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Dáil Éireann debate -
Tuesday, 9 Nov 2021

Vol. 1013 No. 5

Ceisteanna Eile - Other Questions

Credit Unions

Cormac Devlin


74. Deputy Cormac Devlin asked the Minister for Finance how he is supporting the credit union sector to continue to provide essential financial services to local communities; and if he will make a statement on the matter. [54363/21]

I ask the Minister for Finance to outline the ways in which the Government is supporting the credit union sector to continue to provide essential financial services to local communities.

The programme for Government includes a number of commitments to the credit union sector. I intend to shortly issue proposals emanating from the review of the policy framework for consultation. This will involve meeting with representative bodies and other stakeholders, a commitment I made in my recent engagements. In total, I have had 23 meetings with credit union stakeholders this year, including with representative bodies, collaborative ventures, service providers, the credit union advisory committee and the Registry of Credit Unions, to gather further information to help inform the next steps of the review.

In supporting the sector to provide essential financial services to local communities, I will outline some of the recent developments which highlight the potential of the sector to fulfil a role in community banking. The Central Bank of Ireland in recent years reviewed both the lending and investment frameworks. Since January 2020, credit unions now have a combined capacity to provide up to €1.1 billion in additional SME and mortgage loans with further capacity available to credit unions that can comply with certain conditions, or on the approval of the Central Bank of Ireland. As of June of this year, credit unions had a combined mortgage and SME loan book of €372 million, an increase of 18% on last year. There is, therefore, adequate headroom for credit unions to issue more mortgages and more loans to the SME sector, without requiring any further Central Bank of Ireland approval at the moment. Credit unions are permitted to place their surplus funds that have not been lent to members in range of investments, including tier 3 approved housing bodies, AHBs. I am pleased to share with the Deputy that two credit union-backed funds have received approval from the Central Bank of Ireland. Credit unions will be able to invest up to €900 million in these regulated funds, which will be subsequently lent to the AHBs.

I thank the Minister of State for that reply and for his engagement, particularly on the review. I note that €1.1 billion being lent for SMEs and mortgages. Will he please update the House on the three commitments contained within the programme for Government, one of which is the status of the review with the policy framework with the credit unions and how they are operating? What action is being taken to enable and support the credit union movement to grow? I also note the 18% increase in the loan book. How are he and his Department supporting credit unions in expanding their services to encourage community development? Finally, I ask the Minister of State to provide an update on these commitments, either to the House this evening or in written form.

First, the policy review referred to in the programme for Government is at an advanced stage. In the coming weeks, we will have a clear timeline for that process, but it is imminent.

Second, growing the credit union movement, as referenced in the programme for Government, is essentially about growing the credit unions' loan book. They have adequate deposits and savings. They do not need to grow those to any great extent. In fact, the extent of their savings can cause them financial difficulties in the negative interest rate environment we are in at the moment. I met specifically with all the main credit union organisations in light of a number of banks closing branches in many towns, cities and rural areas throughout the country to progress the opportunities available in many of these locations where the credit union is the only financial institution left standing. Credit unions have tremendous ability and scope to increase their lending. That does not require further legislative proposals to assist them. I look forward to working with them in that area.

The Minister of State mentioned the credit unions’ willingness to step in, particularly given the closure of bank branches throughout the country. There have been a number of high-profile branch closures, including in my constituency and in Dublin city. Only last week, Shankill in my constituency lost its ATM. Some Deputies might say that that is not the end of the world. However, it is for a community that relies on that ATM to access services.

I also commend Core Credit Union for its proactive nature in expanding its services. That is exactly what the credit unions want to do. They want to expand services, such as loans, savings, current accounts, debit cards, apps, online banking and so on. With the right support from Government and from the Central Bank of Ireland, credit unions say that they can continue to be present in towns and villages, which is important. I acknowledge what the Minister of State is saying about that. The Minister of State might please keep in contact with me about that engagement, to ensure that once the review is complete we know exactly where we are.

I look forward to briefing the Deputy, as well as the opportunity to brief the Joint Committee on Finance, Public Expenditure and Reform, and Taoiseach, on developments as we progress. A total of 19 credit unions were approved in early 2021 for participation in the Covid-19 credit guarantee scheme. The Government has provided substantial funding for retrofitting. There will have to be some elements of providing funds by the homeowners themselves. The credit unions are the ideal movement to provide that vital type of extra information. The Central Bank of Ireland is looking at some of the services already provided that require its approval, with a view to seeing if some of these can be made exempt. I will come back with further information on that. Some legislation may be required in the areas we are talking about. However, the Central Bank of Ireland is independent of the Government for good reason. Collaboration is the way forward for credit unions because many of the issues I have mentioned are onerous for small individual credit unions. If they collaborate, they can work strongly.

