Amendment No. 1 has been ruled out of order because it involves a potential charge on the people.
Finance (No. 2) Bill 2013 - Report Stage
Deputy Boyd Richard Barrett will have 13 out of 14 amendments ruled out of order.
Deputy Richard Boyd Barrett has proposed that reliefs for employment grants and subsidies paid to employers who participate in the JobsPlus scheme be paid only where the employer's annual net profits are over €250,000. These amendments involve a potential charge on the people and, accordingly, must be ruled out of order in accordance with Standing Order 155(3).
Will we still get to discuss the section?
We get to discuss the amendments only.
Deputy Richard Boyd Barrett will get lucky later.
Amendment No. 1 not moved.
I move amendment No. 2:
In page 9, between lines 34 and 35, to insert the following:
“(c) which is a newly built property, previously unoccupied, but has been acquired by the individual for the purposes of occupation by the individual as his or her only or main residence on completion of the qualifying work and which is so occupied upon completion;”.
I do not propose to accept this amendment. There are two elements to the definition of qualifying residence, the first of which is that the residence is owned and occupied by the individual as his or her principal private residence. The second element concerns a property which has previously been occupied as a residence. Where such a property is acquired for the purposes of occupation by an individual as his or her principal private residence and is occupied on completion of qualified work, it comes within the definition of qualifying residence. The proposed amendment seeks to bring newly built houses within the incentive.
I have a few points to make on this. First, the incentive is specifically aimed at repair, renovation and improvement works. This is to facilitate home owners to carry out such works to their homes and at the same time act as a stimulus to the construction industry. In general, the only instance in which a newly built house would require works to be carried out would be for the fitting out of such a house to make it habitable. Fitting out is obviously an intrinsic and essential feature of building a new home and inclusion of that type of work in the incentive would constitute dead weight and would not provide an added stimulus to the construction industry. Further consideration has been given to the proposed amendment since Committee Stage, but it has been decided that the relief will not be extended further to include newly built homes, as proposed by Deputy Doherty on Committee Stage and again today.
The Minister understands the purpose of and the spirit behind the amendment as we discussed the issue at length on Committee Stage. It is not intended to bring within the scope of the Bill newly constructed houses that have not been fitted out or to allow buyers to avail of this tax relief to finish off those houses. The Minister of State spoke about "dead weight" and that is a term we heard used in discussion on Committee Stage.
I will have no problem in withdrawing the amendment if the Minister of State can assure me the scenario I am about to present to him is dealt with in the Bill. Let us take for example two individuals, myself and Deputy McGrath for instance. Deputy McGrath purchases a second hand house and renovates it for his family and adapts it for a disabled child. He installs ramps for wheelchair access, a stair lift and carries out other works required, perhaps lowering kitchen units to make them accessible. The house Deputy McGrath has purchased was previously occupied and comes under the scope of the Bill. Therefore, he can avail of the tax credit. However, if I purchase a newly built and fully fitted out house and under similar circumstances to Deputy McGrath want to adapt it and install ramps, a stair lift and adapt the kitchen cabinets to make them accessible to someone in a wheelchair, I will be denied the tax credit under this legislation due to having purchased a newly built house.
I mentioned this issue on Committee Stage and while the wording of this amendment is not perfect, it was put down to provoke a discussion on the issue. Can the Minister of State tell me that my purchase of this newly furbished house is catered for in this scheme? The work I want carried out on the new house is not dead weight because it makes the house accessible to whatever member of my family has the disability, but I understand it is not eligible under the scheme.
I understand the Deputy could apply for a disability grant for an adaptation. That is the normal case. If a person buys a new house which does not have all of the fittings and additional elements one would expect to be part of a new house, that is reflected in the cost of the house. If one buys a bare house, although it is a new house, that will be reflected in the sale value of the house.
I am aware of the points made on Committee Stage, although I was not there for the discussion. The objective of this scheme is to promote additional construction activity, over and above what exists. It is also hoped it will encourage tax compliance within the industry. In so far as the issue of disability has been raised, a person can apply for a grant for the works and if the application is accepted by the local authority, this will offset up to 90% of the cost. As I said, if a person buys a house that is bare, that is reflected in the cost of the house. It is significantly cheaper than a house that has all of the appliances and fittings.
This scheme is a stimulus measure that is about giving additional value to the construction industry. We believe it is finely scoped in terms of what we are trying to achieve and do not propose to extend it.
