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Select Committee on Legislation and Security debate -
Wednesday, 17 Jul 1996

SECTION 18.

I move amendment No. 23:

In page 27, subsection (2), between lines 10 and 11, to insert the following:

"(m) the extent to which counselling may be needed by either spouse or any child of the marriage.".

This amendment revisits my earlier concern about the welfare of children. Subsection (2) sets out the matters to be taken into account by a court in deciding whether to make any of the various support orders and determining the provisions of such an order. We propose to add to the matters to be taken into account the extent to which either spouse or any child of the marriage may require counselling.

Where a spouse has to live off a defined share of the other spouse's earnings the payment of counselling fees may lose priority. However, if the court was able to order that counselling fees payable in respect of one spouse or the dependant's child were specifically the responsibility of the other spouse it is more likely that counselling might be availed of where required.

On the basis of preliminary examination of the matter I am disposed to accept the principle of this amendment, the purpose of which is to allow the court to settle the cost, if any, of counselling the parties to the divorce proceedings on one of the spouses concerned. Specific provision in the Bill might be feasible and such provision could perhaps be extended also to the cost of mediation. However, I am not satisfied that the amendment is framed in a way that meets the point adequately.

If provision is to be made in the Bill it might warrant a provision on its own in Part V dealing with the jurisdiction and so on of the courts. The amendment, framed as it is in the context of section 18 of the Bill dealing with the criteria for the making of financial, property and pension orders in support of spouses and children, is not set in the proper context. In the circumstances I ask the Deputy not to press the amendment now and to await my response to the point at issue on Report Stage.

I thank her and Deputy Keogh for raising the point which, if it can be addressed in the Bill, could be a useful addition to it. A corresponding amendment to the Judicial Separation and Family Law Reform Act, 1989, would also arise.

I welcome the Minister's response.

Amendment, by leave, withdrawn.

I move amendment No. 24:

In page 27, between lines 15 and 16, to insert the following subsection:

"(4) (a) The court shall not make an order under a provision referred to in subsection (1) for the support of a spouse if the spouse had deserted the other spouse before the institution of proceedings for the decree or, as the case may be, a decree specified in that provision and had continued such desertion up to the time of the institution of such proceedings unless, having regard to all the circumstances of the case (including the conduct of the other spouse), the court is of the opinion that it would be unjust not to make the order.

(b) A spouse who, with just cause, leaves and lives apart from the other spouse because of conduct on the part of that other spouse shall not be regarded for the purposes of paragraph (a) as having deserted that spouse.".

Section 18 of the Bill sets out a wide range of considerations to be taken into account by the court in deciding whether to make ancillary orders, such as property adjustment orders, lump sum orders and periodical payment orders. The corresponding provision in the context of judicial separation is section 16 of the 1995 Act. However, there is an important difference between them.

In the context of judicial separation a court shall not make an order for the support of a spouse who deserted the other spouse unless it would be unjust not to make the order. In other words, there is a special onus on the deserting spouse to justify an order for his or her support. However, in the context of divorce there does not seem to be any provision for a court in deciding whether to make support orders to take desertion into account. A deserting spouse who had been refused support in the judicial separation application could apply again on a divorce application and the reason which led to the refusal of support, the act of desertion, will simply not apply.

Whatever one's views about the merits of restricting support in the case of deserting spouses, it is desirable there should be consistency between the two items of legislation. The wording of the amendment is the same as the relevant section applying to judicial separation. It is really a matter of consistency between the two processes.

The amendment proposed by the Deputy would require the court not to make an order for the support of a spouse if the spouse had deserted the other spouse before the institution of proceedings for the decree of divorce and had continued such desertion up to the time of the institution of the proceedings for divorce, unless, having regard to all the circumstances, the court is of the opinion that it would be unjust not to make the order.

While a similar provision is to be found in the context of judicial separation, it should be noted that one of the specific grounds for judicial separation is desertion. That prohibition in separation proceedings on making financial and property orders in favour of a deserting spouse prevents a deserting spouse from benefiting from his or her desertion. In separation proceedings, the court is also required not to make an order in support of a spouse where his or her conduct is such that in the opinion of the court it would in all the circumstances be injust to ignore it.