Insurance Industry

Cathal Crowe


75. Deputy Cathal Crowe asked the Minister for Finance his plans to enhance the National Claims Information Database, NCID, in relation to insurance; and if he will make a statement on the matter. [54357/21]

On behalf of Deputy Crowe, I ask the Minister for Finance his plans to enhance the NCID, in relation to insurance.

The NCID contains information on the cost of non-life insurance claims. Life insurance is not part of my brief for this particular purpose. The Central Bank of Ireland is responsible for collecting this information, as well as for managing the NCID under the Central Bank Act 2018. It can allow the scope of the NCID report to evolve in line with requirements.

The Central Bank has already identified a number of enhancements it is planning to make to future reports.  For motor insurance, this will include increased historic income and expenditure data; information on catastrophic weather events; and duration of claim settlements.  For employer and public liability, it plans to collect additional data including more detail on costs related to re-insurance and commissions.  In addition, the bank will investigate information of policy excesses and limits, and the collection of further settlement channel data following the introduction of the new personal injuries guidelines.  In this regard, there is ongoing technical work being undertaken by the Central Bank and our officials.  I hope that the bank will consider publishing certain NCID data more frequently than is currently the case. Many of the reports come out annually. We would all benefit from a higher frequency than just annual reports.

Separately, the Government has also agreed to draft the insurance (miscellaneous provisions) Bill, which will include further NCID enhancements. I believe it is worth highlighting that the NCID provides a level of information into the insurance sector that is unique to our market. The level of information available from our Central Bank is the greatest level of transparency of any country in Europe, including the UK, which is bringing in some measures. They do not benefit in the first case from the information from an NCID report that we already have in Ireland. I want to make that point clear.

That is welcome news. I welcome the proposed extension of the national claims information database. I note that last week, at an Oireachtas committee, Oliver Gilvarry, head of the National Competitiveness and Productivity Council secretariat made the point that enhancements to the NCID database would provide greater detail on claims which would help to drill down on the cost of the awards. I note what the Minister of State has said about the volume of information available here compared with other jurisdictions, especially the breakdown between awards and legal costs. We have seen with the database that the more information that comes through, the more information policy makers have to move forward and identify what changes need to be made. Is it the intention to make sure that more data are provided?

Absolutely. We will have an outstanding level of transparency about these issues. The first thing that I should say every time I talk about insurance, especially about home and motor insurance, is that we know about the loyalty penalty for the motor insurance industry. Many people who have a policy for more than ten years are paying 10% or 15% more than they should be. We will make arrangements to ensure that that is dealt with. The same happens with home insurance but the penalty for people who stay with the same insurance company, sometimes for decades, can be over 30%, and we want to deal with that issue too. My main message regarding insurance is to shop around. When people get a bill, they should make a phone call or go online. My experience from listening to all the people I speak with is that they regularly get a reduction in the cost of their premium when they make an effort. It is a bit like going into a shop, complaining about the price of a product, and going to the shop next door to see if it is offering the same product at a lower price. I have a number of upcoming priorities. The speaking time does not permit me to provide the information so I will forward it to the Deputy.

I thank the Minister of State. It is certainly good information for consumers. The first Central Bank report on the national claims information database was published more than a year ago. It identified that in reality, the award to the individual, whether through PIAB or the courts, was pretty much the same. Coming back to the database, that is why, according to the National Competitiveness and Productivity Council, it is so important to see the information flow so that the industry can be challenged about why prices are not falling. When can we expect to see the changes take effect? What impact does the Minister of State anticipate it will have on the cost of insurance overall?

The most common claims being dealt with by the new guidelines were for soft tissue injuries, whiplash etc. They did not deal with catastrophic injuries. People who have lifelong catastrophic injuries need all the funding they can get. I should have said earlier that the Minister for Justice gave a commitment today, when guidelines were announced, to prepare a report at the end of this year, which is only a month or two away. That commitment is on the public record. We will shortly see a report from the Minister about that area. We are looking at the publication of the third national claims information database on motor insurance. We are reforming the duty of care legislation. The Minister, Deputy McEntee, is giving that immediate priority. We are establishing a database in the Central Bank for new entrants with greater transparency. We are continuing Ireland's engagement at a European level with regard to Solvency II reviews. We are preparing legislation to enhance the role of PIAB. I met with the Garda Commissioner about uninsured drivers. The road traffic legislation that was recently published will have an impact on motor insurance.

