Local Government (Charges) Bill 2009 [Seanad Bill amended by the Dáil]: Report and Final Stages.

This is a Seanad Bill which has been amended by the Dáil. In accordance with Standing Order 113, it is deemed to have passed its First, Second and Third Stages in the Seanad and is placed on the Order Paper for Report Stage. On the question "That the Bill be received for final consideration", the Minister may explain the purpose of the amendment made by the Dáil. This is looked upon as the report of the Dáil amendment to the Seanad. The only matter, therefore, which may be discussed is the amendment made by the Dáil. For Senators' convenience, I have arranged for the printing and circulation of the amendments. Senators may speak only once on Report Stage.

Question proposed: "That the Bill be received for final consideration."

I wish to report to the Seanad an amendment agreed on Committee Stage in the Dáil giving effect to exemptions from the charge for certain persons vacating their home due to long-term incapacity due to illness, and for certain persons providing accommodation for relatives.

Senators will recall we had an engaging and productive debate on the Bill in the Seanad two weeks ago. In the course of the debate, the Minister accepted the point made by a number of Senators that the Bill should make it clear that no liability for the charge would apply in the circumstances the Minister has outlined. I am pleased to provide more details to Senators of the provisions now incorporated in the Bill.

Section 4(5) caters for a situation where a person who owns a principal private residence vacates the dwelling in question because he or she is long-term incapacitated as a result of physical or mental illness. As the dwelling in question would no longer be used by the person concerned as a private principal residence, a liability to pay the charge could arise. I accept there is an issue as to whether it would be reasonable in these circumstances for the person concerned to incur the liability, notwithstanding the modest level of the charge.

The amendment provides a number of criteria that must be satisfied for the exemption to have effect. In the first instance, the incapacity must be long-term and due to mental or physical illness. Typically the incapacity would be brought about by infirmity due to old age or a form of senile dementia. Other forms of illness could result in incapacity. The essential point is that the person concerned is incapable of independent living into the future. It must be the person's principal residence that has been vacated. If the person does not own the residence he lives in, no charge would arise anyway.

The person concerned must not own the property in which he or she will reside in the future. In such a case the person would be the owner of at least two properties, in which case the exemption from a modest charge of €200 would not seem to be required in respect of the property that has been vacated.

Clearly, a person who is incapacitated due to long-term illness will require long-term care. This is often but not always secured through a nursing home or care centre. In such a case the Revenue Commissioners will permit that person's income to be offset against the cost of residing in the nursing home or care centre. It is often the case that the property that was the person's principal private residence is let out to defray the costs of the long-term residential care. The Minister was disinclined in bringing forward this amendment to require the person in care to pay the charge in these circumstances.

Sometimes the person who is incapacitated goes to live with and is looked after by someone else, normally a relative. In these circumstances, the Minister was also disinclined to provide that a charge should be paid on what used to be the incapacitated person's principal private residence. The relative who has taken the incapacitated person under his care has probably relieved the State, at least partially, of the cost that would otherwise be associated with institutional care of one kind or another. The Minister was not inclined to impose a charge in these circumstances, even if the dwelling concerned is rented out.

Section 4(6) addresses the issue of what are referred to as granny flats. In general the Local Government (Charges) Bill does not apply the €200 to dwellings that are not separate. A granny flat that constitutes an integral part of the residence in question will not be liable for any charge, assuming that the overall building of which it is a part is a principal private residence. Nor will a granny flat be liable for a charge where it is owned by the person who resides there if it is his principal private residence.

The question relates only to instances where the granny flat constitutes a separate dwelling and is owned by someone other than the resident, normally the person who owns the primary residential property of which the granny flat forms part or is associated with. This is the situation the amendment is designed to cater for and a valid case has been made to make it clear properties of this kind are exempt from the charge. Accommodation of this nature is usually provided by sons and daughters so they can look after their parents and in circumstances where the parents want to retain a measure of independent living for as long as possible.

