Vol. 1052 No. 2
5. Deputy Richard Bruton asked the Minister for Finance if he has considered how the tax system might make a better contribution towards adjustment to a longer and more fruitful retirement through supporting rightsizing, early release of pension savings in certain circumstances, more flexibility in continued working from employers, better recognition of family carers and in other ways; and if he will make a statement on the matter. [15262/24]
I believe the tax system can make a much better contribution to positive ageing, especially around issues such as family caring, working beyond retirement age and the rightsizing of homes. Has the Minister looked at reforms that might promote such positive outcomes?
The Deputy has raised the importance of policies designed to support individuals in retirement. As both career paths and the shape of life after retirement change, Government policies need to continue to align with the needs of retirees. Pensions have their own special treatment within the tax system to encourage these preparations. Ireland operates an exempt-exempt-taxed system. Contributions to pensions, within certain limits, are exempted from income tax, pension fund gains are exempted from income tax and income from pension drawdown, other than a tax-free lump sum, is taxed. This is intended to encourage individuals to save appropriately for retirement.
As the Deputy will be aware, the Government remains fully committed to supporting and protecting the most vulnerable in society through both tax and expenditure measures. The income tax system contains a number of provisions that have been introduced to provide additional supports to family carers, such as the home carer tax credit, the incapacitated child tax credit and the dependent relative tax credit. Those over 65 are treated in a more favourable manner by the income tax system. There is also relief from capital gains tax for transactions involving individuals' homes. These existing supports should facilitate many of the concepts the Deputy referred to.
In this context, it is important to consider whether the tax system is the appropriate vehicle for further supports for retirement income. Taxation is only one of the levers available to the Government and, generally, the presumption should be that non-tax measures should be considered before the use of a tax-based measure. I reiterate, however, that the Government remains committed to taking appropriate action to support retirees where required. If the Deputy has any suggestions or policy proposals, I will be more than happy to engage with him and to have them looked at in detail.
I agree with the Minister that tax is only one of the levers, but I might give him some examples. Approximately 50% of people would like to work beyond their retirement age but most of them are denied that opportunity. Fortunately, we are not among that group. That is something that could be promoted by making flexible working more amenable for employers to deliver through tax breaks.
About 90% of people in my age category live in homes that are too large for their need, but there is no support for rightsizing. The Minister might have seen a recent column by a prominent journalist describing the difficulties in that regard.
To take another example, while we do not support family caring through the tax code, we do support paid carers, but only 1,600 cases of those reliefs are being provided for. The intention is there, but it is not getting through in a lot of these cases and there needs to be innovative thinking.
I thank the Deputy. Those are all important issues he raised. Tax policy can play an important role in supporting wider public policy objectives, and when it comes to vacant bedrooms, for example, and the spare capacity that is there, we have the rent-a-room relief scheme and there is already a generous CGT relief for a principal private residence. Nevertheless, again, if the Deputy has any ideas or proposals, we will be more than happy to look at them.
I agree with him about having a system that is as flexible for workers as possible. We have made some important strides through the changes to the State pension system, for example, allowing people to work for longer and postpone drawing down the State pension to make up for any shortfall they may have in PRSI contributions and to get an actuarially varied pension as a result. All those flexibilities are there and our colleagues in the Department of Enterprise, Trade and Employment have made important moves to enshrine flexibility in work environments generally in the context of retirement ages. Of course, the public service has led the way by allowing people to work up to the age of 70. That said, tax does have a role and I would be very happy to engage with the Deputy.
To take that example, if a work contract states a person can work to 66, he or she cannot take up the options the Minister is offering to work beyond 66 because the employer's contract will trump the right to take up the social welfare option. There needs to be some innovative thinking, between the Minister’s Department and the spending Departments, to come up with some workable initiatives, because in the midst of a housing crisis, 90% of people aged 65 and over living in homes that are too big for their needs is a missed opportunity.
There is a need for some approach to this without waiting for this potential commission on caring. There are things that could be done more quickly.
When it comes to employment, we have made important progress. There are complexities where you have an existing contract of employment in place in the private sector that specifies a retirement age that is mandatory in nature at a certain point in time. However, beyond the existing contracts, it will be possible to make change and I know that is a policy area the Department of Enterprise, Trade and Employment is focused on. We have a lot of issues that have to be considered when it comes to the changing demographic nature of our population and the consequences in terms of care, health, incomes into old age, property and the issue of underutilised residential stock. It always has to be on the basis of supporting people, giving them options and incentivising decisions rather than a stick approach. That is what will characterise the Government's approach to these issues.