Banking Sector

John McGuinness


76. Deputy John McGuinness asked the Minister for Finance if he will report on recent engagement he or his Department have had with a trade union (details supplied) in relation to the future of banking in Ireland; and if he will make a statement on the matter. [54338/21]

The banking landscape in this country is changing dramatically. The departure of Ulster Bank will impact seriously on the Border region in particular. KBC is also leaving the country. The decision by Bank of Ireland to close one third of its branch network has also caused great disquiet in many communities throughout the country. At the same time as these bank closures are happening, households and businesses still need traditional banking services as much as ever. I hope that the Minister can give some good news about a banking forum.

Is this the question tabled by Deputy McGuinness?

I thank Deputy Smith. The Minister of State, Deputy Fleming, my officials and I have had regular contact with the Financial Services Union, FSU. Over the past year in particular, in light of the rate of change in the sector, this has included increased engagement in relation to the future of banking. The issues that the Deputy has referred to are serious. I am well aware of the different developments he has detailed and the concern they have caused in the community that he represents. I will finalise a memorandum to bring to Government in the coming weeks on the terms of reference for a review of our banking sector. Once they have been presented to Government, I intend to publish the terms of reference shortly afterwards. This process will involve ongoing engagement with a wide range of stakeholders, including the Financial Services Union.

I thank the Minister. I note that the Financial Services Union appreciates the direct engagement that the Minister and his Department officials have had with it. I have raised this on a number of occasions in the House, during Topical Issue debates, especially when Ulster Bank announced its departure from this country and when there was a dramatic reduction in the number of Bank of Ireland branches. I asked the Minister to ensure that there was good engagement with the Financial Services Union. We all had representations from members and employees of the banks who were concerned about their future. A forum, or whatever body the Minister establishes, needs to include all stakeholders. I hope that along with the banks, customers, staff, management, trade unions, business, employers and employers' groups, that community interests can also be represented on that forum. It is important that the views of communities throughout the country are represented, as we reflect them in this forum daily. It is important that communities have a mechanism to deliver their views on the banking sector and how we go forward.

I thank the Deputy for that point. I anticipate that the review we will bring forward will have a provision within it for submissions to be made and for communities to make their views known about development or the absence of banking services in their local communities. In the interests of complete transparency, I envisage a review which will be conducted by the Department of Finance with Government approval. As part of that review, there will be ample opportunity for important stakeholders in the Irish banking sector, those who work in it and those who depend on it for lending and investment to engage in this process to make their views clear.

I thank the Minister. As a society, we want to be more conscious of the people who do not have good literacy skills and who have not had the opportunity to adopt IT skills. Those people find it difficult to transact business today, especially when they cannot call into a local branch. It behoves all of us to ensure that there is an opportunity for people to transact their business in a practical way, especially people who may not have had the opportunity to acquire IT skills or who may not have access to broadband etc. It is important that those views are represented.

As the Minister is aware, the central banks of Britain and in New Zealand are conducting reviews on the subject matter of access to cash. We often think of ATMs as a mechanism to withdraw cash, but they are an important lodgement facility as well. In public banking meetings throughout the country, local communities expressed concern about hospitality and other retail businesses having to carry large amounts of cash and not having the opportunity to lodge that cash in a timely manner locally. We need to address the issue of access to cash.

There has been a decline in the use of cash for transactions, but for many it is still the preferred method of making payments and performing transactions. I take the Deputy's point and the issue he raised about financial literacy is tied to the need for financial inclusion. To ensure that all citizens have the ability to participate in our financial system, there must be a place where they can make deposits and a way in which they can make payments in shops. This is the kind of issue that can be covered in the review of our banking sector and policy, which I expect that the Government will agree to shortly.

Covid-19 Pandemic Supports

Paul McAuliffe


77. Deputy Paul McAuliffe asked the Minister for Finance if he is considering extending enhanced employment wage subsidy scheme, EWSS, supports for childcare providers indefinitely; and if he will make a statement on the matter. [48657/21]

I ask the Minister to consider extending the enhanced EWSS supports for childcare providers.

