancy or €140 if the application is late. A fee of €25 applies to dispute resolution applications, while a fee of €40 is payable in the event of an appeal against the board's determination order.

Reflecting the unprecedented growth in the private rented sector, the system of tenancy registration has been very successful, with almost 218,000 tenancies registered, which is representative of almost 99,000 landlords and over 360,000 tenants. This significant success in the area of registration has resulted in an increase in the level of registration fee income from €153,000 in 2004 to €4.9 million in 2005, almost €6 million in 2006 and in excess of €6 million in 2007. Under statutory direction, five sevenths of the registration fee income is allocated to fund local authority functions relating to the private rental sector. The manner in which this money is transferred and the timing of such payments are in accordance with directions from the Minister, having regard to relevant considerations, including the total amount available for distribution, the level of tenancy registrations in different local authority areas, the level of activity undertaken by each local authority in the performance of its functions under the standard regulations and the need to maintain consistency from year to year in the provision of such funding. The balance of the registration fees, two sevenths of the total, is retained by the PRTB to defray the expenses of the board in the administration of its functions. While the board has not used any portion of the fee income towards its administrative costs to date, it is expected that in excess of €2 million will be used this year for the implementation of an ICT strategy and additional staffing.

The operation of a landlord and tenant disputes resolution service is the core function of the PRTB. This is a quasi-judicial function in which the PRTB has taken the place of the courts. The demand on the disputes resolution service has risen significantly from almost 900 applications in 2005, to 1,300 applications in 2006, over 1,500 in 2007 and over 420 already this year. Taken in the context of the number of tenancies registered, the level of complaints is less than 2%. While a number of applications are subsequently resolved or withdrawn, the number of valid cases was close to 2,800 at the end of last year. In addition, the number of requests for tribunals increased from 37 in 2005 to 98 in 2006 and 155 in 2007.

Since its inception the board has made determination orders in over 1,000 cases and a further 500 cases are at an advanced stage of processing. While acknowledging that there are delays, the board is reviewing its processes and procedures with a view to reducing processing times and providing a more efficient service. Consultants have commenced work on the development of an ICT strategy which will deliver an integrated data management system that will meet all of the PRTB's current and future business requirements. The board is also finalising its review of the 2004 Act and has identified legislative amendments that will simplify the process and assist its general operation.

In accordance with the provisions of sections 146(2) and (4) of the Residential Tenancies Act 2004, the board receives data from the Department of Social and Family Affairs on dwellings where the tenants are in receipt of rent supplement. The board is in a position to cross-check this information with its database and issue enforcement notices where the landlords are not registered. It has also provided the Department with information on rent levels which assists that Department in reviewing its rent thresholds for rent supplement. Also, in accordance with the provisions of section 148(2)(b) of the 2004 Act, the board has provided details for the Revenue Commissioners on tenancies registered. This information is provided on the basis of a request being made and Revenue furnishing details of the landlord’s PPS number or the name of the landlord and the PPS of the landlord’s agent. The information provided relates to confirmation as to whether the landlord has registered a tenancy and, in the event of there being one or more tenancies registered, particulars in respect of them as the Revenue Commissioners may require.

The PRTB uses information from other sources, including public representatives, tenants who have taken cases to the board, the general public and local authorities, to identify non-registered landlords. To date, the board has issued over 6,000 enforcement notices to landlords for failing to register a tenancy and it will continue to pursue and prosecute those landlords who have not registered. The penalties for not registering a tenancy are a fine of up to €3,000 or imprisonment for up to six months or both. In December 2007 the board was successful in its first case taken against a landlord for failing to register. The landlord was fined €1,500 in the Dublin District Court. A further 150 legal warning letters have issued and files are being prepared to advance against those who have not responded.

In the disputes area where a determination order of the board is not complied with, it is open to either party to the complaint or the PRTB to seek enforcement of the order through the courts. In practice, the vast majority of enforcement actions are taken by the PRTB. The board has been successful in enforcing its orders through the courts. To date, legal proceedings have been taken in almost 130 cases, 27 of which were section 124 prosecutions in respect of direct compliance with an order, of which 20 have been upheld by the courts, while seven remain to be processed. Three of the court orders were for repossession of the dwelling. The remaining 100 cases sought criminal convictions under section 126 of the Residential Tenancies Act, 50 of which were subsequently settled in advance of a court hearing and in 30 of which convictions were obtained. In most of these cases costs plus fines were awarded to the PRTB. Of the nine judicial review proceedings taken against the PRTB, five have been completed and decisions were in favour of the board.

The board has engaged the Centre for Housing Research to manage its research projects. The most recent study undertaken was an international review of dispute resolution mechanisms in regard to deposit retention and third party complaints of anti-social behaviour in the private residential tenancy sector. Submissions on the consultant's report on the study were invited towards the end of last year and the board is examining a review of the submissions received.

An analysis of the 2005 and 2006 determination orders of the board was also carried out and will shortly be available. The board plans to publish this year a rental index based on the rent information it receives through the tenancy registration process.

Chairman

May we publish the statement?

Ms Margaret Taheny-Moore

Yes.

Deputy Pádraic McCormack

The Comptroller and Auditor General's 2005 report on the investigation of the Department of Social and Family Affairs by the Revenue Commissioners contained 92,000 records. It appears Revenue could match only 47% of these records, involving a figure of €192 million in rent subsidy payments. What improvement has there been in Revenue data matching for the years 2006 and 2007?

Ms Josephine Feehily

Our matching rate since has increased to 65%. I am not sure what this represents in rent supplement payments. My colleague may have the figure.

The committee may be interested to know that the next best element for matching is telephone numbers. We have now matched 65% of the records.

Deputy Pádraic McCormack

Is the Accounting Officer happy with Revenue having matched only 55% of records in 2006 and 2007? If not, what is being done to address this?

Ms Josephine Feehily

Sorry, Deputy, the figure is 65%.

Deputy Pádraic McCormack

A little better.

Ms Josephine Feehily

I am happier than I was when it was 41%. This relates to a set of data which contains a great detail of information. Working through PPSNs, names and addresses and telephone numbers, we are making progress. We will, when we begin to receive PPS numbers from the Department of Social and Family Affairs later this year, be able to go back and cross-reference the balance to ensure greater matching. We have not stopped working on this. There is in place a project to work through this data. I am satisfied with the progress being made. As Mr. Daly stated the last day, the key to complete success is obtaining the data with PPS numbers.

Deputy Pádraic McCormack

That leads me to my second question. Analysis of the files identified 24% of records without proper landlord PPS numbers. If landlords are required to show local authorities that they are tax compliant, why were PPS numbers wrong or not included in 24% of cases? As I understand it, landlords are obliged to provide a tax clearance certificate to show they are tax compliant.

Ms Josephine Feehily

There are two issues. Under the rental accommodation scheme, landlords are required to produce a tax clearance certificate to the Department of the Environment, Heritage and Local Government and local authorities, although I am not sure how the scheme works. Initial problems in the exchange of data in this respect have been solved. Under the scheme of the Department of Social and Family Affairs, there is no requirement for landlords to produce a tax clearance certificate.

Deputy Pádraic McCormack

Has Revenue sought legislative changes to allow it to access the PRTB database?

Ms Josephine Feehily

As I mentioned, we are developing proposals in that regard which will be submitted to our colleagues in the Department of Finance.

Deputy Pádraic McCormack

How many requests have been made?

Ms Josephine Feehily

This year we have made 12 requests for information in respect of 52 cases. We need only request that information at the time of audit, namely, where we are seeking verification of certain matters.

Deputy Pádraic McCormack

My next question is directed at the HSE. Does it cease making payments when it discovers a landlord has not registered his or her property with the Private Residential Tenancies Board?

Chairman

Is this question directed at the representatives from the Department of Social and Family Affairs?

Deputy Pádraic McCormack

Yes.

Ms Bernadette Lacey

No, because we have not received information from the PRTB.

Deputy Pádraic McCormack

Was payment withheld in respect of serious anti-social behaviour on the part of tenants? For example, a person who is tenant of a local authority and engages in serious anti-social behaviour can be evicted from a house. Can rent supplement be withheld in respect of serious anti-social behaviour on the part of tenants?

Ms Bernadette Lacey

No. There is no legislative basis for withholding payment of rent supplement. The issue of anti-social behaviour is one for the dispute resolution board under the PRTB.

Deputy Pádraic McCormack

Anti-social behaviour is also a matter for the neighbours who must endure it. They have no recourse to the landlord who simply ignores them because he or she continues to receive rent every week. If rent supplement was withheld for a couple of weeks, the landlord might not be long in sorting out the problem. It is a weakness of the system that the HSE cannot withhold payments of rent supplement when tenants engage in serious anti-social behaviour. I have personal experience of this. I represent Galway city and it appears nobody can do anything about the people concerned. The HSE which pays out the money cannot do anything about them because there is no legislation in place to allow them to do so.

Ms Bernadette Lacey

There is no legislative basis by which it can be done. Such matters should be addressed through the local authorities and the PRTB.

Deputy Pádraic McCormack

No, local authorities do not deal with anti-social behaviour in private rented houses.

Ms Bernadette Lacey

There is no legislative provision which allows us to withhold payments of rent supplement in such circumstances.

Deputy Pádraic McCormack

Has legislative support been sought?

Ms Bernadette Lacey

No.

Chairman

An individual called to my constituency office last Friday to request that I or one of my staff fill in an application form for rent supplement. I noted that while the form requested information such as name of agent and name and address of landlord, it did not request that the applicant include the landlord's PPS number. Is this not a major defect in a system that is supposed to operate as effectively as possible?

Ms Bernadette Lacey

I will try to explain. Rent supplement is paid to the tenant. Traditionally, we did not gather information on landlords. We were requested under legislation in the mid-1990s, by way of changes to the Finance Act, to seek the names and addresses of landlords.

Chairman

That is all.

Ms Bernadette Lacey

Yes, that was all that was asked for in the Act and that is what we asked for. We are not in a position to ask the tenant to obtain the landlord's PPS number, so the process we are now introducing is that when rent supplement is awarded to a person, the Department will write to the landlord, seeking his or her PPS number. If the landlord does not provide that information, we notify the fact to the Revenue Commissioners. As the chairman of the Revenue Commissioners has explained, Revenue will then mark that for pursuit within their own procedures.

Chairman

While I do not want to criticise policy, does the Accounting Officer see the absence of legislation which would allow the Department to seek and obtain the PPS numbers as a major defect or obstacle?

Ms Bernadette Lacey

No, I do not. The Department can pursue the matter with the individual landlord but it would not be appropriate to ask a tenant or a private individual to seek the PPS number of another person. That is our perspective on it.

Chairman

Yes, but the Department is seeking address details.

Ms Bernadette Lacey

The name and address would be commonly known but the PPS number is a different matter. It is a part of a person's identity and it would be dangerous to start asking individuals to access the PPS numbers of others.

Deputy Pádraic McCormack

In situations where the landlord does not provide the PPS number, does the Department continue to pay the rent supplement?

Ms Bernadette Lacey

I beg your pardon?

Deputy Pádraic McCormack

In the follow-up process, where the landlord fails or refuses to respond to a request for a PPS number, does the Department cease payment of the rent supplement?

Ms Bernadette Lacey

No, because there is no provision for that. I wish to correct something I said earlier. There is provision in the Housing Act to stop rent supplement in the event of anti-social behaviour. I apologise for overlooking that fact.

Deputy Pádraic McCormack

Could Ms Lacey repeat that, please?

Ms Bernadette Lacey

Within the Housing Act, there is provision for rent supplement to be stopped for anti-social behaviour, if a request is made to the Department.

Deputy Pádraic McCormack

If a request is made by whom?

Ms Bernadette Lacey

The landlord, the individuals who are being annoyed by the behaviour or local gardaí who deem the behaviour to be anti-social. I believe the provision is within the Housing Act.

Deputy Pádraic McCormack

Has there ever been a case where rent supplement has been stopped?

Ms Bernadette Lacey

No, not that I am aware of. Certainly not in recent years.

Deputy Pádraic McCormack

I am not surprised because I did my best to find out if that provision was in place and I failed.

Are the fees received by the PRTB adequate to meet the demand for and cost of local authority field staff?

Ms Margaret Taheny-Moore

Is the Deputy referring to the five sevenths of the money collected?

Deputy Pádraic McCormack

Yes.

Ms Margaret Taheny-Moore

Local authority inspections and the policy governing them is a matter for the Department of the Environment, Heritage and Local Government, so perhaps Mr. Conlan could answer that question.

Mr. Denis Conlan

Yes, the Department deals with the local authorities in this area. The statutory responsibility for inspection and enforcement of the standards regulations lies with the local authorities. It is their function and responsibility, in the first instance, to make provision for the exercise of that function. However, in tandem with the establishment of the PRTB and the introduction of the legislation in 2004, it was decided that a proportion of the registration fees which are now paid to the PRTB, which prior to its establishment were paid directly to the local authorities which operated the registration system, would be payable to the local authorities to assist them in carrying out their inspection and enforcement functions. The responsibility rests with the local authorities but the new system makes revenue available to assist them to defray their costs. The cost of carrying out inspections can vary enormously, depending on location, distances involved and so forth.

Deputy Pádraic McCormack

I might return to that issue if there is an opportunity later.

Chairman

Mr. Purcell would like to make a comment.

Mr. John Purcell

In respect of the question Deputy McCormack asked, I pointed out in my opening statement that there was a large amount of cash on hand in the PRTB at the end of 2006. At that stage, the balance sheet showed that more than €5 million had yet to be paid out to the local authorities. That suggests to me that the local authorities did not have their act fully together in respect of the desired inspection regime.

Deputy Pádraic McCormack

I see in the report that there was €5.386 million due to local authorities in 2006 and €1.9 million due on 31 December 2005. What is the balance now?

Ms Margaret Taheny-Moore

At the end of 2007, the balance was close to €7 million. However, at the end of 2007 we had paid out €5.1 million to local authorities and this week another €1.5 million was paid out.

Deputy Pádraic McCormack

Why was there a delay in paying the money to local authorities, who claim that they are always strapped for cash and under staffed?

Ms Margaret Taheny-Moore

The purpose of the money is to assist them in their inspection role and in implementing the standards required under housing legislation. The Department must consider the activity on the ground in each local authority area and the funding is based on such activity. If the inspection and enforcement activity is not high, the local authority will not get the money. Some local authorities have increased their activities in the past year or so, which is evident from the amounts of money being paid out.

Chairman

With all due respect, I am looking at the transcripts of the last hearing and Ms Kathyrn Ward, who is here this morning, stated that five sevenths of the fees received by the PRTB go to the local government fund to deal with the housing standards.