6. Deputy Ged Nash asked the Minister for Finance if he will consider deferring the planned excise duty increase on petrol and diesel due for August; and if he will make a statement on the matter. [15013/24]
31. Deputy Pádraig O'Sullivan asked the Minister for Finance if he will detail the estimated cost to the Exchequer of the reinstatement of fuel excise relief in April 2024; and the estimated cost of the reinstatement in August 2024; and if he will make a statement on the matter. [15286/24]
On budget night the Labour Party moved a motion to seek a deferral of the planned excise duty increases pushed on punters at the pumps, at least until budget 2025 next October. On budget night the Minister, Deputy Ryan, refused to accept the Labour Party amendment to the motion and we have seen excise duties rise at the pumps on 1 April - "April fuels day", as it was dubbed by Pat Flanagan in the Sunday Mirror. We have seen that increase in April and we will see a further increase in August. I am making the case that should be deferred and at least reviewed in the budget in October 2024.
I propose to take Questions Nos. 6 and 31 together.
At the outset, the Deputies should note that the Government and I are conscious of the implications of fuel costs for all sectors of society. This is reflected, as I said earlier, in the fact that, in 2022, in light of the acute impact rising prices were having on households and business, the Government provided for excise rate reductions in the order of 21 cent, 16 cent and 5.4 cent on a litre of petrol, auto diesel and marked gas oil, respectively. These temporary reductions were initially due to end at the end of August 2022, but following review and monitoring of fuel prices, they were extended until February last year, with a phased restoration beginning in June of last year, followed by a second restoration last autumn. As the Deputy will be aware, a final restoration of excise rates was due to take place at the end of October last year, but in the budget I provided for a further extension until the end of March this year, with a phased restoration occurring in two stages on 1 April 2024 and 1 August 2024.
As the Deputy has referred to, the first stage of this final restoration came into effect on 1 April last. Inclusive of VAT, the mineral oil tax rates on petrol, auto diesel, and marked gas oil increased by 4 cent, 3 cent and 1.7 cent per litre, respectively. The amounts due as part of the final restoration scheduled for 1 August this year are of the same magnitude. In addition to rate increases related to reversing the 2022 mineral oil tax cuts, increases to the carbon component rates of mineral oil tax on marked gas oil are legislated to come into effect on 1 May 2024, when the amount charged per tonne of carbon dioxide emissions from non-auto fuels increases from €48.50 to €56.00. This increase, inclusive of VAT, will add 2.3 cent per litre to marked gas oil. Increases to carbon component rates of mineral oil tax on petrol and auto diesel are legislated to come into effect on 9 October this year, when the amount charged per tonne of carbon dioxide emissions increases from €56 to €63.50. The 9 October rate increases will add, inclusive of VAT, 2 cent per litre to petrol and 2.5 cent per litre to auto diesel.
A number of factors impact the final retail price of fuels, including energy market dynamics, wholesale pricing, individual retail pricing policy, transport costs, exchange rate fluctuations and taxation. While taxation affects the final retail price, amendments to tax rates cannot fully absorb price shocks given the larger impacts of energy markets and embedded costs as well as pricing policy at wholesale and retail level. The Government has provided relief to consumers and businesses since early 2022 through a number of support measures, including the temporary reductions to which the Deputy has referred. However, these measures were introduced as temporary support measures and involve an ongoing cost to the Exchequer while they are retained.
With regard to the parliamentary question from Deputy O'Sullivan, he should note that the estimated receipts in 2024 from the recent 1 April increase in mineral oil tax rates and the increase scheduled for 1 August are €102.4 million for the 1 April increase and just below €51 million for the 1 August increase. The Deputies should note that I will continue to monitor and review the position in the coming months in the context of the final phase of excise rate restorations due to take place in August this year.
I thank the Minister for his response. I think it does make sense for him to review the position and defer the Government-imposed planned increase set in train for 1 August. We have had a 4 cent increase per litre on petrol and 3 cent on diesel. The Minister has outlined that. He has said, quite correctly, that the Government is not responsible and cannot manage all price shocks. This is not a price shock based on the international market and international trading conditions. This is a Government-imposed increase on hard-pressed consumers. Consumers are still getting stiffed at the checkout. Consumers are, quite frankly, being ripped off by telecoms companies, and while the Minister will say inflation and the cost of living are coming down, the reality is the rate of increase is slowing and the cost of living is still extremely high, especially for those working people on small or fixed incomes. The Minister needs to reflect on this. He will be familiar with the issues that Border garage retailers are experiencing and the differential between North and South. That is putting real jobs at risk in Border counties like my own in County Louth.
I appreciate the figures the Minister gave me of €102 million and €51 million for both of those increases. My question was with specific regard to the numbers because when we have this debate, it is easy to call for deferrals and putting things on the long finger. It is also important to highlight that it is €153 million, and the people calling for deferral will need to explain their own position on the other side as to where they might source that money or otherwise.
I know people are hard pressed. That goes without saying. All of us in the House and those belonging to us, our friends and family, watch the forecourts and the prices going up and down. That volatility is making things difficult for people. However, I welcome the Minister's statement today and when he earlier answered other Deputies' questions in terms of keeping the position under review. That is the responsible position to take and he has intervened in the past, as he alluded. Going forward, if the case arises, I hope he will be given an opportunity to possibly intervene again next year.