It is regrettable that we are rehashing the same arguments and counter arguments and that I must now rebut the argument being made by the Minister of State. This is unfortunate, because the amendment is about taking us forward. The main justification for the Department's argument is that an individual can apply for a housing adaptation grant or disability grant to do the type of work I have mentioned. The work might not mean installing ramps, a stair lift or lowering cupboards. It could, for example, involve building a single room with an en suite or shower room to suit the person's circumstances. Therefore, let us park on the side the notion that it is about fitting out a house.
The Minister of State mentioned the grant. The grant is means tested, so if a person's means are at a certain level, he will not get the grant. Also, one must live in the house to get the grant and cannot apply for the grant for a house one does not live in. Therefore, an individual who wants to purchase a house but needs to make adaptations to the house to be able to live in it is not eligible to apply for the grant. The argument in this regard is a non-argument. The point is that if I purchase a second hand house and build the extension or install the stair lift, I will get the VAT reduction as a result of this legislation. However, if I buy a newly furbished fully fitted house, I will not get the VAT reduction, despite the fact I need to carry out the same adaptions for an individual in the same circumstances.
There is a flaw in the legislation in this regard. This flaw could be easily amended by including, where we are dealing with new houses that were completely finished, a provision for works for the purpose of adaptations for people with special needs. A number of people have come to me about this issue and I know people who have been in circumstances similar to this. We have amended legislation previously. Despite my opposition to the local property tax, I put forward an amendment which was carried. It dealt with individuals who extended their houses to meet particular special needs circumstances and provided that the extension would not be taken into consideration in terms of the value of the house. There is a precedent for doing this in legislation. As late as one year ago, the Government acknowledged the precedent of this category of people. Unfortunately, there is a discriminatory element built into this legislation, whereby a person who purchases a previously occupied house can avail of the tax credit, but a person who purchases a new house will not be able to avail of it.
I support the principle Deputy Doherty seeks to establish here. I believe it is irrelevant whether the adaptation works required to be carried out to meet the needs of a person with a disability are in respect of a new home or a second hand home. The spirit of the amendment provides that in either case, the situation would be accommodated and the incentive would apply.
On a related point, perhaps the officials will look again at the definition of "qualifying residence". The Bill states that the definition in relation to an individual means "a residential premises situate in the State." Is there a letter missing and should that be "situated"?
We will look at that.
In addition to the points made by Deputies Doherty and McGrath, I also cited a further example which is relevant to the argument for not excluding newly built houses. I referred to NAMA properties or properties that are currently empty, but which should be occupied.
We should do something about the ghastly situation whereby according to the CSO there are 320,000 empty properties throughout the country. If this incentive were to encourage people to purchase these and fit them out such that they were attractive for people to move into or buy, it would have a useful purpose. It would also provide employment to tradespeople and builders if we did this. I can imagine that houses that have been sitting empty for a few years will have wear and tear and will require work simply because of the time they have been vacant. There would also be work which would make them more attractive to a potential buyer. Obviously I am only speaking about cases in which these houses would be purchased as principal private residences. On these grounds we should not exclude completely new properties from the tax incentive.
On the issue of the definition of qualifying residence which Deputy McGrath raised, we did raise it with Parliamentary Counsel and I understand the view of Parliamentary Counsel was that the definition in the legislation is the correct approach.
The word "situate" as opposed to "situated" is correct.
Yes.
It does not look right.
We raised this query and had a second look at it. Deputy McGrath possibly raised the issue on Committee Stage.
No, I did not.
This is a new issue. When I asked the question I was told it had been raised, so well done for spotting it.
On the amendment tabled by Deputy Doherty, I know the argument made by the Deputy and I have a good deal of sympathy with it, but it is not in the amendment. The amendment is much broader in scope than the arguments he made in the rebuttal to me thus far this morning whereby he has used people with a disability as an example. If a member of someone's family has a disability, presumably this person has regard to the situation faced by the person with a disability and must find a house environment which will suit the person's needs, be it a child or an older person. Someone on the housing market will look around for the most suitable home he or she can afford to buy. The idea that people do not have regard for this when purchasing a home knowing a person in the family has a disability is a bit far-fetched.
Legislation must be non-discriminatory. It is a basis in tax law. As I stated earlier, this is why we have built into the system the old-fashioned disability grant, which can have regard to the fact that people need adaptations, and they can be supported at that stage. It is not normal that we put into the tax code specific cases such as this. Provisions in the tax code must be general. If it were opened up according to the amendment it would have a much bigger scope and potential liability in terms of the tax foregone.
We are satisfied with the scheme as it operates. This will operate for a two-year period. We can examine it again in advance of next year's finance Bill if particular issues arise, but as far as the scheme is proposed at present we are satisfied that, broadly speaking, we have it right. If issues arise in the next 12 months we can examine them.