I thank the Deputy. The objective of the EWSS is to support employment and maintain the link between the employer and employee insofar as is possible. It has been an important part of our response to the Covid-19 crisis. While the criteria for eligibility for business in general is based on a reduction in turnover as a result of the pandemic and having regard to the importance of maintaining the provision of childcare facilities so as to enable parents to continue in or take up positions of employment, the legislation provided that childcare businesses in possession of tax clearance and registered in accordance with section 58(c) of the Child Care Act 1991 are eligible for EWSS. On budget day, I announced an extension of the scheme in graduated form until the end of next April. Since the introduction of EWSS, there has been detailed engagement between my Department and the Department of Children, Equality, Disability, Integration and Youth. Analysis undertaken by the latter Department and the Minister, Deputy O'Gorman, informed the approach taken with regard to the childcare sector.

I assure the Deputy that the childcare sector will continue to benefit from the EWSS exemption until the end of April. As announced by the Minister, Deputy O'Gorman, it is intended to put in place a transition fund between May and August 2022 which early learning and childcare providers can access. From September of next year a new funding stream will be in place to support providers in meeting their operating costs in return for a commitment that fees for parents will not increase.

To answer the Deputy's question, a coherent approach has been taken with regard to the exit strategy from EWSS and the introduction of a new funding stream for the childcare sector. As such, I do not believe there is a need for a further extension of EWSS for the sector because it should be accommodated between the extension of the scheme and the work the Minister, Deputy O'Gorman, will do.

I thank the Minister. He rightly pointed out that this measure was in response to Covid-19 and, importantly, it kept people working in the sector and provided jobs and income. At a higher level, we need to demonstrate how we value childcare in that whole sector before primary school. They do immense work in educating our young children and preparing them for national school. During Covid, we have been haemorrhaging staff from the sector. When that happens, women in particular are challenged and it creates further barriers for them taking up the positions the Minister talked about and being able to go back to work and take up roles outside the home. I welcome what the Minister has said and in his conversations and discussions with the Minister, Deputy O'Gorman, I ask him to take that formal step when it comes to early childcare providers.

In recognition of the issues the Deputy referred to, we ensured that the childcare sector would be able to participate in the EWSS even if particular providers did not meet the revenue decline threshold. It is also the reason that it is the only sector referenced in the scheme. A provider who is in it now will continue to be in it until next April. The sector is undergoing huge change. We need a successful and viable sector to support families, particularly when parents decide to go back to work or to be in the office or workplace for some of their working day. Between the extension of the scheme that I have confirmed, the continued participation of the childcare sector in the scheme and the work the Minister, Deputy O'Gorman, is doing beyond that, it should meet the issues the Deputy referred to.

That is welcome. I call for a whole-of-government approach when the Minister is around the Cabinet table and conversations are happening with the Ministers for Education and Children, Equality, Disability, Integration and Youth in order that we can start to look at the sector in a formal setting and see it as part of the Department of Education. They are teachers and educators and provide so much value. We need to value them in terms of our State's response to that.

I thank the Minister for his reply. The sector, like many others across the board, was in jeopardy for many people providing the service and it was haemorrhaging staff. Ultimately, for women who have lost their jobs or are considering going back to work, if the childcare providers are not in place, it creates further barriers.

I echo what has been said. We need to look at this sector as a matter of urgency. The staffing situation in the childcare sector is at crisis point. The facilities cannot recruit staff. There is something fundamentally wrong when childcare staff using baby wipes are, in some instances, being paid less than the staff who pack those wipes onto supermarket shelves. The system needs to be looked at urgently. In a small county like Roscommon, some childcare facilities did not open in September. I got word today that another childcare facility will close at the end of December. The situation urgently needs to be addressed in the context of staff and, more importantly, of providing access for women into the workforce.

I accept many of the points the Deputy has made. I know how important the childcare sector is in supporting parents to go back to work and giving young children the support they need at the start of their life. I repeat what I said to Deputy Niamh Smyth. She made the case for a whole-of-government approach. I cannot give any better example of such an approach than saying that the childcare sector will continue to be in the EWSS, regardless of how an individual provider performs. Access to this scheme has been one of the most raised issues over the era of the pandemic. Deputies are aware of the debates we have had regarding whether sectors should be able to come into schemes, how long they should stay in schemes and what support they get. The childcare sector is the only sector where, regardless of the performance of an individual provider, the provider stays in the scheme until the end of April.