I get the impression the Minister is trying to say this is costing the Exchequer. I submitted a question a week ago and got a response about the amounts of taxes and levies on a litre of petrol and a litre of diesel. Right now he is getting 89 cent per litre on one litre of diesel. That is higher than at any time in the past five years. I am not talking about the percentage; I am talking about the actual amount, and we still have two increases to go. It will be 15% higher by 9 October than at any time since January 2020. On petrol, it is the same story. It will be 10% higher. This impression that it is costing the Exchequer to defer these increases is not actually true. Look at the actual amounts going in there. I agree with Deputy Doherty that these increases will devastate filling stations along the Border. The differential on 9 October will be approximately 15 cent per litre. It will close them.
I thank the Deputies for their comments. Deputy Nash can certainly use the language he has used about it being a Government-imposed planned increase. He should also acknowledge that a Government cut the excise, and what is at play on 1 April and 1 August is a restoration of that reduction.
However, I have acknowledged that the situation is volatile. Deputy Doherty raised the case earlier of the garage owners around the Border area. It is a valid point. It is one I am conscious of. It is one that I will take into consideration later in the year when we are making further decisions and we are reviewing this in the lead-up to 1 August. There are different factors that impact on what the price will be and there are also different factors that determine where people will do their shopping, including where they will purchase their fuel. Of course price is one of those factors and there is a price difference currently, in particular in respect of petrol. I acknowledge that. I am aware of that. I have asked my Department to monitor that. I acknowledge the substantive point. It is not one that I am blind to. That is why I have given a commitment to keep this under review and to have a look at it again as we approach that final restoration.
It has to be kept under review. It fact, the Minister should make a clear statement here today that he is actively considering deferring the planned increases in August and October, respectively, which will make the differential between retail prices in the South vis-à-vis the North much more significant.
The Minister is quite correct. When people cross the Border from Drogheda or Dundalk to fill their car in Newry, or just across the Border in the petrol stations there, they take an extra few miles of a trip to do their shopping. That is impacting on retailers right across the Border region, as other Deputies have pointed out. I implore the Minister to keep this under review. It is having a real impact on the bottom line for hard-working people. My own area has been subjected to significant tolls. For example, there are a number of tolls around the Drogheda area. Increased tolls increase excise. Increased carbon taxes have been legislated for by this Legislature, but I am not talking about carbon taxes. I am talking about excise duty and the impact it is having on the everyday lives of motorists, including people getting to work and people operating small businesses.
I join Deputy Nash in supporting calls to look into the impacts that will be felt, particularly in Border counties. When one is talking to hauliers or people whose business is on a forecourt, one hears genuine concern about fuel tourism and the impacts on Border counties going forward. That is possibly compounded by the UK chancellor's recent decision to extend the deferral of excise across the Border.
I suggest that the Department should undertake some type of retail impact assessment of the impacts on businesses across the Border. The fact that the Minister is keeping the decision on excise rates under review, as he has said, might allow him to move when the time is appropriate or when he sees fit.
Does Deputy Harkin wish to add something?
Yes. Thank you, a Cheann Comhairle. I am glad to hear that the Minister will keep it under review but we need to hear more than that because for filling stations along the Border, as I said, by 9 October the differential will be 15 cent per litre. They cannot remain open. They cannot sell fuel at that difference in price. It is not only stations along the Border that are affected. If one looks at the figures for the average number of kilometres driven each year by car owners, one will see that the national average is 16,300 km, but in Sligo and Donegal it is 17,500 km and in Leitrim and Roscommon it is 19,000 km. The cost to ordinary car owners is much greater in rural areas. Finally, I come back to what I said earlier. Right now, the Minister is getting 89 cent per litre on diesel and 98 cent per litre on petrol, which is higher than the amount he was getting per litre at any time in the past five years. He does not need increases in August or October.
I acknowledge the points that Deputies Nash, Harkin, Pádraig O'Sullivan, Doherty and Danny Healy-Rae have made in respect of this issue. I have given a commitment to keep it under review, in particular as we move through the month of July. I acknowledge and accept that this is a significant issue for forecourt retailers in Border counties. I also acknowledge that there is a wider economic impact. We have had a cross-Border dynamic in both directions depending on the relative strength or weakness of the currencies, and what the price is before conversion, etc. I accept that it can drive footfall and shopping spend to either side of the Border, depending on the way the numbers line up at any point in time. I note that. I have asked my Department to keep this under review. I understand it is a question that is wider than excise, but where excise falls can make a difference in terms of the decisions that consumers make in the Border area. I accept that and I will take that into account as the year goes on.
