Amendments Nos. 6 to 8, inclusive, are related and may be discussed together.
Finance Bill, 1999: Report Stage (Resumed).
I move amendment No. 6:
In page 16, line 33, to delete "£8,400" and substitute "£9,000".
In view of the time constraints I will concentrate on seeking a response to amendment No. 8, which relates to the tax credit which would be provided to widows. A preferential regime, which the Minister was partly responsible for introducing, is already in place but most Members believe young widows are not favourably treated by the tax system and we should provide them with a soft landing in tax terms when they are bereaved but become or continue to be members of the workforce.
In last year's Finance Act I endeavoured to provide a special regime for widows and would have gone further but for the cost. As I pointed out on Committee Stage of that legislation, my predeliction is to head in that direction. Because of my background I feel widows have been discriminated against in a variety of areas and I vowed I would do something about that if I was ever in a position to do so. That predates my entry to Leinster House. However, as I found when examining the matter before my first budget, the difficulty as regards the tax code is that, logically, this must be extended to all lone parents, which builds up a considerable cost. I would have done more in this regard but for that. When the tax credit system is fully introduced I will ensure there is no discrimination.
On a point of information, the income disregard for social welfare payments which applies to lone parents does not apply to widows.
The Minister for Social, Community and Family Affairs would have that information.
Lone parents can retain their full allowance while earning a significant amount of money but that does not apply to widows. I am not sure the logical extension, to which the Minister referred, applies.
I will look at the matter again.
Amendment, by leave, withdrawn.
Amendments Nos. 7 and 8 not moved.
Acting Chairman
Amendments Nos. 9 and 12 are related and may be discussed together.
I move amendment No. 9:
In page 18, line 9, to delete "(a)" and substitute "(i)".
These are technical amendments to section 5 to rectify incorrect references.
Amendment agreed to.
Acting Chairman
Amendments Nos. 10, 11 and 13 are cognate, amendment No. 14 is related, and all may be discussed together.
I move amendment No. 10:
In page 18, line 15, to delete "16" and substitute "18".
This amendment is also in my name. The Minister is accepting the thrust of my Committee Stage arguments.
On Committee Stage I gave an undertaking to consider for Report Stage amendments put down by Deputy McDowell to section 5 which sought to substitute "18 years" for "16 years" in the definition of a "qualifying child" for the purposes of section 462 of the Taxes Consolidation Act, 1997. This section provides for an additional allowance for widows and other single parents. To qualify for an additional allowance a qualifying child must be under 16 years of age or, if over that age, be receiving full-time instruction at an educational establishment or be permanently incapacitated by reason of mental or physical infirmity from retaining himself or herself and must have become so incapacitated before age 21 or while receiving full time instruction at an educational establishment. Similar age related definitions of a qualifying child are contained in section 465 of that Act, which provides for tax relief in respect of an incapacitated child, and section 469, which provides for relief of health expenses.
The amendments I now propose will change the unconditional age limit of 16 years to 18 years in all three provisions. The references to a child receiving full time education at an educational establishment includes a child undergoing an apprenticeship in a trade or profession, providing full-time training lasts a minimum of two years. I thank the Deputy for making these suggestions on Committee Stage and am glad to be able to accede to them.
Amendment agreed to.
I move amendment No. 11:
In page 18, line 16, to delete "16" and substitute "18".
Amendment agreed to.
I move amendment No. 12:
In page 18, line 46, to delete "(b)" and substitute "(ii)".
Amendment agreed to.
I move amendment No. 13:
In page 20, line 19, to delete "16" and substitute "18".
Amendment agreed to.
I move amendment No. 14:
In page 21, between lines 25 and 26, to insert the following:
"6.–Chapter 1 of Part 15 of the Principal Act is hereby amended—
(a) in section 465, by the substitution, in each place where it occurs, of ‘18 years' for ‘16 years' in paragraphs (a) and (b) of subsection (1) and paragraph (a) of subsection (2), and (b) in section 469, by the substitution in subsection (1), in the definition of ‘dependant', of ‘18 years' for ‘16 years' in each place where it occurs.
Amendment agreed to.
Acting Chairman
Amendments Nos. 15 and 16 are related and may be discussed together.
I move amendment No. 15:
In page 23, line 19, to delete "(I)" and substitute "(i)".
These are technical amendments to section 8 to correct incorrect references.
Amendment agreed to.