A similar provision would apply in divorce proceedings by virtue of section 18 (2) (i). A difficulty in relation to the Deputy's amendment is that it could be interpreted as interfering with the grounds for divorce as set out in the referendum proposal accepted by the people. Those grounds provide that the court must be satisfied that, (a) at the date of the institution of the proceedings the spouses have lived apart from one another for a period of or periods amounting to at least four years during the previous five years, (b) there is no reasonable prospect of a reconciliation between the spouses and (c) such provision as the court considers proper having regard to the circumstances exists or will be made for the spouses and any dependent members of the family. If, as proposed in the amendment, the court was required not to make orders in support of a deserting spouse, the court would not then be in a position to make such provision as it considers proper for the spouse having regard to the circumstances and, consequently, the court would not be in a position to grant a decree of divorce notwithstanding the existence of grants for a divorce as set out in the Constitution. In other words, the amendment attempts to prohibit the granting of a decree of divorce on a basis which is not provided for in the Constitution. Clearly, the amendment on that basis is not sustainable and it cannot be supported.

I understand the Deputy's concern in regard to deserting spouses benefiting unjustly. However, I would again, direct the Deputy to section 18 (2) (i), which allows the court discretion to take conduct of a spouse into account in deciding whether to make an order in support of that spouse and in determining the provisions of such an order. I am satisfied the Bill is correct in proceeding on that basis and it does not lead to the difficulty which would seem to be presented by the Deputy's amendment. In the circumstances, I am unable to accept the amendment.

Carlow-Kilkenny): I was going to support Deputy O’Donnell’s amendment because I felt desertion has often been used selfishly. People leave a partner who must run the show and then return and claim credit for assets. The Minister has answered that question and has shown that the amendment interferes with another aspect of the matter. People who desert and abandon their duty should not be rewarded afterwards.

I understand Deputy O'Donnell's perspective. In the course of the debate on the divorce referendum many unfair and unjust things were said about Members of the House, including that we were in favour of marriage breakdown. No politician would favour marriage breakdown. We have enough problems in our clinics without advocating more trouble. We are dealing with an existing situation and no law can make two people live together who do not want to do so. That is the bottom line. All we can do is deal with the matter in a civilised way.

I know what Deputy O'Donnell has said is well intentioned but the court must be given some leeway on this matter also. If the provision is too inflexible, it will do more harm than good as the Minister said. While I support the Deputy's sentiments, to put that into the Bill would do more harm than good.

I note what the Minister says in that desertion is one of the grounds for an application for judicial separation. That is why there is now inconsistency with the wording of the referendum in relation to the divorce jurisdiction. My purpose in putting forward this amendment is to highlight the inconsistency between the two Acts on this point. If that is how it must be, so be it, but it is a technical inconsistency in that somebody who was refused an order because of desertion under judicial separation proceedings can not be so prohibited under divorce proceedings. There is the inconsistency. I withdraw the amendment.

Amendment, by leave, withdrawn.
Section 18 agreed to.
Sections 19 to 26, inclusive, agreed to.
NEW SECTION.

I move amendment No. 25:

In page 31, before section 27, but in Part III, to insert the following new section:

"27.—Where, on an application to a Court, it appears, that there has been default in the payment of a periodic payments order, or a lump sum order, the Court may, impose interest at such rates as may from time to time be fixed by order, by the Minister for Equality and Law Reform, with the consent of the Minister for Finance, on any amount outstanding under the said orders after the dates for payment of same, such interest to run from the date of default until payment is made.".

Has the Minister the figures on the exemptions under the notification requirements which relate to the first amendment we addressed? He said yesterday he would look for them.

It has not been possible to get them within the time.

When will he be able to get them or get an indication of the number of applications in the period or in any part of the period and the number of exemptions requested? Are there two exemptions or 20?

Is the Deputy talking about the Circuit Court applications?

That would have to be collated from each circuit.

The Minister mentioned yesterday that he knew of some. Has he any indication of the number involved?

I cannot say how many there are in total.

Can the Minister send the committee some information afterwards on that matter by way of letter?

My Department would have to get that information from the Department of Justice. I imagine that Department would have to collate it from each circuit.

A written parliamentary question would seem appropriate.

That sounds like a good idea.

I do not mind having to submit a written parliamentary question. The point is that the normal position on Committee Stage is that information is available to Members. Even if there are only indications rather than full and final information——

If there was anything available it would be more accessible through my Department.

I accept that and I accept the difficulty here.

All I can tell the Deputy is that the Department is aware of three of four applications.