7. Deputy Pearse Doherty asked the Minister for Finance for an update regarding the issue of mortgageability as it relates to homeowners affected by defective concrete blocks, including his Department's engagement with the Department of Finance and the proposal of bridging finance products by the banking sector under the enhanced defective concrete block scheme; and if he will make a statement on the matter. [15231/24]
I raise again the serious, pressing and critical issue of homeowners affected by the defective concrete block crisis in my own county and elsewhere. The Minister and his Department are centrally involved with this and have responsibility for key issues, including the issue of future mortgageability of remediated homes. I ask the Minister again to update the Dáil on his engagement with the banking sector, with his Department and with the Department of housing on this critical issue. I attended a meeting where 1,300 people came out to voice their anger that this scheme is not working. They are very annoyed because it seems that the Department of housing and the Minister's colleague, the Minister for housing, are stopping this proposal from the banks.
I thank Deputy Doherty for raising this issue again.
As the Deputy will be aware, the overall Government response on the problems associated with defective concrete blocks is being led by my colleague, the Minister for housing. His Department is engaging with impacted householders and relevant stakeholders and has put in place a scheme of financial support to help affected homeowners.
On the issue of bridging finance products, I understand that some homeowners have identified a potential challenge with funding the commencement of remediation works in circumstances where it is necessary to make a payment to professionals engaged on a remediation project prior to receipt of the first grant payment. Banking and Payments Federation Ireland, BPFI, submitted an interim funding proposal to the Department of housing to address this timing mismatch. BPFI proposes that funding would be provided upfront from a BPFI member to a homeowner on the commencement of remediation works. It is proposed that this funding would subsequently be repaid to the BPFI member on the release of the approved grant payment, subject to the remediation work meeting all of the requirements of the scheme.
Last year, I asked my officials to engage with BPFI and with officials in the Department of housing to support that Department in exploring the funding mechanism proposal. There has been ongoing engagement since that time, which has also involved discussion with BPFI on the potential operation of the scheme, including the level of State guarantee required by BPFI members and whether alternative approaches may be feasible.
In order to implement the proposed funding mechanism, BPFI has advised that a State guarantee would be required. To support the Department of housing in its consideration of the BPFI funding proposal, officials from my Department examined the implications of such a guarantee from both a State balance sheet and legislative perspective confirming that, under public financial procedures, all State guarantees must have a statutory basis. My officials continue to engage with the Department of housing and with BPFI to respond to any matters relating to the funding proposal. I will respond further in a moment.
This is only one part of the problem. As I said, this scheme was introduced and announced by the Government in November 2021. It is now 2024 and there are 1,300 people coming up to Inishowen to say it is not working for them. We had people telling us that they were demolishing their homes and it would cost them €100,000 out of their own pocket to rebuild them because the scheme is not fit for purpose. Many others in the room could not even do that because they did not have the ability to borrow that level of money. Five hundred people turned up in Mayo at the meeting.
It is over six months since BPFI put a proposal together to help only a number of these families in terms of bridging loan. Zero per cent bridging finance is the proposal to the Department of housing. Six months later, we still have not been able to get over this hurdle. It is ridiculous.
In the middle of all of this - I am conscious I am talking about proposals and the Minister will get up to say that the Department will need to do this and that and all the rest, and all these checks and balances have to be done - the people I was talking to in Inishowen are people who have got mental health problems. People are no longer with us today because they took their own lives as a result of issues regarding defective blocks. This is not only about crumbling homes; this is about crumbling families and mental health crumbling right before our eyes. It is shameful that there has not been a result in relation to this proposal, one way or another.
There is no reason banks today cannot step in and provide bridging finance to the homeowners concerned.
The Ministers, Deputies McConalogue and Darragh O'Brien, and I have discussed this issue again in recent days. As Deputy Doherty knows, the issue with a State guarantee is that it will require legislation and there are potential state-aid issues so I want to find a faster way of getting this resolved. There is no barrier preventing banks from stepping in and providing bridging finance to the homeowners concerned, other than their own commercial decisions. The State has legislated. We have put a scheme in place. The scheme is open. The funding is available. We want it to be drawn down. My officials will continue to work with the Department of Housing, Local Government and Heritage. I am entitled to make the point that there is no inhibition to prevent lending decisions being made to provide bridging finance today. The State is good for its money. The State is going to provide the remediation funding to the households and therefore the banks will be repaid on that basis.
To be clear, what the banks are proposing here is 0% loans to those with affected homes. They are going to provide this to non-bank customers - people who do not have accounts, borrowings or mortgages with them. This is for everybody. The easiest way for this to happen is actually for the Department itself to do it. Instead of having to go through the bank, the Department should provide this money upfront. The Minister's officials suggested that to the Department of Housing, Local Government and Heritage. When the Department of Finance received these documents, the Minister's officials wrote back and asked why the Department does not just up the money at the start instead of having to go through a middle person in terms of the finance. The point I make is that it is six months on and all the families are still left in limbo. We have papers moving from the Minister for Finance to the Minister for Housing, Local Government and Heritage, from one Department to the other and on to the BPFI and in the middle of all of this we have families in distress, who are crushed. Even if we get over this hurdle, the person I talked about who had to put their hand in their pocket and find €100,000 will still have to do this. This is just a tiny issue that will help a few people-----
I thank the Deputy.