Ms Margaret Taheny-Moore

Yes.

Chairman

In response to Deputy Shortall, she went on to say that with regard to local authorities and any complaints or disputes in regard to standards, the local authorities have been excellent in carrying out the inspections and coming back to the PRTB with the appropriate reports. How could the PRTB say the local authorities were excellent in carrying out their inspections because there is no evidence of that? Like Deputy McCormack, I would like to know how they can carry out their inspections to the maximum effectiveness when they are being starved of funding which is sitting in the deposit accounts of the PRTB and not being distributed to them?

Ms Kathyrn Ward

My apologies. I obviously gave misleading information and did not clarify fully what I was talking about then. At that time I was talking about situations where, for example, we have a complaint or dispute that is referred to us by a tenant regarding standards. In that context, it would be normal practice for us to ask the relevant local authority to carry out an inspection and to furnish the board with a report on the accommodation standards, prior to us holding a dispute hearing. That report would then form part of the deliberations at such hearings. In those dispute cases, which are the ones to which I referred previously, the local authorities are very efficient and speedy in providing the reports.

Deputy Pádraic McCormack

On the 2006 balance sheet there is an accumulated excess of income of €3.22 million. What is being done with the surplus and why is the board still receiving a State subsidy? What is the purpose of that subsidy, if the board has €3.22 million of an accumulated excess over income?

Ms Margaret Taheny-Moore

The board was set up on 1 September 2004. At that time, the PRTB was staffed by staff from the Department of the Environment, Heritage and Local Government. To this day, there are still a substantial number of staff seconded from the Department working in the PRTB. We also used the resources of the Department for our accounts. It is only from the beginning of this year that we have had our own accounting system set up. We would have been funded under a Government sub-head in the Department. Much of our expenditure came from that.

Deputy Pádraic McCormack

Will that continue?

Ms Margaret Taheny-Moore

No, it will not continue in the long term. If one was to examine our expenditure, which last year was close to €5 million, the amount on hand which belongs to the PRTB was just under €5 million at the end of the 2007. The balance includes local authority money to which the PRTB has no access. We cannot use the proportion set aside for local authorities. That will eventually be paid out to the local authorities as they improve their inspection performance.

Deputy Pádraic McCormack

Is the board earning interest on the money and if so, where is it invested?

Ms Margaret Taheny-Moore

We are earning interest, which is invested with the National Treasury Management Agency. We have invested approximately €12 million with it.

Deputy Pádraic McCormack

Is that €12 million of local authority moneys?

Ms Margaret Taheny-Moore

No. It is all our money and includes registration fees. We hold money in our administration account and, as fee money comes in, we move it into the investment account.

Deputy Pádraic McCormack

When is it envisaged the State subsidy will cease?

Ms Margaret Taheny-Moore

The State subsidy is smaller this year than last because of our move to O'Connell Bridge House. As I mentioned, I expect we will use €2 million of the registration fee income this year. As we expand to 40 staff, the money will be put towards that resource.

The development of our ICT strategy will probably take between two and three years and will cost money. We are hopeful our existing database can be improved but the consultants may recommend a new system. We are very reliant on agency staff for data input, which is manual work. We hope the recommendations from the strategy will allow us to have more user-friendly IT technology to make the system faster.

Mr. Denis Conlan

I may be able to help with some of the queries in this area. The point made by the Comptroller and Auditor General on the extent to which local authorities were geared up was valid. We have to be very conscious of this, as local authority inspections were at a very low level and it would have been pointless to throw large amounts of money to local authorities which were not geared up.

We have employed a combination of a flat rate payment which we give to the local authority based on the number of registered units in its area and a further element based on its performance in the previous year. The effect has been to increase the amount of funding provided through the PRTB from €400,000 in 2004 to between €1.5 and €1.6 million in 2005, over €2 million in 2006 and €3 million in 2007. Current estimates suggest the figure will be €4 million this year. Corresponding with this has been a significant increase in the rate of inspections, from approximately 6,000 in 2005 to 9,000 in 2006 and 14,000 in 2007 with, I hope, a further increase this year. The methodology employed takes account of the extent to which local authorities are geared up and is proving successful. I hope this will continue.

The manner in which registration fees are payable is related to a tenancy, not a unit of accommodation. A tenancy under the 2004 Act is related to a cycle. Even if the tenancy is for a period of four years, the fee is only payable once. There was a strong expectation at the beginning that there would be a peak in the early stages. We considered there would be a struggle to get registrations up to a high level because, just prior to the Act coming into force in September, total registrations with local authorities were less than 24,000. Later in the year estimates were given by such organisations as Threshold of 100,000 or 150,000 rented units in total. The figure has proved to be much higher, reflecting the general housing market and the level of investment, meaning the private rented sector has increased dramatically in size in recent years.

The cyclicality we anticipated has not materialised; not only has the number of registrations proved to be very high but the intake has continued to be high, right through the four-year cycle. We had to be conscious of cyclicality in distributing the funding to local authorities because if there was a very high rate in one year, which fell significantly later in the four-year cycle, we would have had very little to give to local authorities. We tried to even out the flow of payments.

Chairman

That is not convincing in the context of the evidence on the ground. I heard recently of four unfortunates in a hovel in Cork city who had to be rescued because agencies did not protect them. I cannot understand how such vast sums of money can languish in banks. Local authorities say they are strapped for resources for inspections. They cannot get staff and are stretched to the limit, while money rests in banks which could be released to them to carry out the necessary inspections.

Mr. Conlan says the Department was fearful the money would not continue to come in but I do not understand why money was not allocated to an area where, in my view as a practitioner on the ground, there was a huge exploitation of the weakest in society. A Department and an agency are not fulfilling their obligations to the people concerned. All I have heard this morning is about administration of accounts and uncertainty about continuity of finance, while the social problem festers. I agree with Deputy McCormack. It is something I cannot accept and I do not understand the Department's response to the effect that it is purely an administrative issue.

Mr. Denis Conlan

The level of funding has increased hugely. Prior to the enactment of the legislation, we estimate there was approximately €1.2 million available from registration fees. This year we will make €4 million available. In some cases money was provided for local authorities where the inspection level was very low and we were criticised for providing money up front. To some extent, we did this to incentivise local authorities to improve their performance. From January this area of activity has been included in the local authority performance indicator system. They will be scrutinised in this regard and will have to account for their performance on that basis. We would be the last to pretend there are no problems in this area but a good deal of progress has been made. There has been much media comment on this issue but it is easy to send out a television camera to find accommodation of a poor standard.

Chairman

There were no television cameras in the case to which I refer. In most cases these issues are dealt with sensitively and quickly. We are talking about action by State agencies to protect the weakest. The conditions I saw were an insult to the Celtic tiger and all the agencies which are supposed to protect people. Mr. Conlan said he was not happy with the performance of some local authorities but what action was taken?

Mr. Denis Conlan

The Department has issued a number of circulars and guidelines to local authorities and we use every opportunity to meet city and county managers' associations, housing committees and directors of housing. We emphasise to them that this is a priority for the Government. The funding has been increased significantly and accountability is achieved through the local authority service indicator system. A great deal has been done. It should be borne in mind that the legal obligation rests with the landlord but the local authority is responsible for enforcing the regulations. We argue that performance has improved but there is scope for further improvement. The Department is doing everything possible to promote that improvement and support it with increased funding. If local authorities improve their performance, their funding increases correspondingly.

Deputy Pádraic McCormack

I want to conclude because I am conscious of other members. Details of the number of tenancies and properties for which no landlord details were available were supplied to us in a letter dated 8 April. The information shows that in 814 cases details have been outstanding for between 12 and 24 months and in 262, for over two years. This shows that there are more than 1,000 dwellings for which no details have been available for over 12 months.

Of the unregistered landlords how many were brought to court? It is further stated that on foot of attendance at the Committee of Public Accounts on 14 February 2008, the PRTB advised that the first prosecution which was successful was in December 2007. Why is there such a backlog of unregistered landlords? Given that the first court case was successful why have more cases not been taken to court?

Ms Margaret Taheny-Moore

In regard to the workload on the PRTB, the board's priority is in dealing with disputes, the landlords who are complying with the Act, and registering. Much of our manpower is directed at registering applications and dealing with disputes. A huge amount of resources cannot be allocated to actual enforcement. However--

Deputy Pádraic McCormack

Can some of the €12 million on deposit be used to do something about this? It defeats the purpose of the case if there are more than 1,000 properties for which no landlord or tenancy details are available.

Ms Margaret Taheny-Moore

We have issued notices on the occupiers of the dwellings.

Deputy Pádraic McCormack

On 1,000 of them?

Ms Margaret Taheny-Moore

On 1,000 but they have not come back with the address of the landlord. We cannot bring a case to court--

Deputy Pádraic McCormack

From whom is the PRTB seeking the addresses?

Ms Margaret Taheny-Moore

From the occupier of the rented dwelling - the tenant.

Deputy Pádraic McCormack

This is the difficulty with unco-operative landlords.

Ms Margaret Taheny-Moore

That is a difficulty we have.

Deputy Pádraic McCormack

It brings up again the issue of anti-social behaviour in cases where properties in housing estates are not maintained to a proper standard. Generally that landlord has no interest in anything except getting his rent. He does not even supply his address to tenants in most cases. I am speaking now about rogue landlords. What can the PRTB do in that case?

Ms Margaret Taheny-Moore

There are instances--

Deputy Pádraic McCormack

Looking for the address from the tenants will not solve the problem.

Ms Margaret Taheny-Moore

There are instances where the landlords come back and they are outside our jurisdiction. The tenant may be in that dwelling on a rent-a-room scheme. That is outside our jurisdiction. He is not obliged to register.

Deputy Pádraic McCormack

Yes.

Ms Margaret Taheny-Moore

They may not even be landlords. Sometimes we get references and we follow them up and find that it is an actual owner-occupier.

Deputy Pádraic McCormack

Of course. This is the weakness of the case because most of those people, 95% to 99%, are in receipt of rent supplement. It would not take long for the landlord to surface if the rent supplement were stopped. Ms Bernadette Lacey has confirmed there is provision - perhaps I could have a copy of it - for action to be taken against tenants in receipt of rent supplement where there is serious anti-social behaviour. That is the weakness of the case. The PRTB will not trace those 1,000 landlords because they are the difficult cases.

Ms Margaret Taheny-Moore

We have no information that they are landlords. We would have been given information that they are landlords but we do not know that. If we have to bring a case to court, we need to have our facts. We cannot take a landlord to court unless we have his address. We cannot serve notice on a landlord without having his address.

Deputy Pádraic McCormack

Since the PRTB was set up in 2003 or 2004 or whenever, there has been only one case where a landlord has been fined for being unregistered.

Ms Margaret Taheny-Moore

Yes. There was one case at the end of last year where we brought a landlord to court.

Deputy Pádraic McCormack

Does the PRTB consider that satisfactory?

Ms Margaret Taheny-Moore

The other side of that is that the warning letters resulted in landlords registering. This was one that did not register right up until the last day. We went to court then.

Deputy Pádraic McCormack

Is there any duplication between the 24,000 who had registered with the local authorities before the PRTB was set up and those who have registered with the PRTB?

Ms Margaret Taheny-Moore

There is no longer any--

Deputy Pádraic McCormack

Has the PRTB had the 24,000 transferred?

Ms Margaret Taheny-Moore

Yes. Everything is on our database. In relation to the four-year cycle, that will start again in September 2008. Any landlords who registered in September 2004 will have to re-register. It is a four-year cycle. It costs €70.

Deputy Pádraic McCormack

Ms Taheny-Moore has told me, however, that 1,000 properties have remained unregistered for more than 12 months, 264 for more than 24 months and the PRTB is only now seeking information on those to see if any of them can be brought to court.

Ms Margaret Taheny-Moore

That figure was taken at a particular point in time. That figure changes daily.

Deputy Pádraic McCormack

This letter is dated 8 April 2008.

Ms Margaret Taheny-Moore

Yes, and we said it was extracted at a particular point in time. It could have changed. That can change daily. We get more than 300 applications to register every day. Before we would issue any enforcement notice and continue pursuing the legal process, we would always check that the application has not arrived in the meantime.

Deputy Pádraic McCormack

It has to be factual at any point in time. We have to take some date. That was the figure at that date so we have to assume that 1,000 are unregistered for 12 months or more and so far nothing has been done about them.

Ms Margaret Taheny-Moore

One way the PRTB would look at it is that 220,000 tenancies are registered. That is representative of 90,000 landlords. We consider that to be a very high compliance rate from the landlord side.

Deputy Pádraic McCormack

I would say--

Ms Margaret Taheny-Moore

The numbers that appear to be unregistered are relatively lower. They are very little compared with what is registered. We devote our resources to dealing with those who comply, specifically in terms of disputes and registration. We receive more than 300 applications daily. For those who comply we must ensure we can process those applications within a reasonable timescale.

Deputy Pádraic McCormack

Given the current slump in property sales, I am sure there will be many more rented properties than heretofore because most builders who have properties on their hands are renting instead of selling them because they cannot sell them. I consider the registration of 90,000 landlords as a very low figure nationally for the number of rented properties in the country.

Ms Margaret Taheny-Moore

That is landlords. One landlord could own up to ten properties. Some 220,000 tenancies are registered which is representative of 90,000 landlords.

Deputy Pádraic McCormack

Are those single tenancies?

Ms Margaret Taheny-Moore

They could be flats, individual flats within a house, or a single house. It depends on how it is registered. Four people within a house could be one tenancy.

Deputy Pádraic McCormack

Does it include a situation where the owner is the occupier and has a rent-a-room scheme?

Ms Margaret Taheny-Moore

The rent-a-room scheme is outside the remit of the legislation. The last census of population showed that there were around 180,000 dwellings or units at the end of 2006. We would consider that we are fairly well up on the compliance rate.

Deputy Pádraic McCormack

I will finish on that. We are not up on the compliance rate given that, to our knowledge, 1,000 are still not registered for more than a year.

Ms Margaret Taheny-Moore

As I said, they may not all be landlords who come under the remit of the legislation because they may on the rent-a-room scheme. They are names that are given to us that we pursue but many have come back and said they are owner-occupiers on the rent-a-room scheme and are not required to be registered under the legislation because they are exempt.

Deputy Pádraic McCormack

Will Ms Taheny-Moore supply the committee with an update of the current situation?

Ms Margaret Taheny-Moore

We certainly can do that.