Even if we put down a parliamentary question next week, we will not necessarily get an answer and the Department may not have the information. Will the Minister see whether it is possible to get some information before Report Stage?

In fairness to the Minister, these applications for examptions are ongoing — one could have been lodged yesterday evening or this morning. It is difficult to see how the Minister could be aware of each and every application. I hope the Minister can circulate some information to Deputy Woods on the basis that the courts will rise shortly anyway.

Yes. There will be a break and applications will have been made before that time.

I can ask the Department of Justice, for what its worth. I would suggest a written parliamentary question at the same time for a formal response.

In principle, I do not accept that. I have been here a good few years and Committee Stage is when Deputies receive information from any Department which is relevant to a tabled amendment. That is the point. I would not like to see the practice develop whereby——

It is not relevant to this amendment.

No. It is relevant to amendment No. 1 on which the Minister promised to see whether he can get information. I want to know whether there was any development in that regard. Have several people applied to date?

We know of three of four. The relevant point on that issue was not whether there were three, 20 or 30 but that the courts were dealing with those applications and were granting them, thereby indicating that the courts were prepared to accept applications for the exemption at this point in time. That was the point and once that point is established in even one case, it establishes the basic point.

Some of the comments made yesterday on this point were rather intemperate. They were made without any basis or justification and left some in doubt as to the validity of their marriages. I am satisfied that the marraiges in question are perfectly in order. This is the considered and detailed advice from the authority appropriate to give it, the Attorney General. It has been verified by the court in that at least some applications have been dealt with and accepted by the courts. It is all very well for any Deputy to give an opinion or pass asperations as to judgments given by the courts but, under the Constitution, that functions is theirs and theirs alone. I regret some of the comments which may have sown unnecessary fears in the minds of some people.

I did not wish to revisit the issue and do not intend to. The Minister missed a point I made. People are human. This is a new process, new scheme and we should not be putting people through those difficulties because of late applications.

On the question of doubt, the Minister advises he is happy on the basis of information provided by the Attorney General. Others looking at the Interpretation Act have taken a slightly different view. We do not want any confusion on this.

Are the figures available? We must get our courts up to standard on the availability of figures and information. It continually arises that we cannot get information and are told that the courts cannot provide it. If a question is asked of the Department of Social Welfare today it will have the answer this evening, no matter from what part of the country.

That is because Deputy Woods left that Department.

That is true.

It is 1996 and we should have such information. I hope the technological input will be made to allow for the information that is required. Amendment No. 25 states:

. . . . Where, on an application to a Court, it appears, that there has been default in the payment of a periodic payments order, or a lump sum order, the Court may impose interest at such rates as may from time to time be fixed by order by the Minister for Equality and Law Reform, with the consent of the Minister for Finance, on any amount outstanding under the said orders after the dates for payment of same, such interest to run from the date of default until payment is made.

At our clinics we are familiar with situations in which the courts make orders for the payment of maintenance on a regular basis. However, in many cases, the payments are not made on a regular basis. There is a procedure regarding attachment of earnings which is an excellent arrangement and can work well. In our experience this is a good facility. It helps those depending on maintenance. It is especially important, for those who depend on it from week to week, that there be a weekly payment.

It is common to find that payments are made for, perhaps, four or five weeks, not made for the following three weeks, then made for another four or five weeks and then discontinued again. This means a return to court in an effort to get arrears. Women are involved in the highest proportion of such cases. They are frequently in a vulnerable situation, having children to care for. An additional difficulty can arise in going back to court where a different judge may make a different decision. I have much experience of this. It is very wearing. Apart from wanting the courts to be consistent, one wants to have the maintenance paid regularly.

If a person is an employee it is possible to attach the earnings, but this can be especially difficult in the case of a self employed person. There are many instances where self employed people can be very irregular in their payments, not because they do not have the money to make them but because they do not make arrangements to pay regularly.

Deputy Keogh has a later amendment relating to this issue, which also deals with direct debits and attempts to devise a system that works on a regular basis. The problem, especially for those who are self employed, is that it is hit and miss as to how the arrears are treated and how regularly people will pay.