-----and we cannot even get over that hurdle.
I thank the Deputy.
I will finish on this point.
No, the Deputy is over time. He should please respect the time.
Months ago I pleaded with the Minister and asked him to inject momentum into this issue. Unfortunately, I do not see that from him.
I want to find a way of getting progress for the homeowners as quickly as possible. I know the Minister, Deputy Darragh O'Brien, and the Department of Housing, Local Government and Heritage are examining the very issue Deputy Doherty raises about the nature of the payments and the early payments, the speed of them and so on. We could go down the road of a State guarantee and all that comes with that - legislation, potential state aid issues and examination. Like Deputy Doherty, I want speed of execution. I want to help the homeowners to draw down the money and begin to rebuild their lives as well as their homes.
Deputy Doherty is far closer to this than I because of geography and he represents these families. I can only imagine the trauma they are going through. I assure him that discussions are actively ongoing with a view to finding the best way of addressing this issue. For me, speed is one of the criteria that should decide what we do.
8. Deputy Pearse Doherty asked the Minister for Finance if he is concerned that the benefit-in-kind exemption for employer contributions to PRSAs, legislated through section 22 of Finance Act 2022, is facilitating aggressive tax planning; if his Department received recommendations from an organisation (details supplied) in June 2022 warning that such a risk would materialise; and if he will make a statement on the matter. [15232/24]
This is in relation to the benefit-in-kind, BIK, exemption for employer contributions to PRSA legislation that was introduced in the Finance Act 2022. It appears to me that this is facilitating aggressive tax planning. It also appears to me that the Department was warned this was happening, probably on more than one occasion. It was also warned prior to its introduction that it would or could happen. I ask the Minister to make a statement on this very serious matter.
Section 22 of the Finance Act 2022 removed the difference in treatment between PRSAs and occupational pension schemes in relation to the funding rules, by abolishing the BIK charge on employer contributions to an employee's PRSA. In addition, employer contributions to an employee's PRSA are no longer counted towards an employee's age related and salary percentage limits on tax deductible contributions.
These changes were recommended by the interdepartmental pension reform and taxation group, IDPRTG, with a view to improving and simplifying the pension landscape in Ireland. In discussing the possible impacts of its implementation, the report acknowledges such a change would also likely result in a change in behaviour, encouraging increased PRSA contributions. However, it also states that this is likely to be a displacement of contributions that otherwise would have been made to new single member schemes.
I can confirm that my Department did receive a paper from the Society of Actuaries in Ireland in summer 2022 which related to this recommendation. When considering the appropriate way to implement the IDPRTG recommendation, removing the BIK limits for PRSAs was examined in detail, and the submission referred to above fed into these considerations. A decision was made to proceed with a proposal to fully remove the BIK charge for employer contributions to a PRSA in order to continue to work towards the overall goal of simplifying and harmonising the pension landscape.
In relation to tax planning, I am informed by Revenue that there is a continuous focus on compliance across pensions, identifying and confronting non-compliant behaviour across schemes. This is in line with Revenue's Corporate Priorities 2024 commitment to comprehensively use the full suite of interventions set out in its compliance intervention framework to assist voluntary compliance and to provide an appropriate response to non-compliance. As with all measures, my officials and I will continue to keep this change under review and, should any necessary changes be identified, they will be considered in the context of future finance Bills.
This is a massive tax loophole that was created by his predecessor as Minister, Deputy Donohoe. It remains in our tax code despite it being pointed out to Ministers. Limiting the amount that can be contributed to a pension with full tax relief in a single year is crucial to ensure equity in our tax system, to control revenue and to prevent abuse. The changes made by the Minister, Deputy Donohoe, undermined all of those objectives. Previously, employer contributions to PRSAs were subject to income tax and USC. While a portion of those contributions could receive tax relief under the age-related percentage limit – something the Minister, Deputy Donohoe, wrongly denied at the time, this is no longer the case. Now a company director can put more than €2 million into a PRSA pension without incurring any tax whatsoever. Company directors can even avail of corporation tax relief on this contribution, providing what is being widely advertised in the industry as a tax-efficient way of extracting profits from the company and converting it into personal wealth. They can game this loophole further by employing a relative on a low salary and transferring up to €2 million from the company tax free to a PRSA on their behalf.
I thank the Deputy.
Does the Minister accept this represents a radical departure from pension policy and creates a significant loophole in our tax code?
This was a policy decision that was taken following careful examination by the interdepartmental group. The final conclusion of the report was that the differential treatment of the PRSAs for funding purposes should be abolished and employer contributions to PRSAs should not be subject to BIK.
The interdepartmental report was subject to a public consultation. The responses to the consultation showed general support for the removal of the BIK charge on employer contributions to PRSAs. Section 22 of the Act aimed to level the playing field by abolishing the BIK charge on employer contributions to an employee's PRSA and not counting employer contributions to an employee's PRSA towards that employee's age related and salary percentage limits on tax-deductible contributions. All of this continues to be subject to the overall tax relief limit, as set out in the standard fund threshold.