Amendment put and declared lost.
Amendments Nos. 3 and 4 may be discussed together.
I move amendment No. 3:
In page 10, to delete lines 37 to 39 and substitute the following:
"behalf, proves that in the years of assessment, he or she has made payments to a qualifying contractor or a number of qualifying contractors in respect of qualifying expenditure to which this section applies, incurred over the years of assessment as set out in subsection (2) of this section, the income tax".
I do not intend to move amendment No. 4 and I ask the Minister of State to keep his comments to amendment No. 3.
Amendment No. 3 arises from a discussion we had on Committee Stage. Reading the Bill, it was not clear that one could incur the €5,000 which would have to be spent on a number of contractors over the entire qualification period, which stems from 25 October 2013 until 2015 in certain circumstances. The Minister stated that this was covered in section 477B(3)(a) as inserted by section 5, but I do not see where. Even if it does, there is an argument about what the individual must prove. According to section 477B(3)(a) as inserted by section 5, "Subject to the provisions of this section, where an individual (in this section referred to as 'the claimant'), on making a claim in that behalf, proves that in a year of assessment he or she has made a payment or payments to a qualifying contractor in respect of qualifying expenditure to which this section applies". With regard to making a claim, paragraph (d) of the same section, on page 11 of the Bill, states that the expenditure must be greater than €5,000. For me, the phrase "year of assessment" is key. In my view "year of assessment" is singular, and we had a debate on Committee Stage on "singular" meaning other things. One cannot make a claim unless one has spent €5,000 and one must prove in a year of assessment that one has made payments. The interpretation is that one could pay €3,000 in one year of assessment and in another year of assessment one could pay another €3,000, which, combined, is above the €5,000 threshold. This raises the question of whether one must prove in both years of assessment one has made a claim or whether one must prove it in a year of assessment.
I welcome the Minister's clarification that we can aggregate all of the spend over the entire qualification period, which spans four calendar years in certain circumstances, but I do not think it is clear. This is why I have tabled the amendment, which would insert "proves that in the years of assessment, he or she has made payments". One would have to prove not only that one spent €3,000 that year but also €3,000 another year. The amendment also states that these payments are to be made "to a qualifying contractor or a number of qualifying contractors in respect of qualifying expenditure to which this section applies, incurred over the years of assessment as set out in subsection (2) of this section". These are the criteria whereby one can avail of this until 31 December 2015, and beyond it in certain circumstances.
I do not propose to accept amendment No. 3. The reason it was necessary to include the reference "qualifying contractors" in paragraph (d) was to make it absolutely clear the minimum threshold of €5,000 in the paragraph does not apply to each individual contractor engaged by a home owner. It applies collectively to all contractors engaged by the homeowner. If this threshold applied to each contractor it would serve to exclude many homeowners from the incentive. It is necessary to include the words "a number of" when referring to "qualifying contractors". It is not clear what years of assessment are referred to in the first line of amendment No. 3.
If I understand it correctly, there may be a belief that a claim can only be made in respect of a particular year of assessment, namely, the year in which the claim is made. This is not the case. In the current formulation of paragraph (a), there is no specific link between the making of a claim and the year of assessment in which payments are made to a contractor. When making a claim, the homeowner must prove that in either or both of the years covered by the scheme a payment or payments were made to the contractor or contractors who carried out the work. It is as simple as that.
Let us consider the example of a homeowner who pays his or her contractor or contractors €1,000 in December 2013, €2,500 in April 2014 and €3,000 in March 2015. In such circumstances, the minimum threshold would only be reached in March 2015 and it would not be possible, therefore, for a claim to be made in respect of the 2013 and 2014 payments, totalling €3,500, prior to that date. As soon as the minimum threshold is reached in March 2015, the homeowner could submit a claim in respect of the 2013 and 2014 payments. The credit in respect of 2013 and 2014 will be spread over the two tax years of 2015 and 2016. The credit relating to the €3,000 payment in 2015 will be spread over the two tax years of 2016 and 2017. I hope this clarifies the point. As far as I and the Minister for Finance, Deputy Noonan, are concerned, there is now clarity in terms of the application of this provision. Once the minimum threshold kicks in, the provision will apply. As far as we are concerned, the difficulty the Deputy has articulated in the context of the qualifying year is not an issue.