This amendment does not relate to those who make proper arrangements to pay on a regular basis. We are concerned with those who do not get regular payments and who face great difficulties. The payment on a weekly basis is so important that there must be some sanction if the money is available but is not paid. A measure which could be applied in this respect is to impose interest on arrears. Imposing an interest charge is a normal sanction that applies throughout business and the work of the Government through its various Departments. Some penalty, even if it is a small one, is required to encourage the person mandated by the courts to pay the maintenance, and who has the money to make them, to pay regularly and not allow payments run into arrears.

Irregular payments lead to a build up of arrears which often become so serious as to make it impossible for them to be paid but the person to whom the maintenance is payable, who often has children to look after, must survive in the meantime. This involves seeking the help of a community welfare officer and the supplementary welfare system and then applying to the Department of Social Welfare for a regular arrangement. It ultimately means that the Department has to chase up on the person defaulting on the payments. This kind of situation arises all the time and in this context we suggest the charging of interest on arrears. Can the Minister undertake to consider the matter for Report Stage? I appreciate that the proposal is being made at relatively short notice but there is an opportunity between now and Report Stage to consider the issue further and examine whether this or another solution would be relevant.

(Carlow-Kilkenny): The problem of late payments is serious for a spouse. It can cause hardship and I agree with that aspect of Deputy Woods’s contribution. Years ago, before computers, when I taught sums in schools, there was a quick way to calculate simple interest, principal by time by rate over 100. If a £100 payment is late for a week, it works out at 15p at 8 per cent.

It would cost a fortune to calculate the interest and a better system would be if a spouse could bring a note to the supplementary allowance office, say they were due 15p interest on their money and receive it immediately. It would cost a fortune to administer the Deputy's proposal, although the intention is correct. Something should be done to discourage people from failing to pay instalments when they are due, but the cost of implementing the proposal would be totally out of proportion.

Deputy Woods is trying to focus attention on a penalty of some type to ensure that payments, whether weekly or monthly, are made on time and that lump sums are paid at the time specified. The issue is whether there should be a penalty and interest on payments is suggested in that regard. However, it does not have to be interest. It could be an additional payment or a penalty clause for nonpayment. I am inclined to support that approach because some mechanism is required to ensure people meet their responsibilities. The recipients of payments are usually desperately in need of them.

I am aware of a number of cases in which agreement was reached in the courts that one party would occupy the house and pay a certain sum to the other. However, these payments are constantly frustrated by continuous court appearances and the presentation of arguments in favour of the person occupying the property. In many cases the other party waits for years for payment and by the time it arrives, its value is seriously eroded.

I do not know if the courts can apply a penalty in such cases. If not, such a penalty should be considered because if penalties are not in place, people will use every means possible to frustrate and delay payment. This is natural because very often malice and bad feeling exists between parties in such circumstances and one will endeavour to punish the other wherever possible. On this basis a legitimate argument can be made for including a penalty in the Bill for such cases. I am interested in the Minister's opinion on this matter; perhaps other avenues are available.

The amendment is useful because it enables the committee to consider the serious problem of maintenance debtors. If one talks with people who are separated, one finds this is one of the major problems they experience, irrespective of whether they come from wealthy or poor circumstances. It arises in many cases because of the vitriol and emotional warfare which goes on between estranged couples. Maintenance payments as well as children can be used as weapons in the warfare between such people.

Deputy Woods and Deputy Keogh in amendment No. 34 are attempting to resolve the ongoing difficulties and trauma of spouses, who are dependent on those payments, who must keep returning to court because a maintenance debtor continues to frustrate the court order. This is particular extreme in relation to self-employed maintenance debtors. The pathetic fact of many broken marriages and divorces is that one salary supports two households.

Deputy Woods's proposal is that interest or some penalty should be imposed on maintenance debtors. I agree with Deputy Walsh that the position must be improved. Research in the District Court of the failure rates of people who are meant to support a spouse or a child indicates a very poor record. Serious efforts must be made to avoid a situation where people can with impunity ignore court orders to support another person. Will the Minister indicate whether his or any other Department have any forthcoming proposals to improve the position with regard to maintenance debtors?

As Deputy Woods correctly suggested, it has not been possible in the time available to consider the proposed amendment in detail. It will consider it between now and Report Stage. However, I foresee serious practical difficulties with implementing an interest provision in the form suggested by the amendment regarding period payments, although the difficulty is smaller as far as lump sum orders are concerned. The argument in that area is stronger because a defined amount is ordered to be paid on a specific date. It may be that the provisions of the Courts Act on interest would apply to a lump sum order. As Deputies are aware, the Courts Act provides that interest, at a fixed rate, is payable on a court award of a specific amount of it is not paid within a particular time.