Tax Code

Richard Boyd Barrett


78. Deputy Richard Boyd Barrett asked the Minister for Finance his plans to ensure that the new 15% minimum global corporate tax rate will be an effective rate given the many reliefs, deductions and allowances which the largest and most profitable corporations avail of to substantially reduce their taxable profit and which results in many of these companies currently paying far less than the 12.5% headline rate on their gross pre-tax trading profits; and if he will make a statement on the matter. [54402/21]

Growing public outrage and international pressure has finally forced some moves towards having a minimum effective corporate tax rate to deal with the phenomenon of aggressive tax avoidance by some of the wealthiest corporations in the world. Although the Government resisted quite hotly, it has now agreed to an effective rate of 15%. Will it actually be an effective rate, because the 12.5% was not effective, and these companies utilise loopholes in the tax code to avoid paying their fair share of tax?

On 8 October, Ireland joined 135 other member jurisdictions of the OECD framework in reaching a two-pillar agreement to address the tax challenges that have arisen from digitalisation. Pillar 1 will see a reallocation of a portion of the income of very large companies from source jurisdictions to market jurisdictions. Pillar 2 will introduce a global minimum effective tax rate of 15% on businesses with a global turnover of greater than €750 million.

It is important to note that 95% of the companies operating in Ireland are outside the scope of this agreement and will continue to be subject to a headline corporate tax rate of 12.5% on their trading profits. I take further comfort from assurances from the European Commission that it plans to propose a faithful implementation of the OECD agreement within the European Union.

As regards the suggestion that companies currently pay far less than the 12.5% headline rate, I remind the House of the published statistics of the Revenue Commissioners, which show that for the year 2019, the most recent period analysed, companies paid an effective corporate tax rate of 10.3%, with foreign-owned multinationals paying an even higher rate. While this is below the headline corporation tax rate of 12.5%, it is relatively close when compared with many of our competitors, and this close alignment of Ireland's headline and effective rates contributes to the tax certainty which so many investors say is an important factor in choosing to locate operations here in Ireland.

The Revenue figures to which the Minister refers, which I have in front of me, do not say what he just said. What they say for 2019 is that there was €195 billion worth of pre-tax profits, before deductions and allowances, and that €10 billion was paid on that. That is not 10% or anything like it, it is 5.6%. The reason the Minister can claim that it is 10% is because about €84 billion of their pre-tax profits are not taxed at all because they benefit from deductions, allowances and reliefs. It is in that area that these companies have exploited loopholes in the tax code to write down their taxable profits, so they end up paying tax on only about half of their actual profits, mostly through intergroup transactions, paying themselves royalties and paying for the use of patents from their own company, which is a scam. How are we actually going to make them pay the effective rate?

I have the figures here in front of me as well. I am sure I got them from the same place Deputy Boyd Barrett did. He is correct, in the sense that credits and deductions are used, but that is not the same as tax avoidance. That is where we differ. Credit, for example, with regard to recognised research and development is not tax avoidance, it is a legitimate way of the tax code recognising that something is happening inside a country that is valuable and that can create employment and investment. It is a common feature of business and corporate tax policy all over the world. The figures – I am sure they are from the same website and publication as Deputy Boyd Barrett has - are very clear. All companies had an effective tax rate of 10.3%; foreign-owned multinationals had an effective tax rate of 11.1% and US-owned multinationals had an effective tax rate of 11.5%.

I want to pre-empt what will probably be the Minister's final comment by saying we value the jobs these companies bring to this country. They do create employment and we want those jobs here. That does not mean they cannot pay their fair share of tax. Revenue figures show the major reliefs and allowances they benefit from are intragroup transactions worth €16 billion in 2019 as a cost to the Exchequer. They are from amalgamations, losses brought forward and other reliefs like that, not research and development. I refer to the big ones. That is why they are paying themselves money, which is profit, but writing it off as a cost. It would be like me saying my ma came up with a brilliant idea and I have to pay her for that brilliant idea and then I claim that as a deduction off my income tax. Revenue would laugh me out of the room, but that is what these corporations are doing. They are writing their own tax bill. The Minister knows it, and the OECD knows it. That is why there is a reform process. What are we going to do to make sure they pay an effective rate?