Deputy Brendan Kenneally

I welcome the delegations to the committee. It is obvious there are difficulties in the legislation and that there is not enough joined-up thinking across the different agencies involved in this issue. I am sure the committee will come up with some recommendations as to what should be done. One of the obvious flaws in legislation is that Revenue cannot get information from the PRTB except on a case-by-case basis. As well as this, data given to Revenue at one stage could not be interrogated because the landlord records were not in the required format. That suggests to me that computer systems are not able to talk to other computer systems. I am sure the committee will come up with various recommendations on that issue.

I want to ask again about the €8.6 million cash in the bank on 31 December 2006. I accept what Ms Kathryn Ward said earlier that she unintentionally misled the committee the last day. She said not that local authorities were excellent in carrying out inspections but that they were so in regard to dispute cases. That suggests local authorities are not excellent in carrying out inspections. If they were, they would receive much more money back from the PRTB.

The board seems to take credit for the fact that the authorities will be given €2 million this year and €3 million the following year, but that is only a fraction of what they should be given. For instance, if the authorities were paid a year in arrears, given that the board received €4,900 in registration fees according to the 2005 accounts, it gave the authorities back €2 million in 2006, whereas they should have been given €2.8 million if they were to be given back all they were due. The board gave the authorities €3 million in 2007, but based on the 2006 accounts, they should have been given €4.3 million. The board is constantly leaving a shortfall in such payments which will continue to inflate its cash reserves. When will the board reach the point where it will be able to give all local authorities all the moneys they are due in a reasonably short period?

Ms Margaret Taheny-Moore

I would like to pass that question to a representative of the Department of the Environment, Heritage and Local Government for reply because while the PRTB facilitates these payments, it does not decide how much is allocated where.

Mr. Denis Conlan

Regarding Deputy Kenneally's question, we are increasing the amount being paid to the local authorities. However, as I said earlier, we must have regard to where they are coming from. In 2005, for example, a number of local authorities did not carry out any inspections. That was totally unsatisfactory and we have drawn attention to that. None the less, we paid some money to all the authorities in 2006 and, as I mentioned, there was some criticism for doing that. As the authorities improve their performance, we are progressively increasing the sum of money allocated.

As the director of the board said, the Department sets out the policy on distribution and it acts in accordance with that and with the decision by the Minister on the allocations. We must bear in mind the effectiveness of how this money is distributed to achieve a carrot and stick type of approach. We must have regard to the fact that we need to help them with resourcing and to their capacity to respond and use that money. There would not be much point, for example, in moving money from the PRTB to the local authorities if they were not carrying out inspections. To incentivise and promote much more effective operation of the enforcement function, that is the approach that has been adopted, namely, a twin-track approach where a certain quantum is on a flat rate and an increasing proportion is based on performance-related funding.

Deputy Brendan Kenneally

If a local authority did not carry out any inspections in 2005, would it never be allocated the portion of fees that would normally be allocated to it if it had carried out its functions properly? Would such fees be retained by the PRTB because the authority in question did not carry out its functions?

Mr. Denis Conlan

No.

Deputy Brendan Kenneally

Therefore, the authority would be allocated such money eventually.

Mr. Denis Conlan

Yes.

Deputy Brendan Kenneally

Even though the authority did not carry out its function in that respect in 2005.

Mr. Denis Conlan

There is not much point in looking back and penalising. That is not the object of the exercise, rather it is to achieve some results.

Deputy Brendan Kenneally

A local authority could decide in 2010 or 2011 to do everything right in this respect in that year and that would enable it to be allocated the moneys it was due for the previous five years.

Mr. Denis Conlan

I may have given the Deputy the wrong impression. The two sevenths allocation is not related to any specific local authority. There is nothing in the law that specifies that each local authority must be allocated two sevenths of the income from units contained within its area--

Deputy Brendan Kenneally

It is five sevenths of that income.

Mr. Denis Conlan

Yes, five sevenths of it. It is a global formula.

Deputy Brendan Kenneally

Is it the case then that the local authorities which are performing well and doing this job in a correct manner will be better rewarded than those who are not doing the job?

Mr. Denis Conlan

That is the case, and that is increasingly the position. In the early stages, for which I do not have the exact breakdown of figures, it would have been more of a 50:50 ratio in that regard, with 50 being a flat rate based on the number of units located within the local authority area. By this year we will have moved more to a two thirds ratio, based on performance. Ultimately, it may go all the way to a performance related system.

Deputy Brendan Kenneally

Can Mr. Conlan provide the committee with such figures? I do not expect him to have them today. Regarding the €3 million that was allocated in 2007, of that amount can he indicate what each local authority was allocated?

Mr. Denis Conlan

Yes.

Deputy Brendan Kenneally

How much of that was performance related, based on the number of registrations from that local authority area? Can Mr. Conlan provide members with that information?

Mr. Denis Conlan

Yes, we can. Even now I can say that the money was paid in two tranches. The first tranche was approximately 50% of the total; €1.5 million was allocated early in the year and the remaining €1.5 million was issued later in the year. Half of the first allocation of €1.5 million was based on the number of registrations and half of it was based on targets set for the year, and at the end of the year the other 50% was distributed based on the authorities' performance. We can forward a table to the committee setting out a breakdown on an individual local authority basis and the proportions that fall within the different categories of distribution.

Deputy Brendan Kenneally

I have a brief question for the PRTB. When does the board expect to reach a position that it would be self-sufficient from a funding point of view and would not need Exchequer funding?

Ms Margaret Taheny-Moore

We are developing an information and communications technology strategy and have consultants in at present. It will probably take another two to three years before we could say we would be able to remove ourselves from such reliance. That would depend on the registrations continuing at this level.

Deputy Brendan Kenneally

Yes, I understand that. Ms Taheny-Moore mentioned ICT and there is a reference in one of the documents to on-line registration. How far advanced is such a system?

Ms Margaret Taheny-Moore

That is one of the areas the consultants are examining and it will be one of the recommendations in their strategy. However, we need to amend the legislation and the proposal to do that is with the Department. It is expected that provision for this will be in a housing (miscellaneous provisions) Bill which probably will be ready before the summer recess.

Deputy Brendan Kenneally

I note a letter was received from Ms Lacey from the Department of Social and Family Affairs dated 2 April. Ms Taheny-Moore clarified that the board can cease rent supplements to non-registered landlords. She referred to that in regard to anti-social behaviour and also in the case where a landlord is not registered. She also said that the board can only do this if the tenant would not be disadvantaged. In such cases, the tenant probably would always be disadvantaged. I cannot envisage any cases where the rent supplement will not be paid. Therefore, does that happen in reality?

Ms Bernadette Lacey

No, it has not been done to date. The issue for us is that the payment of rent supplement is a payment to the individual tenant, it is not a payment to the landlord. Therefore, if we are to take any action in regard to payment of rent supplement, we must be careful that we do not leave someone without accommodation. In any situation where we must consider the removal of the rent supplement, we must ensure the tenant has or is capable of acquiring different accommodation within a reasonable period. That is where our concern lies. Our concern is to ensure an individual is not left without accommodation because of some action by the landlord for which the tenant is not responsible.

Deputy Brendan Kenneally

That would seem to suggest that everything is stacked in favour of the landlord.

Ms Bernadette Lacey

The difficulty is that the payment is to the individual tenant. If a situation arises where we need to stop the payment to the landlord, we would notify the tenant. In relation to registration, it has not arisen to date. We would have to give the tenant notification of the situation, give him or her an opportunity to find alternative accommodation within a reasonable period and at that stage the payment would cease to that landlord through that tenant because the tenant would have moved. However, we are not in position to stop the rent supplement straight away because that tenant literally would be left out on the street.

Deputy Brendan Kenneally

We should have a mechanism that kicks in more quickly to deal with such cases because landlords will take advantage of a situation.

Ms Bernadette Lacey

The problem is that we in the Department do not have a relationship with the landlord. The payment is to the tenant and to stop it seems unfair. It is unfair to disadvantage the tenant because of the behaviour of the landlord.

Deputy Brendan Kenneally

The payment is to the tenant but should it not go to the landlord? Most landlords are decent and operating properly. There are many situations where the payment is made to the tenants but the tenants do not pay the money to the landlord, thereby building up arrears over a period which results in their being evicted. Would it not be more simple to pay it directly to the landlord? That might require legislation but perhaps that is one of the recommendations the committee should make. Perhaps Ms Lacey would clarify the position.

Chairman

Why can the cheque not be made payable to the landlord but presented to the tenant?

Ms Bernadette Lacey

As the legislation stands, the payment is to the individual tenant. It is up to the tenant to pay the money to whichever landlord he or she wishes. If we were to do it in another way, a change in the legislation would be required. If we were to make payments directly to landlords, it would be an entirely different scheme.

Chairman

However, the Department is doing it in the case of the rental assistance scheme through the Department of the Environment, Heritage and Local Government. The payment is made to the landlord.

Ms Bernadette Lacey

It is a different scheme.

Chairman

It works, however.

Ms Margaret Taheny-Moore

I will explain that point. The problem with rent supplement is that it was intended to be a short-term payment. During the years, due to difficulties with housing, it has developed into a longer-term scheme. We have brought it back to the position where the payment is only made for up to 18 months, at which stage the person is entitled to participate in the rental accommodation scheme. We envisage that in the future it will probably be reduced to an even shorter period. It is meant to be an emergency payment for the individual and it should go back to being that rather than making it a payment to the landlord.

Deputy Brendan Kenneally

I accept that point, but the reality is that people are on rent supplement for a long time. Even with the rental accommodation scheme in place, there might not be accommodation available at the end of an 18-month period. Would it not make more sense to change it? Is it a regulation or legislation that would have to be changed?

Ms Margaret Taheny-Moore

It is primary legislation.

Deputy Brendan Kenneally

Therefore, primary legislation would be required.

Ms Margaret Taheny-Moore

Yes.

Deputy Brendan Kenneally

With regard to the PRTB and delays with disputes, it was said that there were 2,800 at the end of 2007, which appears to be a large number of disputes outstanding. Ms Taheny-Moore will say it is only a small percentage of the overall total number of tenancies and that many of them relate to anti-social behaviour. In reply to questions asked she said the procedures were being reviewed. With regard to anti-social behaviour on the part of third parties, is there a need to strengthen the law? Public representatives probably receive more complaints about this aspect of the private rented accommodation sector than any other, because the local authority has no function in the matter. Is legislation required?

Ms Margaret Taheny-Moore

It is possible. The number of disputes coming to us relating to anti-social behaviour is not huge. The majority of cases we deal with involve deposit retention. The second most common complaint concerns rent arrears. Problems with anti-social behaviour are not--

Deputy Brendan Kenneally

Perhaps that is because people do not know that they can refer such problems to the board. When they go to the local authority or the Garda, they are told it is not their responsibility. Perhaps that is part of the reason.

Ms Margaret Taheny-Moore

There is information on our website on how a person makes a complaint. Threshold also provides advice for tenants on how to approach the PRTB.

Deputy Brendan Kenneally

If these cases are referred to the board, is Ms Taheny-Moore satisfied that the legislation is strong enough for the board to deal with them?

Ms Margaret Taheny-Moore

What first must be established is what the anti-social behaviour involves. Is it occurring within the curtilage of the dwelling?

Deputy Brendan Kenneally

Normally it would be.

Ms Margaret Taheny-Moore

Many contact us by telephone about joy-riding. That is a criminal matter which is the responsibility of the Garda. It has nothing to do with the PRTB. We just deal with cases relating to, for example, loud music.

Deputy Brendan Kenneally

That is within the curtilage.

Ms Margaret Taheny-Moore

It is, but we receive calls from individuals who complain about joy-riders. If they are out on the street, they are not--

Deputy Brendan Kenneally

That is a different matter.

Ms Margaret Taheny-Moore

Yes.

Deputy Brendan Kenneally

I accept that. However, I am referring to what happens within the curtilage.

Ms Margaret Taheny-Moore

With regard to giving information--

Deputy Brendan Kenneally

Is Ms Taheny-Moore happy that the legislation in that regard is strong enough?

Ms Margaret Taheny-Moore

Yes, it is.

Deputy Brendan Kenneally

Many would go to the local authority with these problems. Do the local authorities work with the PRTB on this issue? Do they advise people to refer such matters to the board or do they refer them to the board?

Ms Margaret Taheny-Moore

Local authorities would be aware of the PRTB--

Deputy Brendan Kenneally

No, that is not the question. Are they referring matters to the board?

Ms Margaret Taheny-Moore

We have met some of the Dublin local authorities. We have also met some of the policing forums in the Dublin area and attended public meetings at night. More recently we have been invited to meetings to explain our role and many of the questions are about anti-social behaviour. We are liaising with local authorities and the Garda on identifying our role in helping them sort out the anti-social behaviour issue.

Deputy Brendan Kenneally

With regard to prosecutions, one can be fined up to €3,000. There has only been one prosecution which resulted in a €1,500 fine. Did that fine go to the board?

Ms Margaret Taheny-Moore

It was imposed on the landlord on registration.

Deputy Brendan Kenneally

Does a monetary fine go to the board?

Ms Margaret Taheny-Moore

Yes.

Deputy Brendan Kenneally

With regard to the private residential market, there is a chance of catching people who are trying to avoid income tax if there is a rent supplement involved or engagement with a local authority or the HSE. In many cases, however, there is no such engagement and there is simply an interaction between a private landlord and private tenant. How do the Revenue Commissioners access information on such cases? The landlords do not have to fill in various forms and supply their PPS numbers or tax clearance certificates. They can easily operate in the black economy. How are they found?

Ms Josephine Feehily

It starts from the point that it is a self-assessment tax system. People are supposed to report all their sources of income. If we do not have returns from people whom we know exist from third party information, that obviously makes them a compliance risk. If somebody is determined to operate outside an official system and not to register for taxes or with any of the State agencies in this or any other sector, he or she presents a major challenge for everybody. We are reliant on our local intelligence and the special compliance work carried out at ground level in Revenue districts. Officials collect intelligence about property and other economic activity in their area and then audit it. The point of the Deputy's question is that if somebody wishes to stay outside the system and not to connect with any of us, he or she presents a real challenge. However, it is same challenge in this or any other sector and we are reliant on local intelligence in many cases.

Deputy Brendan Kenneally

Ms Feehily referred to this matter previously. There are certain instances where tenants in the private rental sector can claim tax relief.

Ms Josephine Feehily

Yes.

Deputy Brendan Kenneally

I presume Revenue has a mechanism for pursuing the matter.

Ms Josephine Feehily

Private tenants can claim a tax credit and that information is fed into our risk analysis system. We connect it with the information on landlords or taxpayers. We also have stamp duty information. If people have more than one property, we will be aware of it from our stamp duty information. That is a recent development in our data matching. It would also be a very useful indicator of the previous category we discussed.