I appreciate the clarification. Outside of the technical considerations with regard to what I am seeking to do with this amendment, namely, to make matters clearer, the statements from the Minister of State and the Minister, Deputy Noonan, that it can be aggregated and that this can be done in respect of a number of contractors are welcome. I tabled an amendment on the issue relating to contractors on Committee Stage but the Government had already accepted the principle involved. What we are discussing here is the fact that it can be aggregated over a number of years. That is not in dispute and I welcome the confirmation from the Minister for Finance in this regard. Reading the text of the Bill, however, I cannot understand how this interpretation can be made. The clarification has been given. In addition and as the Minister of State and I have indicated, this debate will provide clarity to those who will implement the legislation.
Let us focus on the key issue. We have accepted the principle relating to multiple contractors and the qualifying period. The Minister of State referred to what is meant by years of assessment. There can only be one year of assessment, namely, the year in which the claim is made. The Bill does not contain a definition in respect of the term "year of assessment" but the Minister of State has indicated that it is the year in which the claim is made and not the eligibility period which runs from October of this year to December 2016. Subsection (3)(a) states that "where an individual ... on making a claim in that behalf, proves that in a year of assessment he or she has made a payment or payments to a qualifying contractor in respect of qualifying expenditure to which this section applies, the income tax to be charged on the claimant, other than in accordance with section 16(2), shall be reduced". Basically, the person will receive the income tax reduction during the following two periods. If we change the term "year of assessment" to a particular date, the subsection will then read "where an individual ... on making a claim in that behalf, proves that in 2014 he or she has made a payment or payments to a qualifying contractor in respect of qualifying expenditure to which this section applies, the income tax to be charged on the claimant, other than in accordance with section 16(2), shall be reduced". That is fine but the problem is that a claim can only be made if €5,000 is spent. Claimants are not being asked to prove that they made payments in the other years which are not years of assessment.
I am not sure whether the Minister of State is following what I am saying. Under subsection (3)(a), claimants are only being asked to provide proof of the payments made in the year in which the claim is made. They are not asked to provide proof in respect of payments made in the previous year or years which bring the total amount involved up to €5,000. How does all of this marry with what is contained in subsection 3(d)?
I think the Deputy may be confusing the issues. My understanding is that the year of the assessment is not the year of the claim. I reiterate what I said earlier, namely, that in the current formulation of paragraph (a), there is no specific link between the making of a claim and the year of assessment in which payments are made to a contractor. When making a claim, the homeowner must prove that in either or both of the years covered by the scheme a payment or payments were made to the contractor or contractors who carried out the work. I do not know what is the issue with that.
The legislation does not contain a definition in respect of "year of assessment". What is the year of assessment? A claimant must prove that in a year of assessment-----
I will clarify the position. The years of assessment are 2014 and 2015.
Should the legislation not the refer to "years of assessment"?
The key point I made earlier is that a claimant does not have to prove that he or she made a payment in a year of assessment. My amendment seeks to provide clarification and I do not understand why it could not be accepted. All it does is clarify an issue, namely, the fact that what constitutes a year of assessment is not defined. In response to amendment No. 3, the Minister of State indicated that he does not know what years of assessment means. The amendment refers to "payments to a qualifying contractor or a number of qualifying contractors in respect of qualifying expenditure to which this section applies, incurred over the years of assessment as set out in subsection (2) of this section". Subsection (2) very clearly sets out the period of eligibility which runs from 25 October 2013 to 31 December 2015. The Minister of State has decided to indicate that the years of assessment are 2014 and 2015. That is okay but there is no definition of "years of assessment" in the legislation. I have been trying to establish clarity in respect of the proof a claimant must provide in respect of the years of assessment in circumstances where those years are not defined. We can take the Minister of State's word for it and the Revenue can interpret it as relating to the two periods, which is fine. However, what is stated in the Dáil is no replacement for what will be the position when this Bill becomes law.
I appreciate that the Deputy is seeking to bring greater clarity. My understanding is that the matter has been thrashed out between the Department and Revenue and that there is no direct link between the year of the claim and that of the assessment. For the purposes of the scheme, the year of the assessment applies for the two years as set out in the legislation. When a person makes a claim, he or she will get something back from Revenue. As far as we are concerned, the Department is clear on the matter and, more importantly, so is Revenue, which is responsible for shelling out money in respect of tax claims.
If I could make a helpful observation in a neutral sense, there is still a degree of uncertainty on the Minister of State's part and also on that of the Deputy. Perhaps it might be an idea to obtain some further clarification in respect of how the provision will operate.
I thought I had provided a working example.
I honestly think that it probably requires further tightening up. Having listened to the debate, that is my impression.
On a point of order, in my reply to the very important issue raised by Deputy Pearse Doherty I set out a working example. Would the Acting Chairman like me to restate it for the record?