In his efforts to pre-empt what I was going to say, we had a bit of a hallelujah moment. Deputy Boyd Barrett just said he values the jobs that are here. It is the first time in our years of debating this that I have heard him say that. I think he and I have had a little bit of a breakthrough in this debate.

Give him the application form.

It is great that all this is being recorded. If he does value them, surely he can then understand why we want them in the country and that we need to have a tax code that is competitive, which is why we have had this debate regarding the low rate. While we now agree on something regarding these jobs being valued, where we continue to disagree is that Deputy Boyd Barrett sees, for example, the write-down of an expense as tax avoidance, whereas I see the write-down of an expense in the tax code as a tax policy recognising that there are costs involved in something that will ultimately generate a profit or an income, and that is recognised in how something is taxed. That is our difference.

That is what is recognised by the Minister.

Let us recognise all we have agreed on this evening.

Tax Credits

Denis Naughten


79. Deputy Denis Naughten asked the Minister for Finance if he will review the relief available under the incapacitated child tax credit; and if he will make a statement on the matter. [54323/21]

Denis Naughten


132. Deputy Denis Naughten asked the Minister for Finance if he will review the incapacitated child allowance; and if he will make a statement on the matter. [53577/21]

The financial pressure that is placed on families providing full-time care for a child can be horrendous. A recent study from the National University of Ireland, Galway, found that the average annual cost for families of an autistic child amounted to €28,000, relating to private services, lost income and informal care. The current incapacitated child credit is just €3,300, which is insufficient to meet the costs facing parents.

I propose to take Questions Nos. 79 and 132 together.

The legislation governing entitlement to the incapacitated child tax credit is contained in section 465 of the Taxes Consolidation Act 1997, as amended. The legislation provides that an individual is entitled to a tax credit of €3,300 per qualifying child for a year of assessment if he or she proves that at any time during the year of assessment, he or she has a child who is under 18 years of age and is permanently incapacitated by reason of mental or physical infirmity, or if over the age of 18 years at the beginning of the year, is permanently incapacitated from maintaining herself or himself and had become so permanently incapacitated either before reaching 21 years of age or after that age while receiving full-time instruction at any university, college, school or other educational establishment.

A child under 18 is regarded as permanently incapacitated by reason of infirmity only if that infirmity is such that, if the child were over the age of 18, there would be a reasonable expectation that he or she would be incapacitated from maintaining himself or herself.

For the purposes of the credit, "maintaining" means the ability to support oneself by earning a living from working. In order to establish entitlement to the credit in respect of any such child, medical evidence provided by the child's medical practitioner is required to confirm both the extent of the incapacity and whether the incapacity permanently prevents the child from being able in the long term to maintain himself or herself independently when over the age of 18.

Detailed information on the operation of the tax credit is available on Revenue's website.

This is a matter that was assessed, albeit some time ago, in 2009, when the former Commission on Taxation recommended for reasons of equity that, ultimately, “the appropriate level of State support be provided to all incapacitated children through direct expenditure and that the tax credit be discontinued”. Such a course of action would obviously require very careful consideration and is not on the agenda at the present time. Equally, while tax measures are monitored by my Department as a matter of course, I currently do not have plans for a detailed review of the credit. I am sure Deputy Naughten wants to raise particular issues in regard to the operation of the credit and I will respond at that point.

I thank the Minister. The 2019 research by NUI Galway was carried out by Áine Roddy and Ciaran O'Neill. That research showed that the annual average cost per child for families amounted to €28,464.69 and was related to private autism services, lost income and informal care. By comparison, the annual State expenditure per child with autism in terms of related health, social and education resources was €14,192. That means families were out of pocket to the tune of €9,489.60.

The key findings have shown there is a significant economic burden associated with autism among children and adolescents in Ireland and that a considerable proportion of this is being borne directly by parents rather than by the State. This is also being reflected in the costs faced by other parents of children with disabilities. That is why I believe we need to look at this again in light of this research.

I thank the Deputy. I would be interested in seeing that research if it is possible for the Deputy to give me a copy.

That is no problem.

The Deputy will be aware there is tax relief available on medical expenses and on many different forms of healthcare. I entirely recognise that for a family looking after a child who has a very high level of medical need, the financial costs involved are exceptional. What the Government tries to do through the supports we make available to that family, through measures in the social welfare code and through our tax code, is to provide a meaningful contribution to the costs those families face. I know that, in many cases, costs are rising, they can be great and they can happen at very difficult times for a family. As I said, I am very happy to look at the report to which the Deputy referred to see if there is anything in it that should lead to a revision of our thinking in regard to the operation of this credit.