Deputy Brendan Kenneally

When Mr. Frank Daly was with the committee previously, he said he would love to get his hands on the PRTB database. It appears extraordinary that the Revenue Commissioners cannot do this. However, I understand it requires primary legislation.

Ms Josephine Feehily

It does. As I said, we are developing a proposal which we will put to the Department of Finance for inclusion in the next Finance Bill to gain access to the data automatically. The essence of the data-matching point the Comptroller and Auditor General made in his report is about having data we can use. That concerns getting it in a way so that the format is suitable and we have personal public service numbers. Working manually through millions of records does not add anything to the efficiency of the public service. Therefore we are developing a proposal to get that data automatically.

Chairman

Ms Taheny-Moore mentioned the on-line registration for landlords. Will the PRTB be seeking a PPS number?

Ms Margaret Taheny-Moore

We do and it will continue. The only thing we will have to do is remove the requirement for a signature, which will be done through legislation. I want to correct something I mentioned earlier when the Chairman asked me about fines. The fines actually go to the Fines Office. Sometimes we get costs awarded to us and they come directly to us.

Deputy Brendan Kenneally

Ms Taheny-Moore spoke of a four-year tenancy cycle, which puzzles me a little. I thought most tenancies lasted about a year and were renewed. The tenancy is between a landlord and tenant. If it lasts three months, 12 months or four years it costs €70, but why a four-year cycle? Ms Taheny-Moore mentioned that cycle as if most people were renting a property for four years whereas I would have thought it would be more likely that they would rent it for a year.

Ms Margaret Taheny-Moore

It is what is in the legislation. There are tenancies that last four years. We have found a number of them. We did a report recently and there were more than 22,000 cases where tenancies had commenced in September 2004. They would have to be renewed again in September this year.

Deputy Brendan Kenneally

Approximately 10% of them run for that period.

Ms Margaret Taheny-Moore

Yes. Obviously some of them would continually be coming in new, but there would be ones that would already exist. They would be on our database. It could also be the fact that the landlord has not come back to re-register the tenancy but we would not know that. On our database we would consider them to be currently registered.

The Deputy mentioned fees of €70. If one has three registrations in a year, the third one is free.

Deputy Brendan Kenneally

Even if they are on different properties?

Ms Margaret Taheny-Moore

No, not different properties. It is for the same tenancy.

Deputy Brendan Kenneally

Within the same building.

Ms Margaret Taheny-Moore

Within the same tenancy.

Deputy Brendan Kenneally

For the same apartment or house.

Ms Margaret Taheny-Moore

Yes.

Chairman

So it is a case of getting two and one gets the third free.

Ms Margaret Taheny-Moore

The third is free.

Mr. Denis Conlan

I am not sure whether it is appropriate for me to try to give the rationale behind the legislation but I can perhaps offer some historical background that might help to answer the Deputy's question about the four-year cycle. The 2004 Act was largely framed on the basis of recommendations by a commission on the private rented sector that reported in the year 2000. That was one of the recommendations. Essentially, one would have to say that it was a compromise between different interests. We were moving from a situation where there was virtually no security of tenure for tenants in the private rented sector in this country. There had never been any reform of the legislation in this area. The law that applied in the 19th century when there were evictions was still in place. There was only an obligation on a landlord to give 28 days' notice. The commission was trying to see how it could improve that significantly while at the same time getting a reasonable amount of support and buy-in on the part of landlords.

The four-year period was a fairly pragmatic decision. It is a security of tenure measure which means that once the tenancy has been in existence for six months, the landlord cannot terminate that tenancy except for specific, valid and verified reasons. By and large, it seems as if it has worked pretty well in the sense that the sector has expanded quite well and there is that additional measure of security. There is a fairly big turnover in the sector so it would not be uncommon for some tenancies to change in a much shorter timeframe. However, it is primarily an improved security of tenure measure.

Deputy Brendan Kenneally

Towards the end of her presentation Ms Feehily referred to 2006 rent supplements information from the Department of Social and Family Affairs. She said they had now matched about 65%, excluding the agent cases. What are agent cases?

Ms Josephine Feehily

In approximately 20% of the files we got, the rent supplement was paid to an agent or the tenant paid it to an agent. There was an agent between the tenant and the landlord. It came to us in that fashion. The agents are irrelevant from the point of view of the landlords' tax compliance. At the same time, however, we have a separate exercise in train and separate powers to write to agents and compel them to give us information. We are doing that as well. It is a separate piece because matching that data will not get us to the landlord. That is why we have to do it in a different way.

Deputy Seán Fleming

I have a couple of questions concerning tax. Does Ms Feehily have the numbers on file of how many people make returns for residential income? The figures we saw were for rental income, but that would cover commercial, industrial and, presumably, residential rental income. Does Ms Feehily have a breakdown of that information?

Ms Josephine Feehily

I have some numbers. We did some work on this since the last meeting.

Deputy Seán Fleming

Good.

Ms Josephine Feehily

It may or may not be fully satisfactory but I will give the Deputy some numbers I have for 2006. We have 103,000 individuals reporting rental income, gross of everything, of €3.564 billion. I am sorry but given the way it is written down here I am not sure how many noughts to add on.

Deputy Seán Fleming

That is okay.

Ms Josephine Feehily

Some of my figures are in thousands and some are in millions. It is €3.5 billion. We have 6,900 companies that are reporting a figure of €657 million, but that is a net-of-interest figure. It is not the same or as comparable as the individual figure because their tax return requirement gives them the opportunity to report net. Does that give the Deputy some of the information he requires?

Deputy Seán Fleming

There are 103,000 people reporting rental income.

Ms Josephine Feehily

Yes, of €3.5 billion gross.

Deputy Seán Fleming

That is the total rental income but the figure is a combination of gross for some people and net for others.

Ms Josephine Feehily

That is gross for the individuals. The figure for the companies is net of some deductions. It is net of interest but not net of capital allowances, so it is a bit complicated. I could provide the committee with a written note on this information.

Deputy Seán Fleming

Perhaps Ms Feehily could provide the committee with a note to that effect because obviously she has done some work since the last meeting.

Ms Josephine Feehily

Yes.

Deputy Seán Fleming

I will combine all my remaining questions on this topic. Some of the people who have purchased property will be claiming tax allowances on that. Does Ms Feehily have the numbers of how many people are claiming tax allowances? Is it a separate figure?

Ms Josephine Feehily

Out of that 103,000 we have 63,700 who are claiming interest on those properties, for example.

Deputy Seán Fleming

That is good for a start. We mentioned that 92,000 landlords have registered so far. We now find that at least two thirds of them are claiming interest on those properties. From that point of view, it is worth their while registering to get tax relief on the properties they purchased. There may not be formal checks and balances in the system but when one looks at it nationally and globally, there appear to be correlations that give some comfort. It is not wholesale avoidance running into the black economy because clearly almost two thirds of them are registered. There may be more involved but who are not claiming the interest figure.

Ms Josephine Feehily

As a result of the four-year period when people can claim, our figures are always rolling. Anytime from 2004, 2005 or 2006 they are going up as people decide to claim four years' credit or interest. I have also another figure. Approximately 37,000 of them are claiming capital allowances.

Deputy Seán Fleming

Some of those would be claiming the interest as well.

Ms Josephine Feehily

Yes but one cannot add them.

Deputy Seán Fleming

They cannot be matched.

Ms Josephine Feehily

I cannot disaggregate how many of them are claiming both.

Deputy Seán Fleming

Ms Feehily will give the committee that information in writing. It provides some overall comfort because on the last occasion I found the focus of the committee's discussion was purely on those in receipt of rent supplement, although they are only a small subset of people in the overall rental market. I do not know, but it is probably 10% of the housing market. We have the figure from the Central Statistics Office. Some 20% of people are not living in rental accommodation. The potential for revenue loss is far greater in the rent supplement area. I make that point because we have focused too much on one small subset without looking at the bigger picture. There is a little bit of comfort in the bigger picture. Revenue must have the figures in regard to tenants who claim tax relief on rent paid.

Ms Josephine Feehily

We have a provisional figure. One must bear in mind it is subject to the four year rule so it is a constantly changing figure. There were 236,500 in 2006.

Deputy Seán Fleming

That is a very high proportion of--

Ms Josephine Feehily

There is a provisional figure for 2007 of 248,00, which is very high.

Deputy Seán Fleming

What is the total number of tenancies covered by Revenue?

Ms Margaret Taheny-Moore

There are almost 218,000 tenancies registered. That represents more than 360,000 tenants. I add a caveat with the latter figure because not all tenants give a PPS number. The PPS number is required but if a landlord makes a reasonable effort, we will register a tenancy. There are some statistics on our database with no PPS number so there may be a small element of duplication in the number of tenants I quote. If the tenant moves, he or she could still be on our database.

Ms Josephine Feehily

I fully understand the point the Deputy makes. Our definition is "claimants"; it is not "tenancies".

Deputy Seán Fleming

I understand that.

Ms Josephine Feehily

There could be multiple tenants.

Deputy Seán Fleming

Some people might have made a claim in 2007 for 2006 and 2007.

Ms Josephine Feehily

There could also be four claimants in one tenancy.

Deputy Seán Fleming

There would not be too many, although there might be some cases.

Ms Josephine Feehily

I just make that point.

Deputy Seán Fleming

The publicity over the past year or two encouraging tenants to claim tax relief has had the benefit of bringing all these people into the system. Landlords know tenants are claiming relief. All that is helping, although I am not saying it is solving the problem. When filling in the form to claim tax relief, do tenants have to give the landlord's PPS number?

Ms Josephine Feehily

The tenant is required by law to give the landlord's PPS number. There is, however, an exception where a tax inspector is satisfied that getting the PPS number would put the tenant in an impossible position. In such cases, the tenant must provide as much information as he or she can to the inspector who must be satisfied.

Deputy Seán Fleming

We heard at length from the Department of Social and Family Affairs and this is where I find a contradiction, although perhaps the legislation is a bit hypocritical. There is no requirement on those claiming rent supplement to put their landlord's PPS number on the form. The answer we got from the Department of Social and Family Affairs was that it cannot expect the tenant to get the PPS number of another individual yet the Revenue Commissioners state that if somebody is claiming tax relief, the legislation, by and large, requires him or her to get the PPS number. There are contradictory approaches to tenants acquiring landlords' PPS numbers to claim tax relief or rent supplement. It is bizarre. Am I right? Is it required on the Revenue's form but not on the Department of Social and Family Affair's one?

Ms Josephine Feehily

There is no doubt the legislation is different. In our case, the common denominator is that a tax credit is being claimed. The tenant has a relationship with us in regard to his or her rent. As Ms Bernadette Lacey said, the Department's situation is slightly different in that the tenant does not have a relationship with Revenue in regard to the rent supplement. Our legislation is clear.

Deputy Seán Fleming

Does Ms Feehily understand the principle of what I am saying? There is no legal requirement for a tenant to provide a landlord's PPS number if claiming rent supplement but there is if claiming tax relief. I find that anomaly strange. We will have to come back to it. If that is what the legislation states, there is an inconsistency. We look forward to receiving some information from Revenue.

My next question is for the Department of the Environment, Heritage and Local Government or the Private Residential Tenancies Board. When the system was cranked up in 2005-06, which group of officials from the local authorities were called together? Was it the housing officers or the directors? Have meetings been held with housing officers in regard to their role in inspections?

Mr. Denis Conlan

A very detailed circular was issued to all local authorities in September 2004. In 2006, a further very detailed set of instructions was sent out. At that time, a concerted programme was launched by the Minister of State with responsibility for housing and we met the housing subcommittee of the city and county managers association which is composed mainly of managers and directors of services, as we do on a quarterly basis.

I met a range of the local authorities, primarily the city-based authorities in which the larger concentration of private rented properties are located. That would have been at director of service level and at practitioner level down the line. In addition, a study was carried out by the centre for housing research into this area to draw up good practice guidelines. The group contained some local authority representatives and it produced quite a detailed report last November which is intended to assist local authorities in carrying out their functions. It gives them recommendations on how to go about their enforcement functions in a strategic and effective way.

We believe we have come at this in several ways. There is also a certain tie in with the Private Residential Tenancies Board in that a manager is represented on the board of the PRTB who is capable of representing the interests and concerns of the local authority sector.

Deputy Seán Fleming

I hope the Department of the Environment, Heritage and Local Government does not mind me saying so but it has done everything bar what I asked. It sent circulars, did studies, met the housing subcommittee of the city and county managers association, which does not represent all of them, in the course of the normal quarterly meetings and met some of the city housing officers. My question was, what was the agenda for the meetings with the housing officers of each local authority on this new operation? Mr. Conlan did not say a meeting was called with the housing officers solely on that topic. Perhaps that did not happen. Dealing with Departments and county authorities, I often believe direct meetings are not held but that circulars are sent and there are meetings with managers. Did one-to-one meetings on this topic take place? If so, how often did they occur? When is the next meeting?

Mr. Denis Conlan

We would have had bilateral meetings, if one wants to call them that, with five to seven individual--

Deputy Seán Fleming

There was no meeting with the housing officers of each local authority specifically to discuss the Private Residential Tenancies Board and registration. I know there were one-to-one meetings with different officers. I would have thought somebody from the Department or in the Private Residential Tenancies Board would have called in one player from each of the local authorities to discuss the new regime and to say it wanted targets, inspections, to set standards and that an annual meeting would take place. I do not get the sense that happened. I recommend that happens in the future.

Mr. Denis Conlan

We will take note of that recommendation. We would have gone fairly close to what Deputy Fleming was saying in that the local authorities' housing practitioners, who are more at the coalface than the directors, have an annual conference every year and this issue of standards and the private rental sector has featured very highly on the agenda. For example, it featured in November or December last, when the Department's Minister of State spoke to the practitioners. The main theme of his address was the issue of standards. He launched that good practice report at that meeting. I recall that in 2004, the then acting director of the PRTB and I spoke at the conference when it was held in the Keadeen Hotel in Newbridge, and there were some workshops on the issue.

Chairman

Deputy Fleming has made a strong and valid point. I ask Mr. Conlan to accept, as a view of the committee, it is essential he would have a discussion--

Deputy Seán Fleming

Convened specifically.

Chairman

--with the people who are in position to implement policy at local level, that is, the directors of housing.

Deputy Seán Fleming

It may be somebody else in some of the big local authorities. It might not be the director. Mr. Conlan gets the gist of what we are saying. Often at national level the Government formulates policy but it gets defused and dispersed. As everyone will be aware from local authorities, we all are plagued with changing staff. It is rare to meet the same person in the same post 12 months later. There is a continual change of staff and this would need to happen every year.