Although it is secondary to the consideration I mentioned, the point should also be made that the cost to the State is likely to be far less where people are cared for by their relatives as opposed to taking such people into long-term care.

In drafting this amendment, the Department and the Office of the Parliamentary Counsel have taken note of the legislation that applies in the case of the home carer tax credit and the amendment I am reporting to the House retains many of its features. A number of conditions must be satisfied to avail of the exemption. The property in question must be provided free of rent, be located less than 2 km from the principal residence of the owner and the respected parties in the properties concerned must be related to each other.

There are sound reasons such conditions should apply. This exemption is being provided to recognise the altruism relatives show one another. This would be compromised if rent was charged. Going further, if rent is charged, the owner can afford to pay the €200 annual charge. The criterion of its being on the same property or within 2 km is consistent with the fact that one party is meant to be caring for the other, something that cannot be done if they live long distances apart. The 2 km provision follows precedent from Revenue's legislation dealing with the home carer tax credit.

The definition of relatives is inclusive. It will in no way act as a limitation on bona fide relatives or those of spouses or partners. The provisions on legal guardianship and wards of court complete the amendment in respect of people who are not related as such but whose legal standing to each other amounts to the same thing.

I commend Senators on their previous contributions to the Bill and commend the amendment to the House.

I welcome the Minister of State and welcome this important amendment. As the Minister said in her contribution, there was a robust debate in the Seanad during which many Members gave their views on the Bill, with a particular focus on this area, where we felt there was an inadequacy. I welcome the role played by Fine Gael in identifying this because it was unfair to those elderly relatives of people who owned property while living in a granny flat or in a cottage nearby. It also affected those in nursing homes who would have been liable for this charge on their family homes. The Minister listened to the debate and while he did not accept our amendments he undertook to consult with the necessary parties to draft amendments to address the anomalies we identified. We accept and support this amendment. Having watched the Dáil debate on the various stages and on the amendments I felt that the time necessary for proper analysis and debate was not afforded to the Bill. Some Stages were guillotined in the Dáil where I had hoped it would receive further analysis.

I raised concerns here about issues such as data transfer and the Data Protection Act in respect of information required to operate this scheme. Local authorities will depend on the transfer of data from the Private Residential Tenancies Board, the Revenue Commissioners, the Department of Social and Family Affairs and the ESB. The Minister of State should note that those concerns remain and will need to be revisited for clarification.

There were calls for the exemption of registered holiday homes because this charge will increase the overheads of running these tourism projects, which are Irish, and that will have a negative impact on their viability because the owners will pass on the charges to their tenants. The Minister did not address this issue although it was identified.

There is much concern about the exemption of the property included in the rental accommodation scheme, RAS. For example, Galway City Council has over 600 houses on the RAS. Those houses have a secure five year contract, each worth approximately €11,000 per annum. The local authority pays over €3 million in rent on this scheme yet there is no income under this legislation that can accrue from these houses. There is a potential income of €1.2 million. This issue was raised at the meeting of Galway City Council last Monday where members were very concerned and held the strong view that the houses in the RAS should not be exempt. The Minister of State should note that fact. The scheme was created to increase income for local authorities and in general we all support that idea.

Fine Gael supported the general principle of the Bill from its outset because we support the giving of autonomy to local authorities in raising funds. Galway City Council is only one example and it has 600 houses in the RAS, which offers a large potential income that should not be exempted. That is an inequity in the Bill. I pointed out on Second and other Stages that landlords in the RAS who are exempt from this charge might also let another, similar, house that is not in the RAS on which they must pay the charge. That anomaly must be addressed.

The amendment is welcome and will address the concerns we raised, especially in rural areas where elderly parents may remain in the family home while their children have built a new house on the farm. At least the family home is exempt. The same applies for those on the cottage acre where a son or daughter might have built a house and the elderly parent, or brother or sister, might live in the adjacent house although they do not own it. I welcome this amendment as will those people.