The periodic payments provision would present a major practical difficulty on which Deputy Browne touched. He is correct that the practicalities are mind boggling. In effect, it would mean that the maintenance creditor must keep a running account in banker form of every payment made and calculate, for example, ten days interest on £160 or 14 days interest on £90 almost like a bank statement. Given the complications involved, it would be impractical. It might be practical for a lump sum order and I will examine it in that regard.

Regarding enforcement in general, the amendment is welcome. As Deputy O'Donnell rightly pointed out, it provides us with an opportunity to consider the practicalities involved. Remedies are available but we are discussing a periodic payment order of the court.

We were in Mountjoy a week ago. It takes in 6,000 people a year for 430 places. These places are overbooked at present because there are 610 inmates. Prison is the ultimate sanction for defiance of the court but it is not real or practical.

Interest on a running account will not make that such difference. I have addressed the issue in every way possible. That is why we included the provision in the Maintenance Act, 1994, that it should automatically be attached unless the respondent shows it should not be when the original order is made, without having to come back. A lot rests in the hands of the Judiciary and a firm approach by them could substantially improve the situation. I will consider the issue between now and Report Stage.

Are we too rigid when dealing with the courts?

Some people think we are not rigid enough.

We do not like to make things mandatory, but we must spell out clearly what we are doing. We do not want to include something which, in two or three years' time, we will want to adjust. The Department of Equality and Law Reform has the same ethos as the Department of Justice in that it also deals with the courts. However, that ethos is too rigid. Other Departments are more flexible in their approach to things although I understand why it is important for the Department of Justice to be careful.

The Department of Equality and Law Reform is the most flexible Department.

I appreciate that. Should we not give the Minister power to make more regulations in this area so that he will have the flexibility to try out new systems? If they do not work, he can re-examine the regulations and try to find another way of doing it.

I will think about that.

The problems many constituents face often fall between these orders and statutory instruments. We need to be flexible because we are dealing with families. There is a huge volume of statutory instruments and regulations in social welfare which are designed to meet changing circumstances. Easy pay systems were introduced a few years ago for corporation and council payments, ESB payments, etc. However, there is no such system for many poor families who must pay their television licences, although they are buying stamps for the future. Recently, I spoke to people in St. Vincent de Paul who said they did not know the effect it had on the workings of this area. It may be better to be a little more flexible.

I thank the Minister for his helpful comments. Deputy Browne said he was worried about calculations. When I write to officials about a particular case, I give details of the amount of money outstanding, the period for which it is outstanding and the defaults and payments at different stages. Any solicitor who deals with such cases does the same. We must have simple ways of dealing with this problem. Deputy Walsh mentioned a problem for which there could be an administrative solution. If the house is split and one person accepts money for their half of the house, how will it be paid on a regular basis? Deputy Keogh's amendment relates to this area. Perhaps the Minister might consider my amendment on Report Stage.

Deputy Woods is suggesting I should consider giving myself the power to bring in and evaluate systems. He refers to the ethos of the Department of Justice. Every Department has its own ethos. The ethos of the Department of Social Welfare is and always had related to systems. Perhaps that is why the Deputy approaches this from a systems angle. However, the difficulty is that systems do not work well in such cases because each case is different. It is not easy to devise a system to cover them all. This is a difficult area. Part of the problem is that marriage breakdown, leaving aside divorce, causes financial difficulties. People are struggling now and we have not yet dealt with divorce. This leads to maintenance recovery which makes it a complex and difficult area. If the maintenance debtor can afford to pay — prior to that an order should ot be made against that person unless they are in a position to pay it — they must do so and the courts have the powers to take draconian steps to ensure that happens. I am not enamoured of the interest concept as far as a periodic payments are concerned but I will consider it as far as the lump sum payments are concerned because it could have a key role there.

I accept the principle of delays. Deputy Woods's amendment states: "impose interest at such rates as may from time to time be fixed by order". It would be bad to have a fixed rate of interest, but it would be worse to have to calculate it from one week to the next. It would cost more money to pay officials to supervise this activity than it would if there were 3,000 late payments in any given week.

If they pass it over to me, I will do it and they will not have to worry about it.