I wish to raise a couple of minor points on this topic. The HSE does the work on the ground. The officials may correct me if I am wrong, but my understanding is that many of the cheques from the HSE for rent subsidy are paid to the landlords. Perhaps I am wrong, but I hear that most of the landlords do not want the hassle of having to go to the tenants and chasing cheques. The Department might check whether there is a different practice among the HSE community welfare officers. It is not as clear cut. Some of them definitely go to the landlord.

Ms Bernadette Lacey

Deputy Fleming is correct.

Deputy Seán Fleming

It was stated that they go to the tenants, not to the landlords.

Ms Bernadette Lacey

It is a payment to the tenant. At the tenant's request, we pay it to whichever agent or agency he or she wants.

Deputy Seán Fleming

Including the landlord.

Ms Bernadette Lacey

It might be to a relative, it might be to the landlord or it might be to some other body where the tenant is not capable.

Deputy Seán Fleming

Perhaps it is the language but the Department can clearly understand how this side of the House got the impression earlier that these were payments to the tenant. I understood that to mean that the cheque was paid to the tenant.

Deputy Róisín Shortall

May I clarify that? I thought the majority went to the tenant.

Ms Bernadette Lacey

The money belongs to the tenant.

Deputy Seán Fleming

We understand that.

Deputy Róisín Shortall

The vast majority of payments go to the tenant.

Ms Bernadette Lacey

The vast majority of them - about two thirds - go to the tenant.

Deputy Seán Fleming

Does one third go to landlords?

Ms Bernadette Lacey

To a landlord or another agent. It might be a family member or somebody else.

Deputy Seán Fleming

When that was stated this morning, my ears perked up when the impression was given. It is legally a payment to the tenant but the cheque need not be made out to the tenant.

Ms Bernadette Lacey

It is merely a conduit for the payment that it would go to somebody else but the money belongs to the tenant.

Deputy Seán Fleming

Often the staff of the HSE are those on the frontline dealing with the rental subsidy form. I have two questions in that regard. Must a person be on a housing list to get rental subsidy? Does the HSE, as a matter of form or due to being told by the Department, check that the residency is registered with the Department before it pays rental subsidy?

Ms Bernadette Lacey

In answer to the question, a person does not have to be on the housing list. In answer to the second, the tenancy only comes into play when the tenant has paid over the money and taken over. As I understand it, the landlord has at least a month, and maybe a couple of months longer if he or she is willing to pay, in which to register.

Deputy Seán Fleming

Is there a formal follow-up mechanism?

Ms Bernadette Lacey

No, but we notify the PRTB on a quarterly basis of all of the new rent supplement cases which have come into play. The information is passed to them.

Deputy Seán Fleming

What does the PRTB do with that quarterly list?

Ms Margaret Taheny-Moore

We try to match it with our database. Some of the difficulty is that as I mentioned earlier, we do not have all tenants' PPSNs and the information we get would not include the landlords' PPSNs. Therefore, we are matching it from a tenant's perspective. The figures we quoted earlier for enforcement notices are the ones we follow up. We find in some cases that it could be a rent-a-room scheme or it could be owner-occupied. We follow up on those files which we get on a quarterly basis.

Chairman

At the last meeting with the committee Ms Lacey stated that 13,000 payments are made directly to landlords. Some 5,000 are made to a nominated person or agent of the customer.

Ms Bernadette Lacey

Yes, 13,000 are to landlords. There are another 5,000 payments to other persons.

Chairman

Nominated persons?

Ms Bernadette Lacey

Other agents.

Deputy Darragh O’Brien

I wish to follow on from a couple of points Deputy Fleming raised on how the Department of the Environment, Heritage and Local Government interacts with the local authorities. I will not go over old ground on the procedures inspections but this is crucially important. How does the Department know how each of the local authorities are performing? If they are getting €50 out of every €70 on the registration, how often are there checks and balances to see how each local authority is performing in this regard?

Mr. Denis Conlan

They submit returns to us on a quarterly basis and these returns are published. We see the funding mechanism itself - I mentioned earlier the idea of increasingly relating the amount of funding provided to the level of performance - as being a fundamental method of getting leverage to incentivise improvement in performance.

In addition, the system of local authority performance indicators, which has been in operation in recent years and is administered by the local government division in the Department, contains a number of key indicators. Included in that, from 1 January 2008, are a half-dozen or so housing indicators. We have succeeded in getting included in that performance on the enforcement of private rented standards. That is considered to be an important instrument of accountability.

Deputy Darragh O’Brien

Reports are one matter. My main point on this is that if they are reporting quarterly, have we seen a general improvement across the board in local authorities?

Mr. Denis Conlan

There is a very significant improvement. To take it at a global level first, I can recall the figures for 2005, 2006 and 2007. In 2005, the figure was roughly 6,000; in 2006--

Deputy Darragh O’Brien

Are these inspection numbers?

Mr. Denis Conlan

They are the total number of inspections. If the Deputy wishes, I can speak about compliance subsequently. Not every aspect of it shows improvement but if the Deputy wishes, I can elaborate.

Deputy Darragh O’Brien

It may be important for us to get these figures and the performance indicators. The reason I say so is that when we had the Department before the committee a number of weeks ago on the issue of the number of unoccupied existing social housing stock - there are almost 6,000 houses unused while there are people on lists - I asked the Secretary General directly how often is the Department liaising with each local authority. I was told it is done annually. While there may be quarterly reports, I do not have any confidence that the Department is effective in getting the local authorities to do their jobs. If we are providing them with funding and they are not using it, I would like to know has each local authority designated staff to carry out the inspections or is it subsumed within the housing department's budget.

It is vital that we get to the bottom of this because it astonished me a couple of weeks ago that the Department was not following up on a monthly basis to ensure that local authorities were freeing up existing housing stock. Both these issues are alive in the housing departments in each of the local authorities.

Last week we had the allocations of funding to provide new social housing. When one considers the outturn figures for local authorities, it is clear that many of them under spent to a significant degree in 2007. This does not indicate that the Department is in regular contact with local authorities in respect of this matter. I would like to obtain a copy of the document to see the performance indicators. Have local authorities designated staff in their housing sections whose responsibility it is to make inspections?

Mr. Denis Conlan

At this stage, most of them do. If we went back a year or two, that would not be the case. That was reflected in the returns for 2005 when a total of 18 of the local authorities did not--

Chairman

Will Mr. Conlan provide a written reply to the question put by the Deputy?

Mr. Denis Conlan

Yes.

Chairman

Is it true that in some local authority areas staff from the enforcement or planning sections make these inspections? Is it the case that it is everybody's job but nobody's responsibility?

Mr. Denis Conlan

This is an area in respect of which the performance has improved, particularly with the introduction of RAS. There is a close tie-in regarding accommodation standards and RAS.

Chairman

RAS is a new scheme and it is tightly controlled.

Mr. Denis Conlan

Yes.

Chairman

Deputy O'Brien is referring to the wider position as regards rent subsidy and supplementary welfare payments.

Mr. Denis Conlan

There is a direct tie-in with regard to rent subsidy as a result of transferring tenants from the rent supplement scheme to RAS. A fundamental objective of the latter is the provision of accommodation of a good standard.

Chairman

To obtain a complete picture, the committee would like to be provided with a list of the designated officers for each local authority. The list should indicate the department in which each officer works.

Mr. Denis Conlan

Sure.

Deputy Darragh O’Brien

That is crucially important. The list should include information relating to the amount of funding per local authority per year, the name or names of designated staff members and the number of inspections made by each local authority. At that point we will be able to ascertain whether this is merely being subsumed into an overall budget and whether mere lip-service is being paid. We should also be able to identify the local authorities taking action in respect of this matter.

When quarterly returns are submitted, what procedure is followed? Does the Department of the Environment, Heritage and Local Government compare these returns to those for the previous quarter or the previous year?

Mr. Denis Conlan

We hold quarterly meetings with the directors of service and the issue of accommodation standards is regularly raised with them. We can gauge progress from the returns received. It must be acknowledged that there are limits to the extent to which the Department can exercise what might virtually be an inspection role with regard to local authorities. Although some people might say we are not doing this quickly enough, it is Government policy to move towards a more delegated approach to local government.

Deputy Darragh O’Brien

I appreciate that.

Mr. Denis Conlan

Local authorities are on a statutory footing so we must proceed, to a certain degree, on the basis that they carry responsibility. It is the case, therefore, that the responsibility rests at local level. Local authority management has been significantly upgraded in recent years with the advent of Better Local Government - A Programme for Change. There is now a strong management structure in local authorities. I am not saying the Deputy is suggesting this but we cannot return to the days when local authorities were responsible for inspecting everything. We have a reasonably good process of engagement with the local authorities via the CCMA.

I take the points made regarding engagement with housing practitioners. To some extent, we feel we have done this at the annual meetings with them. However, we will take serious account of the views of members of the committee in respect of the need for a specific gathering of local authority representatives and staff on this issue of standards.

Deputy Darragh O’Brien

I appreciate that. I know it is not easy, particularly when one takes account of the need to deal with a number of different agencies and Departments. On the overall housing issue and as stated earlier, it emerged a couple of weeks ago that there are almost 6,000 vacant social housing units. The Department only liaises once a year and returns are only made on an annual basis. No one is responsible for contacting the local authorities to discover why houses remain vacant for nine months. I am not confident the Department of the Environment, Heritage and Local Government is being sufficiently tough with the local authorities.

The position in respect of under spending on social housing is similar. In Fingal, the area in which I live, the council - which has a budget of €32 million - under spent by €12 million. I accept this is a separate issue. I fully appreciate the need to extend democracy into local government and the fact that the Department must delegate to local authorities. The Department has an important role in overseeing this process and ensuring that annual reports are not merely compiled to show that improvements have been made. Unless people see evidence of such improvements, reports are not worth the paper on which they are written. I suggest that instead of holding a one-off gathering, meetings should be held relatively regularly - be it on a quarterly basis or whatever.

I apologise if this question has already been asked but, in the context of the PRTB, it was indicated on the previous occasion on which our guests came before us that the turnaround for dealing with complaints from tenants was somewhere in the region of six months. Is that still the case?

Ms Margaret Taheny-Moore

Yes. However, with the additional staff that will be appointed and the implementation of the ICT strategy, we hope improvements will be made regarding the time it takes to process complaints.

Deputy Darragh O’Brien

Has the PRTB set a benchmark in this regard?

Ms Margaret Taheny-Moore

Every case is different.

Deputy Darragh O’Brien

I understand that.

Ms Margaret Taheny-Moore

Ms Ward referred to this at a previous meeting of the committee. When an application is received, it may be incomplete - for example, it may not contain details of the person's address or other information may be missing - so it is necessary to write to the tenant--

Deputy Darragh O’Brien

I was referring to instances where complaints are received from tenants in respect of their landlords.

Ms Margaret Taheny-Moore

Yes, but the information provided may be incomplete.

Deputy Darragh O’Brien

That would be in the minority of cases.

Ms Margaret Taheny-Moore

Yes. Landlords must be notified in writing of complaints received. A landlord may wish to provide evidence or material of some other kind. All the correspondence must be copied to both parties and we then assign the case to an adjudicator. Before this happens, the landlord and tenant will be asked if they wish the matter to proceed to mediation or adjudication and they can make a choice on that. Depending on the option chosen, we then appoint a mediator or an adjudicator to hear the case.

Deputy Darragh O’Brien

I appreciate that each case is different. Some 14 additional staff have been appointed this year.

Ms Margaret Taheny-Moore

We are only in the process of recruiting those staff.

Deputy Darragh O’Brien

Each case is different but the PRTB must have identified a turnaround time it wishes to achieve. A six-month turnaround time is not acceptable, particularly for a tenant who is finds himself or herself in difficult circumstances and who makes a complaint against a landlord. The situation must be serious for a tenant to approach the PRTB. What sort of turnaround time does the PRTB wish to achieve? Will any of the 14 additional staff deal specifically with the complaints process?

Ms Margaret Taheny-Moore

It is intended that quite a number of the new staff will be appointed to the disputes side of the PRTB. The board would aspire to reducing the turnaround time to three months. Certain cases will be dealt with much quicker, particularly in respect of serious anti-social behaviour or illegal eviction. These can be dealt with in a matter of days.

Deputy Darragh O’Brien

However, six months is the average time for dealing with complaints.

Ms Margaret Taheny-Moore

Yes. We hope to halve that. It is difficult to say what will happen until we are up and running with the full complement of staff. Our aim is to reduce it to three months.

Ms Kathryn Ward

Three to four months is the goal. However, we are talking about straightforward cases where all of the details and information is available and where both parties are seeking a resolution. In such circumstances, both parties will respond, take up the offer and be satisfied with the recommendations put forward. Unfortunately, we receive a huge number of complaints in respect of which parties do not engage with our process. This causes delays. Either we are not provided with the information we require or the necessary documentation is not supplied. Every case is different and many of them can be complex.

There are constraints within the Act with regard to notice periods, and so on. One must also allow for appeals and tribunals and their outcome. There is also the issue of enforcement. While we would like to arrive at a situation where every complaint could be dealt with within a period of three to six months from start to finish, that will not happen in all cases.

Deputy Darragh O’Brien

I am not suggesting that every complaint could be dealt with within the time period. Every Department and business will have a benchmark and turnaround time to which they aspire when dealing with customer complaints and queries. I am talking about an average time. Therefore, if the average is currently six months---

Ms Margaret Taheny-Moore

We are examining our corporate plan, deciding on targets and looking at strategies to cut down our processing times. We also have examined the Act to see its requirements on processing times and the specific time periods for dealing with issues from when applications are received. We are looking at how issues are currently processed in the dispute resolution system.

Deputy Darragh O’Brien

I am glad to hear that. I know the board cannot work miracles, but I am glad it is examining its corporate plan. The board has 14 extra staff and many of those will deal with complaints. I would like to see a benchmark time tied into the corporate policy so that the board has a target.

Ms Margaret Taheny-Moore

It has.

Deputy Darragh O’Brien

The board must have a specific timeframe, but not three to four months. We cannot have a moveable feast. The board must state that it wants its average to be reduced from six to three months or six to four months, and by when.

Ms Margaret Taheny-Moore

We will set targets for the corporate plan and hope to have the plan finalised by the end of July.

Chairman

Allow me put a simple question before I bring in Deputy Shortall. If there is mayhem in a rented house next door to me, can I phone the board and get the name of the landlord if the property is registered so that I can communicate directly with the landlord?