I compliment the Minister and all those associated with inserting this amendment because it is absolute common sense. It reflects the value of mature debate on such issues. The Minister of State has outlined the thinking behind the amendment. Although the Minister did not accept amendments in this House he indicated that he would review them. He was true to his word. The Minister of State said all there is to say and I will not parrot her. I am pleased to accept and support this amendment.

I support this Bill and welcome the Minister's stance on it, and his openness to suggestions from me and others. I called for this Bill before the Government was willing to introduce a charge. An Indecon report identified this many years ago but there was a refusal to introduce it. I am not alone in saying this because Donegal County Council has been to the forefront in lobbying Government for such a Bill because it is rated third in terms of gains from this Bill. It is important to see the money that accrues from these charges as complementary to, not a substitute for, the existing local government charges.

I am glad, however, that the Minister introduced the Bill. A great deal of time was lost between its announcement in the budget and now. I am concerned about where in the Six Counties the advertising campaign will take place because many in the Border region have holiday homes and the charge comes into effect on 1 July. It is a good Bill to a degree but it is full of holes. It is rushed legislation although I do not understand why because it had been flagged. This was evident when the Minister initiated the debate here with an amendment to exempt caravans. This was followed by my amendments which are now before us. There are other holes, and amendments not taken which significantly weaken the Bill. Legislation will catch certain people whom the Government did not intend should pay. That was definitely not the intention of the Opposition.

It is always satisfying to see one's amendments accepted, in this case in respect of granny flats and people in long-term residential care. When I put forward my amendments I told the Minister that they would need to be redrafted. I put them forward to show that there were holes in the legislation and I am glad the Minister accepted them. Senator Glynn said that they were "absolute common sense". I and Senator Coffey put down similar amendments and we argued vigorously that this needed to happen, but the Minister refused to accept them. It went to a vote and the Government parties refused to accept the amendment. The Minister gave no indication to me, Senator Coffey or the Seanad that he would reconsider it. Luckily for us and thankfully maybe for the Cathaoirleach, we raised the matter again at the eleventh hour under a section that did not deal with the issue and sense prevailed.

The two amendments inserted here are fine with me. There is, however, a difficulty which the Minister will have to consider and I could cite many cases in which it would apply. For example, if I was to build on to my house a self-contained granny flat for my mother and father and they were to move out of their family home, under this legislation I would be exempt from being liable for a charge of €200 for such a granny flat. My mother and father's house is fit for habitation and this charge applies to houses that are suitable for habitation. Their house would be unoccupied because they would have moved in with me in order that I could care for them and that they would not have to go into a nursing home. My parents would be liable to pay the €200 charge in respect of their house, which would be unoccupied and would not be rented. That is one of the flaws in this legislation.

I am sure it would be the view of the Minister and the Government that the charge should not apply to the owner of such a house. If one is an owner of a property but does not reside in it, one must pay the charge unless one qualifies under one of the exemptions. Amendment No. 1, which provides for an exemption in the case of a person who has a physical infirmity, would not suffice for an exemption from the charge in the circumstances I outlined. Not everybody who decides to move into a granny flat does so because he or she is infirm or suffers from a mental or other illness. Sometimes people chose to do so to feel secure, to be close to their family and not to be isolated. Where a person has moved into a granny flat to be beside his or her family and he or she does not want to be isolated, that person's house in the countryside would be unoccupied. In the context of the example I gave, will the Minister of State clarify if my mother of father or anybody else's mother and father in such circumstances would have to pay this charge on their home? For the record, I want to clarify that I do not have a granny flat attached to my house, I simply cited that as an example.

A number of such issues need to be dealt with in the legislation. Local authorities will pursue people for this charge in various circumstances. I cited the example above and could cite countless others not related to granny flats where it would not have been the intention to apply this charge but where it nevertheless will be applied.