No, it is already on the record.
Right. The example I gave in my initial reply explains, in very plain English, how this can work. In my subsequent reply, I indicated that this is the view of the Revenue. The latter is, of course, the body which has responsibility for refunding money to people on foot of claims they make. In the context of the Acting Chairman's intervention - which was slightly unusual - I cannot understand how the position might be made any clearer.
The amendment is designed to bring clarity. Following an initial reading of the subsections in the Bill, I and quite a number of others were of the view that it would not be possible to accrue the €5,000 over the years of assessment. The Minister of State-----
Would it be helpful if we provided further examples? We would not have any difficulty doing so.
While I appreciate the Minister of State's offer, I do not need further examples. The key issue is that this is now allowed. The Minister of State indicated it is being interpreted by Revenue, which is fine. I can give examples of mistakes resulting in complacency creeping into legislation. The Revenue was involved in the legislation on the local property tax, which included a mistake that came with a price tag of €3 million. Sometimes one word can have significant consequences. The purpose of my amendment is to bring clarity to the section. The Minister of State has made clear that, notwithstanding any legal interpretation of the provision, the intention of the House is that the relief will apply throughout the period in question. On that basis, I will withdraw the amendment.
Amendment, by leave, withdrawn.
Amendment No. 4 not moved.
Amendments Nos. 5 and 6 are related and may be discussed together.
I move amendment No. 5:
In page 11, lines 29 and 30, to delete “than €5,000” and substitute “than €1,500”.
I do not intend to labour the point in respect of this amendment. The amendments adopted on Committee Stage and the clarification the Minister of State has just provided on the years of assessment and multiple contractors have gone some way towards satisfying me on this matter. The remaining caveat is that a person claiming this tax relief must spend in excess of €5,000 over two years. Many people do not have funds of that order to spend on their home. While some people will gladly have a lawn landscaped or garden remodelled to avail of this tax relief, as is permitted under the legislation, others, who the Minister of State used the unfortunate term "dead weight" to describe, need a new shower fitted or windows and doors replaced because the wind is whistling through them but will not qualify.
The Minister of State indicated the relief is not intended in respect of renovation works that would be done in the normal course. The problem is that many of these normal works are not being done and people are instead jamming cardboard into window frames, plumbing problems are not being addressed and so forth. In many such cases, householders find it impossible to find €5,000 in discretionary income in a two-year period. While one can argue over what is an appropriate threshold, the figure provided in the Bill should be lowered. Many people would consider €1,500 a large amount and many of those who are living hand to mouth could use this tax benefit.
People with plenty of disposable income whose windows are not whistling will be able to avail of this tax credit to have a new door installed, have double glaze windows replaced with triple glaze windows or a shower that is in perfect working order replaced because it does not provide sufficient power. The householder may simply combine a number of small jobs that improve his or her home visually, provided they amount to more than €5,000. The focus of the amendment is to extend the relief to those who will not be able to find €5,000 to spend on their home during the period covered by the measure.
We had an extensive discussion on this tax relief on Committee Stage. My amendment splits the difference between the figure we proposed in committee and the Minister's threshold of €5,000.
I do not generally favour tax breaks and, in so far as they are discussed in the Chamber, I spend most of my time railing against them because they are given primarily to people who do not deserve them and serve little purpose in terms of the development of the economy and society. This relief, however, is a good one that is well targeted. Its beneficiaries are likely to be ordinary citizens having home improvements such as insulation works carried out and tradespeople who are a key focus of the measure. Given that many tradespeople are in serious difficulty, it is a good idea to have a targeted measure which will, I hope, generate some employment for building workers and those with a trade.
In arriving at the threshold of €5,000 has the Department drawn up a list of works that could constitute refurbishment? Deputy Doherty cited a number of examples of such works and I also set out a number of cases on Committee Stage. Many works that would cost less than €5,000 could not be described as day-to-day repairs that would be carried out in the normal course. I accept the point that the purpose of the relief is to generate work that would not otherwise be generated. This is the Minister of State's concern regarding the proposal to reduce the threshold and it is, I believe, what is meant by the term "dead weight" - I love these new phrases that people come up with. If the Minister of State's argument is that we cannot afford to provide tax breaks in respect of works that would be done at any rate and the purpose of this relief is to encourage new activity, that is fair enough. However, I can think of numerous examples of works costing between €1,500 and €5,000 that one would describe as new activity. For example, in the case of a person I know who is considering landscaping her garden, I suspect the work will not be done if the threshold remains at €5,000 because she could not afford to have it done. I am not batting on behalf of the individual in question but her garden could probably be landscaped for-----
The gardens are very posh where the Deputy lives.