I thank the Minister for his constructive response, which I acknowledge. The out-of-pocket expenses for private therapeutic interventions and assessments were the highest category of medical costs associated. The average cost incurred by families was €948 but there was a considerable variation in that, ranging from zero right up to €14,400. Part of that variation is the variation in access to services. I will give one practical example. The waiting list at present for occupational therapy and assessments in the west is in excess of two years. Families are forced to go privately to get an assessment, which costs anywhere between €500 and €1,500, and the ongoing costs per session are between €75 and €100.

The State is failing in its obligation to provide early intervention to these children. They cannot get access to public services and families are forced to go down the road of trying to source private services. This whole area needs to be looked at and resourced properly to give every child, regardless of family resources, the opportunity to get early access to those vital services.

The issue of the funding of the very important services to which Deputy Naughten refers is separate to the operation of this credit. I know the Minister for Public Expenditure and Reform and the Minister for Health did an awful lot of work in the run-up to the recent budget to increase significantly the funding available for many of the services the Deputy has referred to. The Minister, Deputy McGrath, also worked with the Minister for Education, Deputy Foley, in regard to the help that can be given to young children who need additional support in our schools. To go back to the original point the Deputy has raised, if he gives me a copy of the report, I will be very happy to have a look at it.

Tax Code

Éamon Ó Cuív


80. Deputy Éamon Ó Cuív asked the Minister for Finance the last time the threshold was increased of the gift a parent can give to a child for them not to be liable to have it assessed as part of their life gifts or inheritance from a parent; if he plans to increase the tax-free ceiling of the annual gift a parent can give a child from €3,000 in the forthcoming Finance Bill; and if he will make a statement on the matter. [54332/21]

One of the ways of increasing taxes is to leave tax thresholds the way they were. A threshold was introduced some time ago where people could give a gift to a child of €3,000 per annum and it was not assessable as part of the lifetime gift to that child in terms of inheritance or gift tax. My question is twofold. When was that threshold set and is it intended to increase the threshold?

I thank the Deputy for his two questions. That threshold was last changed in section 149 of the Finance Act of 2003. The Deputy will be aware of the operation of the credit. It was set in 2003 and I do not at this point have any plans to change it further, although I am aware of the role it plays in supporting families in the gifts they make from a parent to a child. However, with all of the other competing demands on the Exchequer at the moment, I was not in a position to change it in the recent budget.

As I pointed out, not increasing thresholds is actually increasing taxes. The Minister might tell me what is the increase in the consumer price index since 2003 and, in other words, in the real value of a gift. Would the Minister not agree that many parents give gifts to their children at a time of crisis for their children, at a time when there are childcare costs or child costs that were unforeseen, or at a time when they want to get their own property and furnish it, and so on? It seems it is an awful lot of bureaucracy if a parent gives €4,000 or €5,000 in that they then have to make a whole lot of tax returns for that extra €2,000 over a lifetime. I am not saying the person would ever reach the threshold and they might never actually have a tax liability because the inheritance tax threshold is €335,000, but it is all of this paperwork for very little merit. Would the Minister not consider increasing it to, say, a modest €5,000 given that would probably only give the real value of what was there in 2003?

The Deputy is correct that the non-indexation of different thresholds more often than not leads to an increase in tax revenue. As to what has been the change in inflation since the last change was made in 2003, the change in inflation in recent years alone would mean that the real impact of that threshold has now increased, given it has been left unchanged. I cannot at this point give the Deputy an indication as to what will be in next year's budget as we are still dealing with the Finance Bill for this year's budget. As I said, I was not in a position to make a change for this year but I accept that, because it has not been changed for some while, it is now covering off a larger share of any gifts that might be made at the moment from parents to children.

Does the Minister have any idea what an increase to €5,000 would cost the Exchequer?

Yes. An increase to €5,000 would have an approximate cost of €1.1 million.

This is just going to ordinary people who are giving a gift because many parents are now supporting children. Will the Minister give me an outline of what is the total tax take of the State? Thereafter, we will do a little sum in our head as to how much €1.1 million would be out of the €60 billion, €70 billion or €80 billion income and revenue the State is taking in.

The Minister might tell me what the tax take of the State is.