Such supervision delays civil servants from doing other work. It might be easier to charge a 10 per cent levy on a late payment of £100, for example, than varying interest rates and watching exchange rates. I will help Deputy Woods if he wants me to do so.

I must be careful in case I mislead the Minister. The ethos of the Department of Social Welfare, when I was Minister, was people not systems. The systems were there to help the people. I do not know what has happened since.

Amendment, by leave, withdrawn.
Section 27 agreed to.

Amendments Nos. 26 and 27 are related and may be discussed together by agreement. Is that agreed? Agreed.

NEW SECTION.

I move amendment No. 26:

In page 31, before section 28, to insert the following new section:

"28.—From and after the passing of this Act, value added tax shall not be chargeable on services provided to any of the parties by barristers, solicitors, psychiatrists, psychologists, other registered medical practitioners, marriage counsellors, mediators or social workers in contemplation of, or in connection with, an application to a Court under this Act or under the Judicial Separation and Family Law Reform Act, 1989.".

Amendment No. 27 states:

Where property is transferred voluntarily by a spouse for the benefit of the other spouse where both spouses were party to a marriage that has been dissolved and in circumstances where if the transfer had been made pursuant to a court order it would have attached the benefit of the exemptions provided for in sections 29, 30 and 31, such transfer shall be treated for the purpose of stamp duty, capital acquisitions tax and capital gains tax as if it were made pursuant to a court order and the benefit of sections 29, 30 and 31 shall apply for such transfers.

The purpose of amendments No. 26 is to ensure that the State will not impose a charge on professional fees in family law disputes. The value added tax charged by the State on professional fees inflates costs and increases the difficulties involved in family law disputes. Perhaps the Minister can inform the committee as to the amount the State receives in relation to VAT charged in such disputes? If there are approximately 3,000 family law applications per year in the District and Circuit Courts, at an average cost of £2,000, this represents a gross of £6 million per year and only covers the lawyers' side of the equation. Value added tax of 21 per cent on that figures represents over £1 million. Value added tax does not apply in cases where people are receiving civil legal aid, but there are other costs relating to counselling and professional services.

Following the passage of this legislation, it is estimated that a backlog of 10,000 to 15,000 will come before the courts in the next five years. At an average cost of £2,000 per case, this represents £30 million with value added tax estimated at over £6 million. I mention this because the State is, in effect, obtaining a cut from family law cases. The European Union is also taking a cut because it receives a percentage of Ireland's total VAT collection. The Minister has attended conferences where the European Union stated that it wants to support families, tackle marriage breakdown, help people and reduce stress. We want this to be achieved at EU and national level. If we want to support families under pressure and in danger of breakdown, perhaps it is time to remove VAT charges on professional fees in this area. At the end of the day, either the State, through civil legal aid, supplementary welfare, etc., or those involved in marriage breakdown are obliged to pay. That is not a welcome development.

Amendment No. 27 provides that tax exemptions from stamp duty, capital gains tax and capital acquisitions tax will apply to voluntary transfers without the necessity of seeking a court order. Such transfers are often made when a marriage breakdown or divorce occurs. However, further settlements or arrangements can be made later in life. If these are made on a voluntary basis and recorded formally by solicitors, it should not be necessary to return to court to obtain the exemptions. I commend these amendments to the Minister.

On amendment No. 27, I am not a great conveyancer and I am not aware of the intricacies involved in changing the rules relating to stamp duty and capital gains tax in the transfer of property. However, amendment No. 26 offers a very sensible proposal. It may not be accepted by the Government, but it is reasonable to suggest that VAT be removed from professional fees, particularly those charged by lawyers. When VAT is added to lawyers' fees, costs increase dramatically. If we are to cater for those involved in divorce proceedings and family breakdown in practical terms, we should try to keep costs at a minimum.

It is noticeable that the burden of VAT on individuals who avail of services is much greater than that relating to corporations. Individuals or corporations registered for VAT can claim it back on their own taxes if they are that way inclined. Ordinary people involved in a marriage breakdown who are not registered for VAT must pay a whopping 21 per cent on all professional services. There is no rebate or way they can claw back that money in the way that professional persons can if they are registered for VAT. I encountered this problem while working for a firm of solicitors where large bills for fees were charged to clients. The cost of litigation was much greater for individuals than for corporations or persons registered for VAT who could claim back their money. The ordinary Joe or Josephine Soap was obliged to pay that 21 per cent. There is no refuge from that, no way of clawing it back. It is a sensible proposal put forward by Deputy Woods and is a pragmatic concept. I would welcome the Minister's response to amendment No. 26. Perhaps there is some way in which the State could help to reduce the charges and burden of cost of litigation in divorce proceedings.