Ms Kathryn Ward

No, but if a person wrote to us, we could provide the information. We would not give those details over the phone because we would not know to whom we were providing the information. However, if people write to us and set out where they live and explain the issue, they are entitled to get the name of the landlord. One of the requirements of the Act, before a third party submits a case, is that the third party must have made some effort to discuss the issue with either the tenants or with the landlord. Before people submit a case to us, they must have taken some of those actions. We would be able, therefore, to provide a name and address, but we would not do so over the phone.

Deputy Róisín Shortall

I thank our visitors for their presentations. There is a significant amount on the agenda today. Besides examining the Private Residential Tenancies Board, PRTB, and the past three years' accounts, our primary function is to examine the taxation and sources of rental income.

With regard to the five principal sources of information on rental income, will the Revenue give the committee an up-to-date position on its performance in that area? What kind of information does it have and what cross-checking has it done to ensure tax compliance? Has the Revenue up-to-date figures on the claims for tax relief on rent and what cross-checks have been made to ensure compliance by the landlords concerned?

Ms Josephine Feehily

The figures on the number of claims are the figures I provided to Deputy Fleming.

Deputy Róisín Shortall

That was 236,000. I have that figure.

Ms Josephine Feehily

It was 248,000 for 2007.

Deputy Róisín Shortall

What checks were made on those in terms of tax compliance?

Ms Josephine Feehily

Our risk analysis system is based on a great deal of information coming together. It has within it a lot of knowledge and knowledge-based rules and it approaches the information in the database by firing rules and by giving taxpayers, in this case landlords, a risk rating. Into that risk-rating system go all the claims from these 248,000 people. If there is a match within the system that shows that rent has been returned, those landlords will not come to the top of the list.

The risk analysis system is designed to weed out the exceptions, that is, where the matching does not work or where there is an inconsistency between the return from the taxpayer and the other information we have, such as tax credits information, stamp duty information and the various other sources mentioned. They all feed into a single risk-rating system. I could not say to the Deputy that a particular piece of information gives us a particular result.

Deputy Róisín Shortall

Can Ms Feehily not tell members specifically the outcome of the risk analysis with regard to the returns Revenue receives from people who claim tax relief on rent?

Ms Josephine Feehily

It is a composite system. I cannot disaggregate each of the sources of information and say this source led to this risk outcome or that source led to another risk outcome. All the sources go together to give us a risk rating for a taxpayer.

Deputy Róisín Shortall

What are the numbers involved with regard to stamp duty payments by investors?

Ms Josephine Feehily

I do not have the number with me with regard to how many there are or how many properties were bought, but they are all in the system. For example, if an investor has bought a number of properties, that information is fed into our risk system. The stamp duty particulars delivered form requires a personal public service number, so that will be in the system. Then, if rental income is reported from the tax credit claims by tenants, that will also be in the system. If the particular person sends in, for example, a form 12 reporting only PAYE income, clearly there is a mismatch and that will give a risk rating. However, I cannot disaggregate which source of information gives the risk rating in that way. It is a composite risk-rating system that is based on a substantial number of pieces of information, not just the property information but information about whether tax is paid on time or the person is a persistent late payer or filer. Significant information comes together within the system.

Deputy Róisín Shortall

From our point of view in trying to get a handle on what happens in respect of rental income, it is not satisfactory if Ms Feehily cannot provide that kind of breakdown. Perhaps we should just go through the other sources of income and she can give us the numbers involved and provide us with the overall risk rating associated with rental income.

Ms Josephine Feehily

The risk rating is associated with the taxpayer, but perhaps I am not making that clear. We risk rate a taxpayer, not a source of income. Our focus at all times is on collecting the right amount of tax from a taxpayer, regardless of how many sources of income he or she may have. As I said in my opening remarks, quite often rental income is a subset of all other sources of income. For example, some shopkeepers have rental income, some large commercial entities have rental income and the people I identified, who label their primary business as being the letting of property, have rental income.

We come at the situation from the point of view of what we know about the taxpayer. We want to know when we look at what we know through the risk analysis system what that tells us about the taxpayer's compliance. I cannot, therefore, trace it back to one source of income for the Deputy.

Deputy Róisín Shortall

That is fair enough. The committee, however, comes at it from the point of view of rental income and what is happening with regard to the taxation of rental income. It is not very satisfactory if Ms Feehily cannot respond to our questions in that regard.

Ms Josephine Feehily

I can give the Deputy some examples based on individual projects and perhaps Mr. Gillanders can discuss the issue further. The examples I can give concern individual projects we carried out with the rent supplement information. They are only projects, however. Our approach is all about identifying a taxpayer and identifying deficiencies in the taxpayer's performance. I would not want to mislead the committee but we could never commit on an ongoing basis to being able to track individual sources of income from the vast sources of income that are there, not just with regard to property, and say a particular source of income is a risk as opposed to another. It is the taxpayer and his or her behaviour and failure to pay or not pay that is the risk.

Deputy Róisín Shortall

Perhaps Ms Feehily would share the up-to-date information she has with regard to the other sources of information with members now, for example, rent supplement. How many landlords for whom Revenue has information are in receipt of rent supplement?

Ms Josephine Feehily

We have been provided with the 95,000 rent supplement details from the Department of Social and Family Affairs.

Deputy Róisín Shortall

Is that the figure for the current year or last year?

Ms Josephine Feehily

It is the information for 2006.

Deputy Róisín Shortall

Is the information for 2007 available?

Ms Josephine Feehily

The 2007 information is coming later this year.

Deputy Róisín Shortall

We are nearly half way into 2008.

Ms Josephine Feehily

Just to be clear, the 2007 information is only relevant to us when the 2007 tax returns are due and they are due on 31 October or in the middle of November for those who file using the ROS. The focus for 2007 data is the end of 2008. The 2006 data is connected with the 2007 tax returns which came in at the end of last year and will be in our 2008 audit programme. This is why the time lag arises. It is inherent in the self-assessment tax system.

Deputy Róisín Shortall

The Department has that information from 2007. There is no time lag.

Ms Josephine Feehily

I understand that but we want them to give us that information with PPS numbers. The discussions we have had between us is about getting that information in a better state later this year.

Deputy Róisín Shortall

I appreciate that; I am just wondering what information is available to Revenue at this point.

What information has been received from the PRTB about the number of landlords?

Ms Josephine Feehily

The information from the PRTB is information we access on a case-by-case basis. Since January 2008 we have accessed 52 cases where we have requested information from the PRTB.

Deputy Róisín Shortall

Another speaker referred to the fact that Ms Feehily's predecessor said he would like to get his hands on the PRTB register. I presume every year the Revenue Commissioners make recommendations to the Minister on changes required in the Finance Bill. If it is important from Revenue's point of view to ensure compliance, what steps has it taken to request that the PRTB register be made available to Revenue?

Ms Josephine Feehily

I have already had preliminary discussions with the Department of Finance about it. As I said in my opening remarks, I am developing the proposal and will be putting it to the Department.

Deputy Róisín Shortall

Was any action taken in this area by Ms Feehily's predecessor?

Ms Josephine Feehily

I would not be in a position to say.

Deputy Róisín Shortall

This has been an issue for some time and not just in the past few months.

Ms Josephine Feehily

What I meant was I would not be in a position to know whether he had discussions with the Department of Finance. Obviously I would know if there was an official request in a formal sense and I can confirm there was not.

Chairman

In order to get an answer to Deputy Shortall's question, has the Department of Finance any records of any approaches by Revenue prior to the appointment of the new Chairman?

Mr. Paddy Barry

I am aware of the discussions to which the chairman of the Revenue Commissioners has referred. I would have to check our records for any specific formal correspondence on the topic.

Chairman

It is a significant point which has been raised by Deputy Shortall. I ask both parties to check their records to see what has happened over the past number of years with respect to this key issue.

Ms Josephine Feehily

I wish to add one other piece of information. The connection between rental tax relief, tax relief on interest on rental properties and the PRTB data, was made in the 2006 Finance Bill so the whole piece is quite recent.

Deputy Róisín Shortall

It is not a recent occurrence that there has been an explosion in the private rented sector and it is not recent that there have been suspicions of fairly widespread tax evasion with regard to rental income. We have a right to expect that Revenue would have been proactive in this area a number of years ago and would have sought the powers required to gain access to the important information.

Ms Josephine Feehily

In the context of the initial PRTB legislation, there was some discussion about the extent of access of information between Revenue and the PRTB. At that time the Revenue powers group was sitting and it was considered that the powers group might take a view about whether it was appropriate for us to have automatic access to information in general. That was one of the considerations at the time that I noticed when I was reviewing the file for this meeting. That may also have been part of the rationale for waiting until there was a database for us to get. I have already had preliminary discussions with the Department of Finance and the committee can rest assured I will be putting something to the Department.

Deputy Róisín Shortall

I think it is important to find out what has happened up to now and I ask Ms Feehily to supply us with that information.

The other source of information is the rental accommodation scheme. What information has Revenue received about this?

Ms Josephine Feehily

This is just starting to come in. As was noted in the Comptroller and Auditor General's report, the first year's information we received was not in a format we could use. This year we are receiving information and we are satisfied it will be in a format we can use.

Deputy Róisín Shortall

Overall and in respect of rental income across all the different schemes and the ordinary private rental sector, can the delegation give us some indication of what the risk rating is in respect of tax compliance?

Ms Josephine Feehily

I will ask Mr. Gillanders to speak about that. We have some data on the risk rating in respect of people in the landlord sector.

Mr. Norman Gillanders

During last year we put togethera team of people to specifically work some of this third party information from start to finish. I would take some comfort from the work they have done.

We began looking at 50 high value and apparently high risk cases that automatically matched from the rent supplements to our own database. Five of those 50 cases were PAYE people. These 50 cases received rent supplements from the Department of Social and Family Affairs, ranging from €90,000 to €450,000. Thirty nine of these cases passed rigorous credibility checks.

There is quite a bit of work involved in this because we have to consolidate the rent supplement information per landlord - because there are not 95,000 landlords. We then must go back to the relevant years to try and link the rent supplement to the tax years and then find all the tax returns, if any, for the cases and-or their spouses and check whether they have been returned through the PAYE system or through the Schedule D system. This is not work that can be easily automated as there is a large element of human judgment involved. Of that 50, a total of 39 cases came through, having gone through that fairly rigorous credibility process.

Two cases we investigated had no tax issues; three of those cases have indicated they will be settling with us and six cases are in discussion with us. This is about an 82% compliance rate from what we regarded as fairly high risk cases because of the value and some other features of the cases.

Deputy Róisín Shortall

Were all of those landlords in receipt of rent supplement?

Mr. Norman Gillanders

Yes.

Deputy Róisín Shortall

So Revenue would expect them to be in the system, as it were?

Mr. Norman Gillanders

It was interesting that they all were in the system and this is part of the value of the information. We did another 115 cases that failed to match automatically. All of them did match when we manually examined them against our various tax records. Seven of those were PAYE and 102 of them passed the credibility checks. One of these cases may be suitable for prosecution which was a good outcome from our point of view. Two of the cases remaining have no tax issues and that leaves us with ten ongoing investigations.

It is perhaps worth mentioning that the REAP system risk rates everything we know about a taxpayer, using about 170 rules and everything that is on our tax database, in what we call the data warehouse. I think there are strong incentives for compliance in the system, as Deputy Fleming remarked earlier. Much of the property that has been developed in the country in the past 20 years carries very attractive tax reliefs. There is a strong incentive there towards legitimacy because if one is not in, in terms of tax compliance, one cannot claim the tax benefits.

We have analysed the cases in our tax database and we found that in many of the cases we can identify rental income as being their primary source of income. For example, of 49,000 landlord cases analysed in the risk rating system, only 1,500 of those were in the highest decile of risk. The distribution of those cases was generally lower down the scale of risk, which would give us cause for some comfort in terms of where landlords are.

Deputy Róisín Shortall

Have the Revenue Commissioners carried out any kind of exercise on a random group of landlords, apart from those who are in receipt of rent supplement?

Mr. Norman Gillanders

The rent supplement exercise was a fairly random examination of the--

Deputy Róisín Shortall

I am not sure that is the case.

Mr. Norman Gillanders

Yes.

Deputy Róisín Shortall

It seems that part of the reason tenants find it difficult to get a landlord who will accept rent supplement is because of the perception among landlords that if they accept rent supplement, records will be kept.

Mr. Norman Gillanders

Yes.

Deputy Róisín Shortall

I would be interested to know what the Revenue Commissioners are doing in respect of landlords who are outside the rent supplement scheme.

Mr. Norman Gillanders

They are liable to be examined under the normal audit programme, in which people are targeted on the basis of risk, as well as under the random audit programme.

Deputy Róisín Shortall

Would it not be more informative, from the point of view of the Revenue Commissioners, to engage in an exercise whereby 50 or 100 landlords are examined to ascertain the extent to which they are tax compliant? I suggest that landlords whose details have been returned by tenants who are claiming tax relief could be studied, for example. Would that not give the Revenue Commissioners a better picture of what is happening in the private rented sector?

Mr. Norman Gillanders

The Wicklow project, which involved an examination of 30 landlords, was developed on the basis of the risk analysis system of the Revenue Commissioners.

Deputy Róisín Shortall

A small sample was used in that case.

Mr. Norman Gillanders

It all points in the same direction. Wherever we have looked recently, we have seen reassuringly high rates of compliance on the part of the landlord sector. Some 170 rules are taken into account as landlords are distributed in our risk profiling system. It is very complicated. Our tax information, which goes back over a four-year period, is refreshed for all taxes three times a year. It includes information on stamp duty, capital gains tax and rent supplement. Rent credit claims are matched against individual landlords. Our comprehensive system is telling us that landlords are not over-represented in the highest deciles of risk. We need to bear in mind what we are up against. There is an opportunity cost for our audit programme. A well-targeted audit typically brings in between €40,000 and €50,000. The random audit programme brings in an average of €3,000. I am giving these figures off the top of my head. The opportunity cost of poor targeting is very high.

Deputy Róisín Shortall

Okay.

Mr. Norman Gillanders

The whole point of the risk analysis system, in which we have invested huge amounts of money, is to improve targeting. Poor targeting imposes a huge opportunity cost on us in terms of the recovery of tax per intervention.

Deputy Róisín Shortall

Okay.

Mr. Norman Gillanders

I have already staked my shirt on the accuracy of the risk analysis system of the Revenue Commissioners. I am confident that we are pursuing an objective, evidence-based and factual approach to compliance work.

Deputy Róisín Shortall

I would be much more confident if the Revenue Commissioners were able to gain access to the register maintained by the Private Residential Tenancies Board.

Mr. Norman Gillanders

We have to get that.

Deputy Róisín Shortall

The Revenue Commissioners should be able to do spot-checks on the basis of the register. That is the key to it.