I move amendment No. 16:
In page 23, line 22, to delete "(II)" and substitute "(ii)".
Amendment agreed to.
Acting Chairman
Amendments Nos. 17 and 18 are alternatives and may be discussed together.
I move amendment No. 17:
In page 25, to delete lines 6 to 13, and substitute the following:
"making the subscription, being subscriptions that meet either of the following conditions, namely—
(a) the total amount of the subscriptions does not exceed £300,000, or
(b) no amount of the subscriptions, at any time or after the specified return date for the chargeable period for which exemption is first claimed under either subsection (2) or (3), constitutes a subscription made by any one person that is greater than 30 per cent of the total amount of the subscriptions;".
Section 11, which has become known as the "Shane Broderick" section, provides exemptions from income tax, first, for the trustees of trusts established with funds raised by public subscriptions for the benefit of permanently and totally incapacitated individuals, and second, for the incapacitated individuals in respect of payments made by the trustees of such a public subscriptive trust to or for their benefit. In the Finance Bill as initiated I included in the definition of public subscriptions the condition that any one person could not contribute more than 30 per cent of the total subscriptions raised. This limit was set to complement the requirement that the fund be raised by public subscription and also recognised that there may be large individual donations. In the case of a total subscription of £500,000, the limit for a single donation by one person would therefore be £150,000.
In the select committee's examination of the Bill Deputy Noonan and Deputy Deenihan pointed out that there may be cases where, following a public appeal for funds, a single generous donation by a relative or neighbour in entirely bona fide circumstances would rule out tax relief because of the 30 per cent limit. I accepted this point and gave an undertaking to bring forward on Report Stage a suitably framed amendment to remove the 30 per cent limit where total subscriptions raised from the trust fund following a public appeal did not exceed £300,000, a figure which I understand is acceptable to the Deputies. Amendment No. 17 gives effect to that undertaking and I recommend it to the House.
In the circumstances, I presume the Deputies will not press their amendment. Amendment No. 18 is not technically correct. It seeks to disable the 30 per cent rule in respect of funds less than £300,000, whereas the limit is related to the total subscriptions raised rather than the total funds.
Amendment agreed to.
Amendment No. 18 not moved.
I move amendment No. 19:
In page 38, lines 7 to 10, to delete "a dealing member firm of the Irish Stock Exchange" and substitute "an authorised member firm of the Irish Stock Exchange, within the meaning of the Stock Exchange Act, 1995,".
This amendment is required to correct an error in a section included on Committee Stage. The reference to "a dealing member firm of the Irish Stock Exchange" is obsolete and should be replaced with a reference to "an authorised member firm of the Irish Stock Exchange, within the meaning of the Stock Exchange Act, 1995". The latter is the more correct designation of a firm which is a member of the Stock Exchange. An authorised member firm is one which has been authorised by the Central Bank.
Amendment agreed to.
I move amendment No. 20:
In page 42, between lines 42 and 43, to insert the following:
"(8) The Minister for Finance shall lay draft regulations before Dáil Éireann which will regulate the conduct of business by qualifying fund managers and the regulations shall not be made until a resolution approving of the draft has been passed by Dáil Éireann.".
On Committee Stage, when we examined the proposals for pensions the Minister confirmed that while he was taking power to authorise particular financial institutions or providers of pension funds he was not authorising individual fund managers. This amendment requires the Minister to put draft regulations before the Dáil which will regulate the conduct of business by qualifying fund managers.
It is quite important to do so. The Minister will be aware that we received much correspondence on his proposals. He should reflect on what happened in the UK when pensions were liberalised – there was huge mis-selling of pension products and the total fines imposed on the industry by the treasury exceeded £1 billion. The Minister's changes must be put in the context of the Government's decision to appoint the former Deputy, Mr. Michael McDowell, SC, to chair a committee examining the regulation of the financial services sector.
The Minister should look at this again when he gets an opportunity because there was huge abuse in the UK when pensions were liberalised. While he is regulating in respect of the institutions he is not doing so in respect of individuals, nor is he providing anything about the nature of the product.
I do not accept the amendment.
Acting Chairman
As it is now 1.30 p.m. I am required to put the following question in accordance with the order of the Dáil of this day: "That the amendments set down by the Minister for Finance and not disposed of, up to and including amendment No. 28, are hereby agreed to".
Question put and declared carried.
Sitting suspended at 1.30 p.m. and resumed at 2.30 p.m.