It is the garden of a former council house in Sallynoggin. I suspect it could be landscaped for €2,500. This tax break could be the difference between the work being done and not being done.
Deputy Doherty referred to the replacement of windows, which is another good example of works that would be done if they fell within the scope of the relief. It would be positive if such works were carried out as we want people to have better insulation and so forth. I used some rubber material on a dodgy window recently to stop it banging. In such circumstances, one faces the choice of having spanking new, double or triple glaze windows fitted, which are much better in terms of insulation, or having a stop-gap job done. The difference is that in the latter case, one is not having new work done, while in the former case, one is genuinely providing employment for tradespeople that would not otherwise be provided.
The Deputy has made his point very well.
I ask the Minister of State to consider splitting the difference between his figure and the figures proposed by Deputy Doherty and me.
We had a good debate on this issue on Committee Stage when I also tabled an amendment on this issue. While I accept the need to introduce a threshold, the current threshold is high.
A more fundamental point about the incentive scheme is, because the Minister is doing it through the income tax system, somebody must have an income tax liability in the first place against which to offset this credit whereas, in effect, what the Minister is doing is giving the person the VAT back. A more equitable system would have been to return the VAT to applicants even if they had no income tax liability. That would have been a fairer way. Because of the way it will be done through the income tax code and the €5,000 threshold, the scheme provides a greater benefit to those who have a great deal of money - those who have an income tax liability and who have €5,000 or more to spend. That is the nature of its construction. It will benefit disproportionately those who have money and who have an income tax liability against which the credit will be offset.
On that issue, the fact that the credit can be spread over two years means those on low income would be able to benefit from the entirety of what is on offer.
But they will need a tax liability.
If they have a tax liability over a two-year period where the scheme operates, they can draw that down.
On the other question that Deputy Boyd Barrett raised about the guidelines, I am not sure whether the Minister, Deputy Noonan, stated at committee that these will be published early in the new year between Revenue and the Department of Finance. We cannot do it until the Bill goes through both Houses but it is the intention that such guidelines will be published early in the new year.
I accept the bone fide comments of colleagues opposite. It is a novel scheme, but it is targeted. There is very little funding around to provide any such scheme because one is talking about tax forgone. Where we are using the tax system to help stimulate the construction system with a good targeted measure, we must ensure that we do so proportionately. As I stated, this is an additional targeted stimulus to the construction sector which also encourages the entirety of that sector to be tax compliant.
It is a novel scheme. It is important to point out we also improved the scheme through the amendments we accepted already on Committee Stage by which the threshold is inclusive rather than exclusive of VAT. The Minister listened carefully to what colleagues had to say about that issue. We also accepted other amendments.
The problem is one must achieve a balance between what one wants to do, which is to help stimulate the construction sector, and simply giving carte blanche to those who will get work done anyway to avail of a tax benefit in circumstances where they might be able to afford to get that work done. If we are being frank and honest about this, that is a difficult balance to strike.
We reduced the minimum, from €5,675 inclusive of VAT to €5,000 inclusive of VAT, which means that a greater number can avail of the incentive over the two-year period. We think we have got the balance about right, but we must wait and see how successful is the scheme.
There is broad acceptance of the scheme and what it attempts to achieve and with the amendments the Minister, Deputy Noonan, has accepted thus far, it has been improved by way of its reading in the House.
We will not find common ground on this here. I acknowledge that the Minister accepted amendments - indeed, the Minister accepted one of my amendments - on Committee Stage, and accepted the spirit of amendments that were raised on Second Stage as well. The Bill has been strengthened.
It is important, because it has not been placed on the record, to state that in this section we are also repealing a home improvement scheme and this is not the first time a home improvement scheme was brought into law. We are repealing a home improvement scheme that was focused on environmental issues that was never commenced. It is probably unfortunate. I say that because many in the construction sector have been idle for far too long and for the past number of years, it was never commenced because of whatever problem - drafting errors, etc. - and that ministerial order was never given effect.
We are removing a scheme that focused on environmental issues and expanding the scheme to allow for one's garden to be landscaped. I am sure residents want to enjoy their nice gardens, but the Minister is replacing one tax credit scheme, which was not only about getting the construction sector moving but about making an impact in terms of the environment, with another.
I am not arguing against the scheme. The scheme it worthy. I would like to see the threshold reduced but, as I stated, the inclusion of the multiple contractors and years of assessments probably goes some way to addressing the issues.
However, I will press this amendment.