Chairman

Is there anything to prevent the Revenue Commissioners from contacting the Private Residential Tenancies Board to get 30 files, to be examined on a case-by-case basis? Could such a semi-targeted exercise be undertaken?

Deputy Róisín Shortall

They should be taking a random sample of 50 or 100 cases.

Chairman

That is what I mean.

Ms Josephine Feehily

Under the law, we have to ask for a specified case. It is the same idea that was mentioned earlier. If a member of the public wants access, he or she must give a reason. One must have the case information. The law in this area was designed in that fashion. Our access is restricted to cases in which we have a reason for asking.

Deputy Róisín Shortall

Okay.

Ms Josephine Feehily

I completely take the Deputy's point. We are happy to commit to asking our colleagues in the Department of Finance for access to the Private Residential Tenancies Board's data as long as that data is suitable for a random project.

Deputy Róisín Shortall

Do the Revenue Commissioners hope to be given that access in next year's Finance Bill?

Ms Josephine Feehily

I cannot disagree with my predecessor, who said he would love to have such access.

Deputy Róisín Shortall

There is a difference between having a desire to get access and taking action to get access. I assume the Revenue Commissioners intend to pursue the matter.

Ms Josephine Feehily

We will bring a proposal to the Department of Finance.

Deputy Róisín Shortall

I will move on to the Department of Social and Family Affairs. The Secretary General and the Minister have indicated that taxation of rental income has nothing to do with them. They believe the role of the Department is restricted to providing income and housing support to clients, and that the other matters have nothing to do with the Department. Does Ms Lacey accept that it is not good enough that such an attitude is being taken by a Department which is transferring €420 million of taxpayers' money into the pockets of landlords? The Department should be facilitating the implementation of the law on tax compliance and the requirement on landlords to register with the Private Residential Tenancies Board. It needs to play a role in enabling the Revenue Commissioners and the Private Residential Tenancies Board to do their work.

Ms Bernadette Lacey

I maintain that we are facilitating the work of both agencies. We provide information on a quarterly basis to the Private Residential Tenancies Board about new tenancies in respect of which rent supplement is being provided. Until last year we had been giving information, such as the names and addresses of landlords, to the Revenue Commissioners in the manner requested by that body. We have been engaged in discussions with the Revenue Commissioners over recent months about how we might acquire the additional information that is needed. We are amending our computer system to enable it to take and store the personal public service numbers of landlords. We will write to landlords to ask them for such numbers. If a landlord provides his or her number, that information will be passed to the Revenue Commissioners. If he or she does not do so, we will tell the Revenue Commissioners that the information has not been made available. The Revenue Commissioners will then be in a position to take that fact into consideration as part of their risk assessment. It will affect the likelihood of a landlord coming up for review.

Deputy Róisín Shortall

Given the large amount of money that is being spent on rent supplement payments, it seems extraordinary that landlords did not have to provide their personal public service numbers up to now. Ms Lacey has told this committee previously that legal difficulties are associated with accessing personal public service numbers. I do not understand why that is the case. Deputy Fleming pointed out earlier that the principle of requiring an organisation to get a landlord's personal public service number has been established in the case of the scheme for claiming tax relief on rent. Does that principle not apply in this instance?

Ms Bernadette Lacey

Legislation provides that a personal public service number may be sought by the Department or other authorised agencies. It does not provide that a third party - a private individual - can acquire details of somebody else's personal public service number.

Deputy Róisín Shortall

The legislation may not provide that one can acquire that information, but I do not know where it precludes one from doing it.

Ms Bernadette Lacey

It is not that the legislation precludes one from doing it. The legislation specifies who can acquire the information. It does not specify that an individual can acquire it. I will examine the issue that has arisen today, which relates to the acquisition of personal public service numbers by the Revenue Commissioners. As a result of our discussions with the Revenue Commissioners and the Private Residential Tenancies Board, we are considering whether there are things we can and need to do within primary legislation and whether we need to take action in response to such matters.

I always have a serious concern at the back of my mind about the availability of accommodation for people on rent supplement, which is an issue that was mentioned by Deputy Shortall. Some landlords clearly state that rent supplement clients are not acceptable. We have to be careful not to put additional responsibilities on individuals which would affect them. The approach we intend to take is to write to landlords, after the rent supplement has been applied, to ask for their personal public service numbers.

Deputy Róisín Shortall

I agree with Ms Lacey's summary of the perception among landlords. Why does such a perception exist? Surely the only reason landlords are reluctant to take tenants who are on rent supplement is because they fear that certain information will be passed on to the Revenue Commissioners.

Ms Bernadette Lacey

I accept that is the issue. I am concerned that our attempts to recognise the issue will restrict the access of the tenant, who is the most vulnerable of all parties in these matters, to accommodation.

Deputy Róisín Shortall

Notwithstanding what the officials from the Revenue Commissioners have said, all public representatives are conscious of the difficulties encountered by people on rent supplement when they try to find landlords who are prepared to offer them accommodation.There must be some basis for that perception. We are all very conscious of this issue. What is the difficulty in making it compulsory for tenants to include the PPS number of the landlord on applications for rent supplement?

Ms Bernadette Lacey

Our application forms will provide for the PPS number to be included at the time the application is made.

Deputy Róisín Shortall

Has the problem been the application form?

Ms Bernadette Lacey

No, until the legislation was changed, under data protection and so on, we could not require the tenant to get information that had nothing to do with the application itself. This information has nothing to do with the transaction between the tenant and the Department. I know this is very difficult for people to understand.

Deputy Róisín Shortall

Exactly the same point can be made about tax relief on rent.

Ms Bernadette Lacey

Tax relief is an issue for the individual, Revenue and landlord whereas rent supplement is an issue between the individual and the Department and has nothing to do with the landlord.

Deputy Róisín Shortall

I will move on to the relationship between the Department and the Private Residential Tenancies Board.

Chairman

Arising from Deputy Shortall's question, I am puzzled as to what action the Department is taking on rent supplement. I asked a question earlier about a form I came across on Friday which did not include a request for a PPS number.

Ms Bernadette Lacey

The form does not have such a request at the moment.

Chairman

Did the Secretary General indicate that the Finance Act 2007 allows the Department to make such a request?

Ms Bernadette Lacey

Yes, it does.

Chairman

Why did the Department not change the form to ask for the PPS number?

Ms Bernadette Lacey

Issues arose in relation to this issue being included in the Act. As the Department was not aware of the measure in advance, we had to take legal advice on these matters. An issue still arises in that we can change the form now to include the name, address and PPS number but we cannot make it a requirement for the tenant to get this information from the landlord. If the landlord refuses to give the information to the tenant--

Chairman

The Department has failed to include a question on the form.

Ms Bernadette Lacey

It has not failed to do so. We have not changed the forms until now because we did not have the capacity. We have to change our IT systems to store the PPS number.

Chairman

The provision was made in the 2007 Finance Act, which was passed in February 2007. It is now 2008.

Ms Bernadette Lacey

As I explained, the Department was not made aware of the issue in advance. We then had to put it on our schedule of developments. We have several different developments on our IT systems.

Chairman

It takes more than one year to change a form to allow a PPS number to be included on it.

Ms Bernadette Lacey

No, it is to change an IT system.

Chairman

It takes more than a year.

Ms Bernadette Lacey

Yes, because there were other major projects taking place and to switch would have meant pulling the plug on some of them.

Chairman

What would be more important than getting at tax defaulters?

Ms Bernadette Lacey

It would be more important in that it was to do with the provision of payments to our customers.

Deputy Róisín Shortall

Presumably, it entails providing an additional field for the entries.

Ms Bernadette Lacey

It does, yes.

Deputy Róisín Shortall

Why does that take 14 or 15 months?

Ms Bernadette Lacey

It does not take 14 or 15 months. It takes a certain length of time to get on to the queue of our IT systems and to prioritise within our overall arrangements. We have a reasonably limited resource in which to do IT development.

Chairman

It is incredible that we cannot obtain an explanation as to the reason it would take from February 2007 to May 2008 to insert a field for a PPS number on an application form at local level.

Ms Bernadette Lacey

There was no reason to put it on the application form until we could transfer the system on to a computer system.

Chairman

There is every reason to do so. The law - the Finance Act - says the Department should do so and if we were serious about chasing tax dodgers, we would do so.

Ms Bernadette Lacey

We were applying our resources in the best way we could to deliver services. We were providing the information Revenue had asked us to provide up to that point, that is, the name and address of the landlord. We have subsequently been in discussion with Revenue about the issue of the PPS number.

Chairman

In the first half hour of this meeting I asked the same question about the form I came across last Friday. The answer I received then was that the Department was not allowed to make the change.

Ms Bernadette Lacey

We are not allowed to require the individual to get the information from the landlord. It was in relation to whether we could refuse the rent supplement. We cannot make it a condition of the rent supplement. We can include it on the form and the landlord can choose to fill out the information on the form. If he does not do so, the Department has to write to the landlord when we receive the information.

Deputy Róisín Shortall

The Department could make it a condition of refusing to pay rent supplement in the particular case in question. It is not refusing the client. Just as the Department has the right to refuse to pay rent supplement because accommodation is unsuitable, it can refuse to pay rent supplement because the landlord is not tax compliant or refuses to provide information.

Ms Bernadette Lacey

I appreciate that but the danger is that we would then have people who do not have accommodation. The individuals are looking for accommodation and are already restricted in the number of landlords who will take them on. If we refuse rent supplement in that case, what do we do for the individual looking for the rent supplement?

Deputy Róisín Shortall

That gets back to the point that there is a perception that one can get away without paying tax on rental income provided one stays outside the rent supplement system. It also raises issues about what the Department of the Environment, Heritage and Local Government is doing to meet housing demand and the reason so many people are dependent on rent supplement. While I accept that other agencies have a role to play in this matter, I do not accept that it is all right for a Department to state the issue has nothing to do with it. We would like the Department to play a fuller role in ensuring this exchange of information takes place.

Ms Bernadette Lacey

The Department has been moving in that direction.

Deputy Róisín Shortall

Yes, but it is doing so very slowly. In respect of the information the Department provides to the Private Residential Tenancies Board, what type of information does it receive from the board in response? For example, in how many instances has the Department stopped the payment of rent supplement because a landlord is not registered with the PRTB as he or she is required to be under the law? In how many cases has the Department refused or stopped the payment of rent supplement because the standard of accommodation was inadequate?

Ms Bernadette Lacey

We have not stopped any payments in respect of non-registration with the PRTB. In the case of accommodation standards we have refused 18 payments.

Deputy Róisín Shortall

In what period were the refusals made?

Ms Bernadette Lacey

Over the past year, that is, during 2007.

Deputy Róisín Shortall

This appears to be another example of the hands-off approach being taken by the Department in this area. If the Department receives information that a landlord is not compliant with the law in respect of registration with the PRTB--

Ms Bernadette Lacey

If we received such information, we would stop payment.

Deputy Róisín Shortall

Does the Department receive feedback after it submits details to the PRTB?

Ms Bernadette Lacey

No.

Deputy Róisín Shortall

Surely such feedback is needed. When the PRTB receives quarterly information from the Department does it not check the details provided with its records and register?

Ms Margaret Taheny-Moore

I understand it is not currently a requirement of the rent supplement scheme for a landlord to be registered. When we receive the information we pursue registration. The information on non-registration--

Deputy Róisín Shortall

It is a legal requirement on all landlords to be registered.

Ms Margaret Taheny-Moore

Yes, but in relation to the rent supplement scheme there could be landlords who may be outside our scope. They could rent a room and would not, therefore, be required to register with the board.

Deputy Róisín Shortall

The number availing of the rent a room scheme is small. The PRTB receives information from the Department on landlords to whom it pays rent supplement.

Ms Margaret Taheny-Moore

We use that information to pursue landlords.

Deputy Róisín Shortall

If the PRTB finds that a number of landlords in receipt of rent supplement are not registered, does it relay that information to the Department?

Ms Margaret Taheny-Moore

No, we did that last year at the prosecution stage because we had to make sure the information the Department supplied to us was correct.

Deputy Róisín Shortall

Does that mean the Department of Social and Family Affairs, which is responsible for paying out €420 million per annum in rent supplement has no idea how many of the landlords in receipt of rent supplement are tax compliant or registered with the PRTB, as they are required to be under the law?

Ms Bernadette Lacey

We pass on the information to the Revenue Commissioners and the PRTB. I know it was a small sample taken by the PRTB to examine the registrations. Its outcome was that either 83% were registered at the time of notification or did so following contact from the PRTB.

Deputy Róisín Shortall

What are the waiting times for the dispute resolution service provided by the PRTB?

Ms Margaret Taheny-Moore

It can be up to ten months.

Deputy Róisín Shortall

That is very unsatisfactory.

Ms Margaret Taheny-Moore

It can vary and some cases are processed much earlier. Serious cases of anti-social behaviour or illegal evictions take priority.

Deputy Róisín Shortall

I had a case yesterday where a landlord contacted me. His tenant was in receipt of rent supplement but it was withdrawn. The tenant did not pay rent for the past three months. The landlord sought the PRTB's assistance in the case but was informed it would be a year before the board could take action.

Ms Margaret Taheny-Moore

With the additional staffing we have received and the ICT strategy being developed, we hope staff working on our registration side will be able to divert more resources to the dispute side of the service.

Deputy Brendan Kenneally took the Chair.

Deputy Róisín Shortall

Can the Department give a figure for the number of landlords in receipt of income from rent supplement?

Ms Bernadette Lacey

There are approximately 20,000 landlords whose tenants are in receipt of rent supplement.

Deputy Róisín Shortall

How many tenancies does that represent?

Ms Bernadette Lacey

It is 95,000 tenancies overall. It is difficult to pin down the exact number because people are in and out of tenancies during the year. There would be approximately 60,000 tenants at any one time.

Deputy Thomas P. Broughan

The Revenue Commissioners gave interesting figures for 2006 that the total rental income for 103,000 reporting landlords was €3.6 billion. Are there figures for 2003 to 2005, inclusive?

Ms Josephine Feehily

I have the figures for 2005. I will see if we have them for earlier years and will write to the committee. The corresponding figure for 2005 is €3.1 billion for 100,800 individuals. The number of individuals went up marginally, some 2,000, while the amount of money went up by €500 million. I will do my best to get the figures for the other years referred to by the Deputy and send them to the committee.

Deputy Thomas P. Broughan

Were all 2006 income tax returns profiled under the risk evaluation analysis system?

Ms Josephine Feehily

Yes.

Deputy Thomas P. Broughan

Is it completed?