The Minister claims this was done on the recommendation of the interdepartmental group on pensions and tax reform but it is a clear misunderstanding of the reading of the group's recommendation, which was to abolish the differential treatment of the PRSA for funding purposes compared to occupational schemes. That was not done. Occupational schemes are benefit-limited. The changes made to PRSAs has totally reversed the position rather than equalised it, with PRSAs now providing a far higher level of free and tax deductible pension funding than under occupational pension schemes. This is a massive amount of money we are talking about. Not everybody is going to be able to do it, but some people are already doing it. The industry is telling people this is how you get your money out of your company. We have a situation now whereby even for somebody drawing a minimum wage, a company owner will be allowed to pump €2 million tax free into a pension pot and to get a tax deduction against their profits in doing so. Before this change was made in June of 2022, the Society of Actuaries warned the Department of the risk and put forward concrete proposals to avoid it materialising. The Minister, Deputy Donohoe, rejected these proposals. My question is, why?
I am aware of the proposal made by the society at the time. That was considered. A number of alternative options were explored, including an additional separate BIK limit for employer contributions to PRSAs and the new PRSA product mimicking the salary-based limits on occupational pension schemes to be used where an employer wished to make contributions to an employees PRSA.
However, both of these options were ultimately rejected. While an additional BIK-free limit for employer and employee contributions could result in an effective equalisation for most individuals, given the low levels of contributions, the rules for tax treatment of contributions would not be equalised. It was considered unlikely to be seen by stakeholders as meeting the recommendation of abolishing differential treatment of PRSAs. It would introduce new rules into an already complex and legal regulatory framework.
On the suggestion that the interdepartmental report was misinterpreted, the officials from the Department of Finance would have been part of that interdepartmental group, would have had an understanding of the intention behind the recommendation and would have fed that into the decision that was made at a policy level at the time.
9. Deputy Marian Harkin asked the Minister for Finance for an update on the review of the disabled drivers scheme; and the new criteria being considered line with international best practice. [15225/24]
18. Deputy Pádraig O'Sullivan asked the Minister for Finance when the new primary medical certificate criteria will be introduced; if he can provide any update on the process; and if he will make a statement on the matter. [15285/24]
40. Deputy Catherine Connolly asked the Minister for Finance for a status update on his Department's work to develop a new scheme to replace the disabled drivers and disabled passengers scheme with a modern, fit-for-purpose vehicle adaptation scheme as recommended by the National Disability Inclusion Strategy Transport Working Group; the number of meetings held by the senior officials group to date, and the dates of same; and if he will make a statement on the matter. [14380/24]
I seek an update on the Minister’s work on finalising the new scheme that is set to replace the disabled drivers and disabled passengers scheme. We know the senior officials group has had a number of meetings. I believe the Minister submitted a note to that group in mid-January this year. When can we expect the green light? What is the update on what is happening?
I propose to take Questions Nos. 9, 18 and 40 together.
The Deputies will be aware that the final report of the national disability inclusion strategy, NDIS, transport working group's review of mobility and transport supports, including the disabled drivers and disabled passengers scheme, DDS, endorsed proposals for a modern, fit-for-purpose vehicle adaptation scheme in line with international best practice that would replace the DDS. The working group was chaired by the Minister of State, Deputy Rabbitte, and led by the Department of Children, Equality, Disability, Integration and Youth. The Deputies should note that my Department had a significant input into the development of this report. Its views, which I share, that the DDS is no longer fit for purpose, are appropriately reflected. The NDIS report is broad-ranging because access to transport for people with disabilities is a multifaceted issue that involves work carried out by multiple Departments and agencies. Consequently, under the aegis of the Department of the Taoiseach, officials from relevant Departments and agencies are meeting to discuss the issues arising from it in order to map a way forward. That is what the Deputy referred to in her opening remarks.
My officials are proactively engaging with this senior officials group's work as an important step in considering ways to replace the DDS, as one specific personal transport response, in the context of broader Government consideration of holistic, multifaceted and integrated transport and mobility supports for those with a disability. Four meetings of the group have been held in July, November and December 2023 and last month. The Department of Finance submitted a note to the group with my approval in mid-January 2024. This note outlines a proposal for a replacement scheme for the DDS which would be a needs-based, grant-led approach for necessary vehicle adaptations that could serve to improve the functional mobility of the individual. This proposal is in line with what the NDIS transport working group report endorsed. In that context, any further changes to the existing DDS would run counter to NDIS proposals to entirely replace the scheme with a modern, fit-for-purpose vehicular adaptation scheme.
Finally, the Deputies should note that while my Department has oversight of the DDS, I do not have responsibility for disability policy but we will contribute proactively to this work. We have gathered a lot of experience and expertise in the administration of the existing scheme which can be very usefully used in designing a new modern grant-based scheme. It will be a matter for the Government to decide on any new scheme to replace the DDS. The work is continuing at the senior officials working group.