I gave a short answer to the Deputy's first question and I will give a short answer to the second one as well. It is a very low share of the total amount of tax that we take in. I accept that it has not been changed for some time and I thank the Deputy for bringing it to my attention.

Question No. 81 replied to with Written Answers.

Insurance Industry

Niamh Smyth


82. Deputy Niamh Smyth asked the Minister for Finance the way he plans to increase competition in the insurance sector; and if he will make a statement on the matter. [54355/21]

Ruairí Ó Murchú


123. Deputy Ruairí Ó Murchú asked the Minister for Finance the engagements he has had with insurance underwriters to bring more into the market; if an update will be provided on the work of the Office to Promote Competition in the Insurance Market in this regard; and if he will make a statement on the matter. [54345/21]

I want to ask the Minister of State his plans to increase competition in the insurance sector and if he will make a statement on the matter.

I propose to take Questions Nos. 82 and 123 together. As the Deputy may be aware, in July the Government published the first implementation report of the action plan for insurance reform, which shows that work is progressing well, with 34 of the 66 actions contained therein completed. The sub-group’s focus now is on implementing the outstanding actions on time.

One of the key achievements of the Government’s reform agenda is the new office to promote competition in the insurance market, which I chair. The office is an important element of the Government's ambitious insurance reform programme to help to enhance competition, reduce costs and increase the availability of insurance cover. Accordingly, the office has held meetings with a wide range of stakeholders, including insurance companies, representative bodies, civil society groups and State regulators on the issues surrounding competition. Its aim is to help expand the risk appetite of existing insurers and explore opportunities for new market entrants in order to increase the availability of insurance.

I met the CEOs of the major insurance providers in Ireland earlier this year and intend to meet them again in the next few weeks to discuss a variety of issues, including expanding their risk appetite. Separately, I am meeting various specialist firms that operate here and that are seeking to expand and provide cover in particular areas of the market. The office is also working closely with IDA Ireland to bring new entrants into the Irish insurance market and to improve its overall competitiveness. This will, in the first instance, seek out providers that offer insurance in areas which have been identified as pinch points in the Irish market where some customers are encountering difficulties in obtaining cover. This is exacerbated by Brexit in some cases.

The Government is committed to securing a more sustainable and competitive market through deepening and widening the supply of insurance in Ireland. It is my intention to work with my Government colleagues to complete this progress as part of the action plan for insurance.

The Deputy will only have the chance to come in once, along with Deputy Ó Murchú, as we have run out of time.

I know the Minister of State has taken a real and personal interest in this issue because he knows it has created huge barriers for people in business, the voluntary sector and the community sector. Sadly, the Alliance for Insurance Reform has done significant and extensive surveys of more than 450 businesses and voluntary and community groups and it has reported increases rather than decreases. The Minister of State talked about personal injuries and there are certain caps in that area. How can the Government act to improve competition and get additional underwriters into the market as a matter of urgency?

I ask the Minister of State to give a bit of detail on the specialist insurers he is talking about engaging with. I dealt with the Minister of State before on the matter of a particular business that is now facing the cliff edge. We are talking about a pile of firms and Deputy Doherty and others brought up the case of another firm in Dundalk earlier. We will be hitting that cliff edge in February, March or April. We need the duty of care legislation and then we need more providers to come into the sector to provide what is necessary. Otherwise we will have community centres, community groups and businesses closing. I know other specific answers will be required for the likes of the leisure industry. I ask the Minister of State to give some detail on that and I have no doubt that I will be talking to him about this afterwards as well.

I thank the Deputies for their comments and I want to give practical examples of what we are talking about. I met the Alliance for Insurance Reform last week and I hope to meet it again next month and the month after. It has indicated a number of pinch points where some groups are having difficulty getting insurance and that is a particular problem. The survey it referred to only included a number of businesses and is not reflective of all those businesses that have no problem getting insurance. The average price of insurance for a business, which includes sole traders, is about €2,000 per annum. That is a Central Bank figure; not mine. I will also meet Insurance Ireland and Brokers Ireland to discuss the areas in Irish society where there are particular difficulties obtaining insurance. Ice rinks were mentioned in this regard a week ago in a Topical Issue matter. Sometimes if four, five or six groups are operating in the country they might have to come together to help them help themselves in getting insurance collectively. That is the principle matter I will be pursuing in the coming weeks.

Written answers are published on the Oireachtas website.