We have discussed the matters at length, but I make one point that has not been made but was sparked by Deputy Michael McGrath's comment. One could argue the opposite of what the Minister of State, Deputy Brian Hayes, is arguing. Somebody might be more likely to make bigger refurbishments or adaptations to his or her house anyway, to use the Minister of State's criteria, because he or she has more money whereas those on the margin are perhaps the ones who are not getting the works done, and it follows that it would be better to bring the threshold down.
I take the point that there is a balance to be struck. One does not want to take the threshold down so far that one also gets routine repairs where there is no extra work being drawn into it. However, many of what could be described as reasonably substantial home improvements would fall between the figures, below €5,000 but above the cost of mere day-to-day repairs. I suspect that works in that category, as against the works of those who have a fair bit of money who have not been hit too badly by the recession and can press ahead with more substantial improvement works to their homes, are the ones most likely not to be done at present. On those grounds, the Minister of State should reconsider, perhaps in the Seanad.
In any scheme of this nature, finding the balance is always difficult. In a circumstance where, as we all will be aware, the construction sector fell off a cliff and, as I state repeatedly, 60% of those who lost their jobs were directly or indirectly attached to the construction sector, there is a responsibility across the whole of Government to see what can be done to improve the position and provide a direct stimulus. Of course, it needs to be said that this is not the only stimulus we are providing. The Minister made clear in his Budget Statement that the €0.5 billion of additional resources to stimulate the economy and get people back to work is a fundamental part of what this Finance Bill is about.
On the specific area, the scheme is targeted. Hopefully, we have got the correct balance, between, as Deputy Boyd Barrett stated, those who can afford to get such work done and those on the margins who might hold off. We are talking about a sum of €5,000. It is not a huge sum of money but, nonetheless, it would help a person make that decision in favour of availing of the scheme over a year or two to get works done in his or her house.
On the other point that Deputy Pearse Doherty raised on the repeal of the home improvement scheme, the view of the Government, as expressed by the Minister for Communications, Energy and Natural Resources, Deputy Rabbitte, is that the more targeted approach to help householders, certainly those on lower incomes, with house insulation and improving the thermal efficiency of their homes is through the Sustainable Energy Authority of Ireland. As the Deputy will be aware, a range of cash grants is available through the Sustainable Energy Authority of Ireland, for instance, the better energy home scheme. In addition, it operates the warmer home scheme under which work such as attic insulation can be carried out free of charge to qualifying individuals. The latter scheme is specific to those on lower incomes. The view is, rather than making one eligible for that through the tax code, it is more targeted to do it by way of specific cash grants to those on lower incomes to help them improve the insulation in their homes.
Deputy Pearse Doherty said he would press his amendment.
Is the amendment agreed to?
Question put: "That the word and figure proposed to be deleted stand."
The Dáil divided: Tá, 66; Níl, 42.
Tá
- Barry, Tom.
- Breen, Pat.
- Burton, Joan.
- Butler, Ray.
- Buttimer, Jerry.
- Byrne, Catherine.
- Byrne, Eric.
- Carey, Joe.
- Coffey, Paudie.
- Conlan, Seán.
- Connaughton, Paul J.
- Coonan, Noel.
- Corcoran Kennedy, Marcella.
- Coveney, Simon.
- Creed, Michael.
- Daly, Jim.
- Deenihan, Jimmy.
- Dowds, Robert.
- Doyle, Andrew.
- Durkan, Bernard J.
- Farrell, Alan.
- Feighan, Frank.
- Fitzgerald, Frances.
- Fitzpatrick, Peter.
- Flanagan, Charles.
- Griffin, Brendan.
- Hannigan, Dominic.
- Harrington, Noel.
- Harris, Simon.
- Hayes, Brian.
- Heydon, Martin.
- Hogan, Phil.
- Howlin, Brendan.
- Humphreys, Heather.
- Humphreys, Kevin.
- Keating, Derek.
- Kehoe, Paul.
- Kelly, Alan.
- Kenny, Seán.
- Kyne, Seán.
- Lawlor, Anthony.
- Lynch, Ciarán.
- Lyons, John.
- McEntee, Helen.
- McGinley, Dinny.
- McHugh, Joe.
- McLoughlin, Tony.
- McNamara, Michael.
- Maloney, Eamonn.
- Mitchell, Olivia.
- Murphy, Eoghan.
- Nash, Gerald.
- Neville, Dan.
- Nolan, Derek.
- O'Donovan, Patrick.
- O'Dowd, Fergus.
- O'Mahony, John.
- O'Reilly, Joe.
- Phelan, Ann.
- Phelan, John Paul.
- Rabbitte, Pat.
- Reilly, James.