While I do not have recent answers in front of me, it seems the Minister’s remarks here today are quite similar except that there has been a fourth meeting. I accept that the Department of the Taoiseach is meeting, that the Minister’s Department is meeting, and that the Minister sent a note outlining a proposal for a new scheme. Can he give us any information on that? He says it is a needs-based grant-aided scheme to replace what is already there. That is good news and we want to hear that because what was there was no longer fit for purpose and was based on a medical model of disability which excluded many people with disabilities. I would like to hear from the Minister, even if he cannot give us full details, whether the new scheme will be inclusive and will include different types of disabilities - not only physical disabilities but also mental, intellectual and sensory impairments.
I wish to support Deputy Harkin. I have followed this issue for some time. The Minister’s response towards the end was not too dissimilar to replies we have received to previous parliamentary questions. I echo what Deputy Harkin said. The Minister might provide us with any content arising from the last meeting to give us an idea of what the outstanding issues might be. As he said, there is a proposal, or the meat of a proposal, there. If there are any outstanding issues or difficulties being encountered, we would appreciate it if the Minister could elaborate on them. As Deputy Harkin rightly said, the scheme is there since the 1960s. It is not cognisant of many disabilities or physical impairments that people might have. For some reason, Ireland is the only country to provide lump-sum tax relief. In his response, the Minister has acknowledged that we are changing how we do this but will he outline the content of the latest meetings?
The one difference in the Minister’s answer is that there has been a meeting this year. Given the context, this is unacceptable. He has to give us details about when the new scheme will be up and running. In 2001, 23 years ago, the Ombudsman told us the scheme was improperly discriminatory, overly rigid and inflexible and appeared to be causing inequity. Then we had a Supreme Court case taken by two individuals. They were successful. The Minister announced in 2020 that a review would be undertaken. That is four years ago. Then we had the complete resignation of the whole board which we found out about from the media – I believe it was the television - in December 2021. Since then we have had an ad hoc system. There was no appeals system until December 2023. Can the Minister tell us how many appeals have gone through? What is the waiting list? What is the rate of progress? We have a system in place where, if you are refused, you go back six months later. How many appeals have been successful under that?
While I do not have data on the rate of success in the appeals, I can say the volume of activity is much improved and 334 appellants have been assessed since the appeals process recommenced in December. I do not have the split - I am sure it can be provided through parliamentary questions and so on - but it represents a lot of progress. I think well over 1,000 people were on the waiting list at one time. To be fair to the members of the appeals board that I appointed, they are doing a lot of hard work and are making serious inroads into the backlog. I thank them for that. We can all recognise that the key issue here is that the gateway to the existing scheme is the primary medical certificate. The policy on the alternative gateway to a grant-based support is not one that my Department is leading on, understandably. We are the Department of Finance. We are administering the existing scheme. It cost just over €70 million in 2022. We will continue to administer it. I have made a very specific change in the scheme to accommodate a small number of cases which I felt were very genuine and needed to be addressed. We have the appeals system back up and running. I cannot give details on the emerging proposal. It would not be fair to do so until we have a final agreed proposal on what will replace the existing scheme. The work is ongoing and we are making progress on dealing with the appeals.
Deputy Connolly raised a question about the appeals board. In the appeals, is it taking on board the new philosophy that the Minister spoke about in relation to the alternative gateway?
The Minister said he is not taking the lead on this. Does the note from his Department indicate that funding will be in place for this alternative gateway when we look at the criteria that will be in place, to ensure it will be there for people who suffer from very different kinds of disability? Too many people have been waiting a long time. Many people could never even think of accessing this scheme because of the medical model. All of those people were excluded anyway, but, right now, so many people are waiting. They want to know, at least from today's questions, whether the Department's note indicated that the recommendations from the national disability inclusion strategy transport working group will be funded. If we knew that today, it would be positive news.
We obviously do not expect the Minister to announce details of any proposed scheme on the floor of the House. I do not think the Minister of State, Deputy Rabbitte, who is chairing the group, would thank him if he did. Are we working towards a deadline? Are there a specified number of meetings where a decision has to be arrived at? Will the Minister elaborate on the process that is left?
My two supplementary questions follow on from what Deputy Connolly said regarding the number of previous appeals that were heard. Will the Minister provide subsequent information in writing on the previous few years and a couple of years prior to the dissolution of that appeals board? This is to see whether we are working our way back to that capacity where we can deal with the appeals.
My second supplementary question relates to the composition of the appeals board. I understand that three different recruitment campaigns were run over nearly two years to try to populate that board. The most recent response to a parliamentary question I received indicated that five people had been appointed in the past 18- or 24-month period. Will the Minister confirm that the board is now fully staffed and actively engaging in as many cases as it can?