I agree with Senator Coffey that the rental accommodation scheme should have been examined in the context of this legislation. Another difficulty I have with the legislation is the definition of the types of houses to which the charge will apply in terms of the suitability of a house for habitation. That is too broad a definition and allows local authorities to consider a derelict house in this context. It raises questions as to what constitutes a house being suitable for habitation, it is one that has electricity connected or one that is lying empty. I mentioned the family home that is unoccupied. Would it have to be bulldozed for it to be exempt from this charge? Amendments could have been proposed, dealt with and accepted that would have improved the substance of this Bill.

I welcome the Minister of State. Because I agree with all the points made, particularly those made by Senator Coffey, I will not restate them as I do not see the point in doing so. I welcome the inclusion in the Bill of amendment No. 1 which covers the particular concerns I had.

I thank the Senators for their remarks. They have made a significant and an important contribution to this Bill. It is the better for such consideration and the local authorities will benefit from its enactment. We look forward to a revitalised local government system with the introduction of this new local government charge.

Senator Coffey raised the issue of holiday homes and this matter will be kept under review. The Minister wants to encourage the maximum uptake of the rental accommodation scheme and that is why the owners of such properties are exempt from the €200 charge. It is established Government policy to facilitate the migration of persons from the supplementary welfare allowance scheme to the rental accommodation scheme and the latter is a more satisfactory and cost effective way of meeting our social housing needs. The supplementary welfare allowance scheme is demand-led and it is difficult to guarantee housing standards in that regard. It can lead to undesirable concentrations of such dwellings in certain communities. The rental accommodation scheme is a more cost effective scheme for both landlords and the State. Because landlords do not have to incur the same level of vacancies between lettings, the State can guarantee a stable flow of tenants and in return landlords are prepared to give a discount to the State for this reason. Even though there is a loss of revenue to the local authorities in this respect, because of the cost effectiveness of the rental accommodation scheme, it has been decided at the moment to give an exemption in respect of this charge.

Given the number of vacant houses, landlords are currently queuing to participate in the rental accommodation scheme, regardless of the incentive.

I will convey that point to the Minister. This matter will be kept under review.

Senator Doherty raised the issue of advertising this charge. It will be advertised in the daily newspapers. The Department will fund it and 31 July and not 1 July will be the operative date. Local authorities will supplement such advertising with local advertising and both will be overseen by a project board on which the Department and the local authorities are represented.

In circumstances where one's parents move to live in one's house, if the persons concerned are incapacitated, the charge will not apply to their principal private residence. However, if the persons concerned are not incapacitated, the charge will apply to their principal private residence but they would have the option to rent it.

I believe I have covered all the issues raised. I will convey the Members' comments to the Minister. I thank them for their comments and wish them a well deserved break.

Will the Minister of State clarify a matter?

The Senator cannot speak again on this Stage.

I have a question, I do not want to make a speech or raise the incapacitation issue. I wish to ask about the advertising of the charge, as it is important for the functioning of the Bill. Will this charge be advertised on an all-Ireland basis, for example, in daily newspapers such as theIrish News and the Belfast Newsletter in the Six Counties where many people have properties?

It had not been the intention to do so. It will be advertised in the daily newspapers.

This needs to be advertised in those newspapers as well, otherwise people will be caught out. If the charge is not advertised in the newspapers in the Six Counties, people living in Belfast or in Derry will not know that this charge is in force and must be paid within a number of weeks.

We will consider that. I will convey that view to the Minister.

Bill reported without amendment.

When is it proposed to take Fifth Stage?

Question proposed: "That the Bill do now pass."

I wish to make a final comment on this Bill which is about to be passed. I thank the Minister and his officials for engaging with Members on this Bill. Issues of concern were identified and we would not have raised them unless we had a genuine and sincere reason to do so. I outlined the concerns we have. We will monitor closely the implementation of this legislation at local authority level. We highlighted our concerns during the debates on Second and other Stages regarding the financial capacity of local authorities to manage adequately the implementation of this legislation. They will be depending on the Private Rental Tenancy Board and other agencies in this respect, which we do not believe are up to speed in this regard. We outlined that in detail during the debate on earlier Stages.