Ms Josephine Feehily

The 2006 income tax returns - unless they came in late - that we received in October and November last, are in our risk analysis system. We run the system several times a year. The next run is later this month. In between runs, we add new data we receive. The data is in the risk analysis now and is featuring in this year's audit programme.

Deputy Thomas P. Broughan

Over the past four years, how many landlords have appeared on the tax defaulters list or have been prosecuted?

Ms Josephine Feehily

I do not have the tax defaulters list with me. However, in the recent past we have had three successful convictions against landlords for failing to declare rental income. The first was in the middle of 2007, the second was late in 2007 and sentencing was in March 2008 and the third was at the end of March 2008.

Deputy Thomas P. Broughan

There may be up to 50,000 individuals who may have a tax liability for rental income but there have only been three convictions.

Ms Josephine Feehily

I do not know where we would have the 50,000 landlords with a tax liability.

Deputy Thomas P. Broughan

If two thirds of landlords are registered with the PRTB, does that mean there are up to 50,000 landlords not registered?

Ms Josephine Feehily

They may not be registered with the PRTB. However, we cannot conclude that they have not paid taxes due. As I said in my opening statement, which Mr. Norman Gillanders reinforced, the incentives in the system to register to claim tax benefits are very strong. One can be fully compliant and have a modest tax liability for a rental property if one avails of all available reliefs such as mortgage interest relief, capital allowances and so forth. I cannot accept the Deputy's conclusion.

Deputy Thomas P. Broughan

Could Ms Feehily say the tax liability for everyone who availed of a section 50 tax break for student accommodation is correctly ascertained?

Ms Josephine Feehily

I could not say that about any individual scheme or taxpayer with a 100% conviction. Our entire philosophy is about approaching cases on the basis of risk. The riskiest cases are audited. The committee will be aware of the approach to compliance checks and audits. We operate a self-assessment system and we check a proportion of cases. I can never say everyone is fully compliant.

Deputy Thomas P. Broughan

Has Revenue examined it on the basis of schemes? Has Revenue evaluated the risks for various sections of the Finance Bills, such as section 50 and section 23 incentives? There are people who took advantage of particular schemes.

Ms Josephine Feehily

Our current way of working is to do many sectorial projects. They are small like the Wicklow one but they give us indicators. We are doing projects on section 50 schemes. I am not sure about section 23 schemes.

Deputy Thomas P. Broughan

There seems to be scope for such examinations.

Ms Josephine Feehily

Yes. It gives us indicators which inform the rule in our risk analysis system. While it does not give the degree of certainty sought by the Deputy, it gives some certainty on compliance rates.

Deputy Thomas P. Broughan

Does Revenue have a view on the PAYE sector, as a significant number of PAYE workers may have rental income? Should there be more stringent requirements on tax returns? Is it time to examine the PAYE sector differently?

Ms Josephine Feehily

It probably is and Mr. Frank Daly referred to it during his last appearance at the committee. The PAYE sector used to be very self-contained, with consistent income. Nowadays there are far fewer ordinary - if the committee will excuse the phrase - PAYE taxpayers, between rental income, BES and so on. We ask a proportion of the PAYE taxpayer base to send in returns every year. Anybody with another source of income is supposed to send in a return, under the self-assessment principle. However, we believe more attention needs to be paid to the PAYE sector and we will be doing that.

Deputy Thomas P. Broughan

Has Revenue a global estimate, even based on the 2006 figures, regarding the reprocess in relation to the amount of potential tax evasion that exists for rental accommodation income? Has a global figure been extracted which we can examine as a straightforward problem of tax evasion - in terms of amounts based on the 2006 analysis?

Ms Josephine Feehily

As I stated at the outset, I am not sure. I do not want to mislead the committee by saying I can get some information. Given that we focus on the taxpayer, it is a question of which piece of his or her income gives rise to a default or a settlement, even in the cases we can identify.

Deputy Thomas P. Broughan

Ms Feehily and her predecessor have come to committee after committee and said there was so much tax outstanding etc., without having a clue whether there was with regard to rental income. That is the upshot of our discussions over the last period in relation to this chapter of the Comptroller and Auditor General's report. We were looking at a big grey area - a black area, perhaps, in economic terms. In her last report Ms Feehily said Revenue was steadily reducing the amounts of tax outstanding. However, is there not a broad indication from what we are now finding that significant amounts of money were being evaded, and that this should have been included in her estimates of outstanding tax revenue in her report to the Comptroller and Auditor General?

Mr. John Purcell

I believe we are talking about two different things.

Ms Josephine Feehily

Yes, we are at cross purposes.

Mr. John Purcell

The amount of tax outstanding is the amount of tax on the Revenue books. Clearly, it does not know what might be outstanding. Part of the reason for my recommendation that there should be random audits was to get a handle on what might be outstanding over and above what is outstanding on the books of Revenue.

Deputy Thomas P. Broughan

Going back before the Finance Act 2007, in respect of either the Comptroller and Auditor General or the chairman of the Revenue Commissioners, we simply did not have even basic information before the attempt to enforce the rule regarding PPS. Does this mean that all the tax which was effectively foregone is now lost to the Exchequer forever?

Ms Josephine Feehily

I suppose there are two parts to that question. Since we got the information, we have not found major indicators regarding non-compliance and as Mr. Norman Gillanders said in his remarks earlier, we take some comfort from that. I do not believe we can conclude that the absence of information meant there was evasion. When we got the information, matched it, and when we look at the individual pieces of work and the cases that were done, as described by Mr. Gillanders, we come down to a rate of compliance that is not out of line with the other sectors, and that is significant.

When we audit a case, it often happens that any settlement will include tax for preceding years, so it is therefore not lost for all time. Revenue has had a strategy for many years of acquiring third party information and using it with the PPS number as the key piece with which to build a picture so that we know as much about the individual taxpayer as, perhaps, he or she knows. That is the only sensible way to approach this. Otherwise, we should have to go back to a situation pre-1988, where nothing was on a self-administrative basis. In terms of tax administration that is neither best international practice nor efficient or sensible.

Deputy Thomas P. Broughan

In respect of the 60% of records that are not matched, as indicated in Ms Feehily's report, what is being done to try and address that issue?

Ms Josephine Feehily

Perhaps the Deputy was not here at the time, when I indicated that initially the percentage of matched records was 41%. As a result of the work we have done it is now 65%. Working through, trying various rules and new approaches, for example, as I said earlier, a telephone number came to be a critical piece of information and that got us up 12 more points. We are continuing to try, between variations in names and addresses, phone numbers and any other common denominators we can find. When we begin to get the information from the Department of Social and Family Affairs, with PPS numbers, we shall back check, and see whether we can pick up last year's data and match that. Therefore, we are not abandoning it, and the data are available within our integrated business intelligence system, so that when an auditor is auditing a case, he or she can access them on a case basis.

Deputy Thomas P. Broughan

I have a final question on the PRTB, accounts, regarding any figures or percentages Revenue may have on the number of landlords who live abroad. Issues were raised with regard to the difficulties tenants had. My colleague, Deputy Ciarán Lynch, raised it in Dáil Éireann, in connection with tenants being responsible for rent and so on. Are there any figures on landlords who live abroad? Is Revenue worried about the licensing process? The IAVI warned that people may legally bypass the PRTB through this licensing process, which is used a good deal in commercial activities between landlords and tenants. These tend, in the main, to be new developments such as the north fringe in my constituency, where licensing is a way to get around the Revenue, with all the implications that entails.

Ms Margaret Taheny-Moore

In response to the first question, some non-resident landlords are registered on our database. I do not have the figures with me, but I can provide them to the committee.

Deputy Thomas P. Broughan

Is Ms Taheny-Moore talking about thousands?

Ms Margaret Taheny-Moore

I cannot judge. I would need to extrapolate that information from the database.

Vice Chairman (Deputy Brendan Kenneally)

Perhaps Ms Taheny-Moore will provide that information to the committee.

Ms Margaret Taheny-Moore

I will do so. To some degree we are concerned about licence agreements. However, if the tenant and the landlord enter into a licence agreement, that is outside our jurisdiction. Where we get a complaint from a tenant, who may not realise that he or she is in a licence agreement, the board will accept this and go behind the licence to establish the type of arrangement that is in place. Every case could be different. We have already taken cases and determined some of them.

Deputy Róisín Shortall

Is there a need to change the legislation to cater for licence arrangements?

Ms Margaret Taheny-Moore

I do not know whether Mr. Conlan can respond on the question of licences not being included previously. It is a different method.

Mr. Denis Conlan

Licence arrangements, as I understand it, can cover a wide range of things. If one stays a night in a bed and breakfast, to take an extreme example, one is in a licence arrangement. The Revenue Commissioners' recommendations were to not include bona fide licences within the scope of the Residential Tenancies Act 2004. As Ms Taheny-Moore says, the board has the jurisdiction to examine critically whether a claim that a licence exists is valid. Simply because a landlord claims a licence arrangement exists does not mean the PRTB has to accept that.

Deputy Róisín Shortall

What is a bona fide licence?

Mr. Denis Conlan

A licence that is actually a licence, rather than something that is claimed to be one.

Deputy Róisín Shortall

To what kind of circumstances is Mr. Conlan referring?

Mr. Denis Conlan

I gave an example of a bed and breakfast type arrangement. A rent-a-room is a licence situation as well, where someone is living in somebody else's house. I am not qualified to speak with legal authority on what is a tenancy, as distinct from a licence, but one of the hallmarks of a tenancy is that the tenant has exclusive occupation of the particular unit of accommodation. That is the type of criterion the PRTB needs to bring to bear in determining whether a claim made by a landlord that a licence rather than a tenancy exists is correct. There are ways. It does not mean that because a landlord says it is a licence the PRTB will accept it is.

Deputy Thomas P. Broughan

However, if the landlord was taking charge of waste management, for example, it could easily be a licence arrangement in effect.

Ms Margaret Taheny-Moore

Not necessarily.

Mr. Denis Conlan

I do not believe so. It comes down to the idea of exclusive occupation of the dwelling, which is key.

Ms Margaret Taheny-Moore

One of the aspects of the licence in the agreements we have seen is that the tenant can be moved from one room to the next. In some cases we have examined, there has not been another apartment within the locality. If it was an apartment or a room, that could happen. It was not appropriate to be--

Deputy Thomas P. Broughan

People are very familiar with licensing in commercial renting, and there are reasons this has developed in commercial area. It would seem to be an anomaly that it has crept into the residential area. Deputy Shortall raised the question of whether it is an area that needs legislative review.

Mr. Denis Conlan

A review of the legislation is proceeding or perhaps being near finalisation at present. I am not sure if the board has considered this.

Ms Margaret Taheny-Moore

The board examines every case put to it. If a tenant comes to us, we will examine behind that agreement.

Vice Chairman

We can include that in our list or recommendations to be examined to ascertain whether legislation is needed. The PRTB chairman's statement suggests that part of the difficulty the board has encountered is that it has been given wrong PPS numbers. How is this happening?

Ms Margaret Taheny-Moore

In regard to incomplete registrations---

Vice Chairman

I was referring to wrong PPS numbers.

Ms Margaret Taheny-Moore

We have a formula where we key in the PPS number. It might be that there are too many digits in the number, which is one reason we would have to send it back. We would call that a wrong number but it does not necessarily mean more than that. The tenant might be on a social welfare scheme. We have noticed in some cases that the tenant might put in the code for the scheme where the PPS number should be. If it was the reference number for some social welfare--

Vice Chairman

So it is not an attempt by people to fraudulently put down a wrong number.

Ms Margaret Taheny-Moore

Not necessarily. It can be confusion. We deal with many non-nationals who are just getting used to filling in forms and what to include. Sometimes they may have a letter from a local authority but they may have a language difficulty in understanding it. They may just fill in what they see on the letter. In many cases, the first two digits would be the same. We have come around to establishing that this is the reason for the difficulty.

Deputy Róisín Shortall

May I ask two brief questions?

Vice Chairman

The Deputy has had a great deal of latitude. Her questions should be very brief.

Deputy Róisín Shortall

Will Ms Lacey confirm that the PPS number is now being requested in all cases?

Ms Bernadette Lacey

I did not say that. I said we must revise the form to do that.

Deputy Róisín Shortall

I thought that had been done.

Ms Bernadette Lacey

No, we are in the process. It is part of--

Deputy Róisín Shortall

When does Ms Lacey expect it to be in place?

Ms Bernadette Lacey

We hope to have the IT systems in place by October, which is about the time we will have it. We will examine other issues with regard to how we can access numbers for ones that are on already.

Deputy Róisín Shortall

In respect of non-resident landlords, given the Department has no system in place at present to deal with withholding tax because its computer system does not provide for that, has the Department considered the possibility of having a paper-based system to withhold the 10%?

Ms Bernadette Lacey

No, we have not. We have raised this issue with Revenue. The issue about withholding tax is a matter it is considering. We will engage with Revenue to see how we can best access this. We are talking about 150 landlords in total.

Deputy Róisín Shortall

The number may be small but there is an important principle. As matters stand, there is no way of capturing non-resident landlord rental income, which is not acceptable. If the numbers are small, why can the Department not do it on the basis of a paper-based system?

Ms Bernadette Lacey

We looked at that. We have been talking to Revenue about this recently. We will consider how we can address it.

Vice Chairman

Has Mr. Purcell any final comments?

Mr. John Purcell

No. The committee has dealt with all aspects of the matters at hand today. It has stressed issues such as the need for joined up thinking on these matters and better co-ordination, and there was another matter about the economy of cash balances, which I suppose is not as important as the others. It only remains for me to say thank you and goodbye.

Vice Chairman

I thank the witnesses for appearing before us today. Is it agreed that the committee now dispose of chapter 3.10 - Aspects of Rental Taxation (Resumed) and note the Private Residential Tenancies Board Accounts 2004-06?

Deputy Róisín Shortall

Is it possible to go into private session to decide how we will deal with this?

Vice Chairman

What we will do is ask the secretariat, based on what was said today, to come forward with a document for us in regard to recommendations. At least we would have a document we could work with. Is that what the Deputy means?

Deputy Róisín Shortall

Yes.

Vice Chairman

It would be part of the reports. We will work it that way, if that is acceptable.

Deputy Róisín Shortall

It would be helpful if the committee could get the confidential advice of the Comptroller and Auditor General on how we proceed with this.

Vice Chairman

Fine. We will go into private session. Is there any other business? I want to agree the agenda for the next meeting on Thursday, 22 May, which is Special Report No. 57 by the Comptroller and Auditor General - Financial Regulator. Is that agreed? Agreed.

The witnesses withdrew.

The committee went into private session at 1.26 p.m. and adjourned at 1.33 p.m. until 10 a.m. on Thursday, 22 May 2008.