A question seeking clarification on whether funding is available has been asked. That is very important. It has also been asked when the new scheme will be up and running. After 23 or 24 years, that is the least people deserve. They deserve a timeline. As of 13 February, 923 people were on an appeals waiting list. I do not know where the Minister's figures are in that, but maybe he can give us details on the appeals afterwards, and let us know how many people came back after six months and were allowed to apply again. Were they successful?
We had the debacle involving the National Rehabilitation Hospital. It refused to do that. Was an analysis undertaken as to why it was in that position? Was an analysis undertaken as to why it took four recruitment campaigns to get medical professionals to sit on an appeals board, 24 years after the Ombudsman said it was not fit for purpose? We need answers.
I thank the Deputies. I got the appeals board back up and running. It is now working its way through the backlog. The latest information I have from the secretary of the board is that 834 appellants were on the waiting list as of 21 February. As I said, since the appeals process was reconstituted, 334 appeals have been assessed. The board has prioritised the waiting list using clinically based criteria.
To answer Deputy Harkin's question, it is administering the existing scheme. It is a tax-based scheme. That is the board's obligation and mandate in that respect. The priority for the Government is to come up with a modern, fit-for-purpose, needs-based grant scheme. That is what we need to do as quickly as possible because the gateway to the existing scheme in the form of the primary medical cert is too crude. I deal with it as a constituency TD as well as a Minister.
On the question of funding, once we have an agreed scheme - the Government will of course consider that - it will replace the existing scheme. The funding already being drawn down for the existing scheme is immediately available, but we will give favourable consideration to any additional funding required. We want this scheme up and running as quickly as possible. I do not believe funding will be the constraint. I will certainly be supporting it fully, once there is an agreed position.
11. Deputy Richard Boyd Barrett asked the Minister for Finance if, following the recent film industry stakeholder forum, he is planning any future changes to section 481 the film tax credit to ensure greater security of employment and incomes for workers in the film industry; and if he will make a statement on the matter. [15245/24]
For years now, film workers have been saying that film producers who get the section 481 tax credit are failing to vindicate those workers' rights. As a result, they suffer vulnerability to blacklisting and complete insecurity of employment. Similarly, writers, directors and actors say that film producers who are getting public money are not respecting their rights under the copyright directive, including the right to royalties. The stakeholder forum was supposed to address these issues. I attended it. It was a good event at which many of these issues were aired. The question is whether the Minister will now do anything to address their concerns.
I understand that the Deputy is referring to the film industry stakeholder forum that took place on 8 February this year, convened by the Department of Tourism, Culture, Arts, Gaeltacht, Sport and Media, and in which I am aware the Deputy was a participant, as he said. The forum was attended by a broad range of stakeholders, including representative bodies from the Irish audiovisual sector, unions, Departments and Government agencies. I am informed that the focus of the forum was to ensure that everyone attending was given the opportunity to voice their opinions and share their views. The event was chaired by an independent rapporteur, who also has responsibility for compiling a report to the Department of culture on the discussions. This report is currently in process.
In relation to employment rights, as part of the certification process for section 481, an applicant company must submit an undertaking of compliance with all relevant employment legislation. This commits applicants, including the producer company and the designated activity company, to comply with relevant employment legislation in respect of a film being certified. For any specific workplace disputes, the Workplace Relations Commission and the Labour Court are the organs of the State tasked with the resolution of such matters. It is appropriate that any relevant claims should be referred to these bodies for adjudication.
With regard to compliance with relevant copyright legislation, Screen Ireland has retained an independent facilitator to meet with key stakeholders to understand issues raised, with a view to identifying viable solutions where required. It is worth noting that copyright legislation applies regardless of whether it is referenced as part of the application process for section 481 or not.
As the Deputy will be aware, as part of budget 2024, I increased the film tax credit project cap from €70 million to €125 million. This measure has now received EU state aid approval and I have signed the necessary statutory instrument. My officials will continue to monitor progress in this space and will bring any recommendations for amendments to section 481 to me, if required.
Notwithstanding what the Minister said, at the forum it was clear that actors, writers and directors are saying they are still being forced to sign buy-out contracts by producers. The producers have the whip hand. They-----
Is that to sign?
-----buy out contracts to effectively sign away those people's right to future royalties. If a film is very successful, and goes on Netflix and Amazon, those actors, writers and directors do not get the downstream royalties because they have been forced to sign a buy-out contract. Similarly, film crews stated they have been blacklisted and that their rights under the fixed term workers Act are not being vindicated. What was interesting, when I met loads of new people at the forum, was that all were talking about the lack of security in employment and income for people in the film industry. All this money is going to film producers who are systematically trying to prevent the vindication of rights for writers, actors, performers, film crew and everybody, while they are still getting loads of money from the public. This needs to be addressed.
Sin deireadh anois le ceisteanna an Aire Airgeadais. Tá brón orm faoi sin ach táimid as am. We now proceed to the Future Ireland Fund-----
Is there no response?
We are out of time. If the Deputy wants to put down a Topical Issue on that matter, I will take it.
I thank the Ceann Comhairle. I appreciate it.