I thank the officials who drafted the legislation and wish it well as it becomes law. It will create an important stream of income for local government. That is essential and it is the basis for this Bill. Local authorities throughout the country will welcome the fact that they will have a new income stream available to them. I hope that this stream of revenue will not be a substitute for the central fund from which allocations are made to local authorities. There have been cuts of up to 10% in that fund. This steam of revenue should not plug that gap but should be an additional source of income for local authorities.

I ask the Minister and his officials to monitor implementation of the legislation. Senator Doherty referred to this matter already. He said it is estimated that Donegal County Council will rank third highest in terms of the accrual of revenue. There will be a big deviation in the revenue accruing to local authorities ranging from €1 million up to €12 million. Some local authorities will not derive a large amount of revenue on foot of this legislation. I ask the Minister, his officials and the Department to monitor this and not to be of the view that every local authority is accruing a large amount of revenue on foot of this legislation as some local authorities will only derive a minuscule amount of revenue compared to others.

I thank the Minister of State, Deputy Áine Brady, the Minister, Deputy Gormley, who previously dealt with the Bill in the Seanad, and the officials who drafted the legislation for the approach they took in that regard and for the open-minded approach to suggestions from the Opposition. In contrast, last night no matter what was said by the Opposition, we were told that no amendments would be accepted because the Dáil was not sitting. Thank God the Local Government (Charges) Bill was debated at a time when we could listen to common sense and that some of us with experience could help to make the Bill better.

If we had more time we would be able to discuss the ins and outs of the legislation. The Minister referred to the Bill as being a short one. Perhaps it should not be that short because, for example, the parent who is moving into the granny flat should not have to pay the €200 charge if he or she is not incapacitated. We all know that will happen. Thousands of people will not be affected but it should not happen as that is not the intention of the Bill.

I thank the Minister of State for the manner in which the Bill was handled. Senator Coffey's point on monitoring the legislation is important as it provides significant potential to local government to raise additional funding. The Government has suggested a figure of €40 million or €50 million but the figures from the CSO and the Library & Research Service suggest €97 million. We all hope it will be at the upper end of the scale. Local authorities might need some assistance. For example, if we do not advertise in the Six Counties, that will have an immediate effect on my county of Donegal. We need to focus on certain minor issues. I accept there may be teething problems and a close analysis of the implementation of the legislation is required. I look forward to receiving a report in September on how local authorities have managed to date in terms of funding accruing from the charges. I thank the Minister of State, Deputy Áine Brady, for her attendance and how she has dealt with the Bill. I wish it well.

I, too, thank the Minister of State, Deputy Áine Brady, and her officials for the time allocated for debate on the Bill. I had a good input into the debate and I followed it with great interest. I support the calls for the chairs of the SPCs on housing and local policy to provide feedback to us on how the legislation is implemented, the take-up and the positive effect it will have as an income stream. I thank everybody who was involved in it.

I thank the Minister of State, Deputy Áine Brady, and the Minister, Deputy Gormley, for bringing forward the Bill. It is an extra string to the bow of the powers of local authority members. I am on the record as having said previously that without money, local authority members do not have powers. This is a revenue stream that did not exist heretofore. I accept there will be teething problems; to think otherwise would be foolish.

I agree with Senator Prendergast that housing SPCs have a pivotal role to play in the administration of the Bill. It is now a matter for the locally elected members of town councils that are housing authorities, and borough, county borough and county councils to work out means for the improvement of our housing stock, especially for the elderly and the underprivileged. This is the funding base with which to do that.

I thank the Minister of State and colleagues on all sides of the House for their contributions. Everything that has been said in both Houses has, to a greater or lesser extent, depending on one's viewpoint, contributed to the passing of the Bill today. I thank the Minister and her staff for that.

On my own behalf and on behalf of the Minister, Deputy Gormley, I thank the Senators for their positive contributions. I assure them the Bill will be monitored closely. I appreciate what Senators have said in that regard. I thank them and wish them a well deserved break.

Question put and agreed to.