- Ring, Michael.
- Ryan, Brendan.
- Stagg, Emmet.
- Varadkar, Leo.
Níl
- Boyd Barrett, Richard.
- Broughan, Thomas P.
- Browne, John.
- Calleary, Dara.
- Collins, Joan.
- Collins, Niall.
- Colreavy, Michael.
- Cowen, Barry.
- Crowe, Seán.
- Daly, Clare.
- Doherty, Pearse.
- Donnelly, Stephen S.
- Dooley, Timmy.
- Ellis, Dessie.
- Ferris, Martin.
- Flanagan, Luke 'Ming'.
- Fleming, Tom.
- Grealish, Noel.
- Halligan, John.
- Healy, Seamus.
- Healy-Rae, Michael.
- Kelleher, Billy.
- Mac Lochlainn, Pádraig.
- McGrath, Finian.
- McGrath, Mattie.
- McGrath, Michael.
- McLellan, Sandra.
- Mathews, Peter.
- Murphy, Catherine.
- Naughten, Denis.
- Ó Caoláin, Caoimhghín.
- Ó Fearghaíl, Seán.
- Ó Snodaigh, Aengus.
- O'Dea, Willie.
- O'Sullivan, Maureen.
- Pringle, Thomas.
- Ross, Shane.
- Shortall, Róisín.
- Smith, Brendan.
- Tóibín, Peadar.
- Troy, Robert.
- Wallace, Mick.
Tellers: Tá, Deputies Emmet Stagg and Paul Kehoe; Níl, Deputies Aengus Ó Snodaigh and Pearse Doherty.
Question declared carried.
Amendment declared lost.
Amendment No. 6 cannot be moved.
On a point of order, why can it not be moved?
Amendment No. 6 is an alternative to amendment No. 5. We have voted on the question that the words and figures proposed to be deleted stand.
Is it counterpoised to amendment No. 5?
It was discussed with amendment No. 5.
Yes, I know it was discussed with that amendment, but do we not have to go through the formality of pressing it?
No, it cannot be pressed.
Standing Orders are such fun.
Amendment No. 6 not moved.
I move amendment No. 7:
In page 13, between lines 11 and 12, to insert the following:
“(c) Where a qualifying contractor has not fulfilled the provisions set out in this subsection, the Revenue Commissioners, upon receipt of a claim from a claimant shall inform the contractor of the claim and final stated payment and inform the contractor that they are obliged to fulfil the requirements as stated in this section. Contractors will have 10 working days to dispute the payment claim, at which point the Revenue will process the claim, once legitimate receipts are provided.”.
This amendment deals with a case in which a company or a contractor goes out of business or does not make a return.
I ask Members in the Chamber to have respect for the Member in possession. Deputy Pearse Doherty is speaking to the amendment. I ask for silence and that conversations take place outside the Chamber.
This involves a contractor who has not made a return under section 5, whether intentionally or unintentionally, in a case in which the company is in liquidation or the person has left the country. Whatever the reason, a person has made the claim and is entitled to tax relief because the work was carried out by a contractor deemed to be qualified and the work was deemed to be relevant by the Revenue Commissioners. There should be no delay in processing the person's claim. The Minister provided clarification on Committee Stage that, in the event of a contractor not fulfilling the terms of section 5, the claim would be paid; therefore, the individual cannot be denied tax relief as a result of the contractor not complying with the terms of section 5(a) and penalties will not be imposed on the contractor. The amendment addresses the delay that might result through the contractor not complying with the provisions of section 5(a).
What is the process under legislation whereby the Revenue Commissioners make a payment where the contractor has not complied with the provisions of section 5(a)? It may be a case of the contractor refusing to comply, going out of business or being in liquidation or that he or she has passed away. What is the process involved in making the payment? The claims process is dependent on a number of steps, including the contractor being eligible, the contractor providing the unique reference number from the Revenue Commissioners for the individual, the contractor informing the Revenue Commissioners of the receipt of payment and the amount, and the individual making the claim. For reasons that are or are not genuine, where the third step is not taken - the contractor stating how much was paid for the work - I can see a delay in processing the claim of the individual who has had the work carried out and complied with the law. That is why my amendment includes the following:
Where a qualifying contractor has not fulfilled the provisions set out in this subsection, the Revenue Commissioners, upon receipt of a claim from a claimant shall inform the contractor of the claim and final stated payment and inform the contractor that they are obliged to fulfil the requirements as stated in this section. Contractors will have 10 working days to dispute the payment claim, at which point the Revenue will process the claim, once legitimate receipts are provided.
Debate adjourned.