I support Deputy Woods's reasonable amendment. It is laudable in that its main thrust is to keep costs down. While the burden on the applicant as calculated by Deputy Woods would be significant, that on the State would not be significant in overall terms. I appeal to the Minister to seriously consider taking it on board. If he cannot do so, perhaps he would consider it on Report Stage.

I do not wish to anticipate the Minister's reply but I remind him that circumstances broadly similar to those proposed by Deputy Woods apply in the transfer of lands. We can do it for farmers and have done so for many years for the farming community. If we can do it for them, surely positive consideration could be given to people bearing the brunt of marriage breakdown and to those who have suffered considerably. The farming analogy is one we should not lose sight of. We were prepared to introduce special rates of stamp duty and a special VAT rate for farmers and their sons. If we can do that for them, we can do it in this instance.

Does this mean a farmer could avail of these special rates and the labourer working for him could not? It should be clarified. Does amending this legislation open the door for all services? Many services should not have VAT imposed.

Deputy O'Donnell referred to Josephine Soap. There are none in Donegal. We call them "Palm Olives". It makes the same point.

That is a sexist remark.

Will the Minister to consider the reasonable proposal by Deputy Woods? If there is any reason the Minister cannot accept it, we would like to hear it.

The position on VAT being chargeable in the circumstances outlined in this amendment is governed by European Union VAT laws——

I was not far out.

——with which Irish law must comply. Under European law, professionals, including solicitors and barristers, are required to register and charge the tax once they are over the registration threshold. However, the supply of services by medical practitioners and non-profit making organisations closely related to welfare and social security are exempt under the sixth VAT directive and are not liable for the tax. Provisions governing VAT are contained within the VAT Act, 1972, as amended, and it would be inappropriate to include them in any other Act. I must, therefore, oppose amendment No. 26.

So far as amendment No. 27 is concerned, I appreciate what Deputy Woods is seeking to achieve. However, I am concerned that it may go too far. Under the proposed wording, it might be possible that all transfers of property between former spouses would continue to benefit from the capital taxation exemptions. I would like to take time to consider Deputy Woods's amendment in more detail before Report Stage in consultation with the Minister for Finance who is the Minister with responsibility for taxation matters. It would also be necessary to consider the effect of any changes on the related provisions of the Family Law Act, 1995.

The Minister is not happy with amendment No. 26?

I wish to press the amendment.

Amendment put.
The Select Committee divided: Tá, 10; Níl, 12.

Ahern, Michael.

Kenneally, Brendan.

Browne, John (Wexford).

Moffatt, Tom.

Fitzgerald, Liam.

O'Donnell, Liz.

Gregory, Tony.

Wallace, Dan.

Hilliard, Colm.

Woods, Michael.

Níl.

Browne, John (Carlow-Kilkenny).

Kemmy, Jim.

Dukes, Alan.

Mitchell, Jim.

Finucane, Michael.

Mulvhill, John.

Flanagan, Charles.

Taylor, Mervyn.

Gallagher, Pat (Laoighis-Offaly).

Timmins, Godfrey.

Harte, Paddy.

Walsh, Éamon.

Amendment declared lost.
Section 28 agreed to.
Sections 29 to 31, inclusive, agreed to.
NEW SECTIONs.

I move amendment No. 27:

In page 32, before section 32, to insert the following new section:

"32.—Where property is transferred voluntarily by a spouse for the benefit of the other spouse where both spouses were parties to a marriage that has been dissolved and in circumstances where if the transfer had been made pursuant to a court order it would have attracted the benefit of the exemptions provided for in sections 29, 30 and 31, such transfer shall be treated for the purpose of stamp duty, capital acquisitions tax and capital gains tax as if it were made pursuant to a court order and the benefit of sections 29, 30 and 31 shall apply for such transfers.".

In view of what the Minister has said, I will withdraw this amendment and consider resubmitting it for Report Stage.

Amendment, by leave, withdrawn.
Section 32 agreed to.
Sections 33 to 38, inclusive, agreed to.

Amendments Nos. 28 to 32, inclusive, are related and may be discussed together. Is that agreed? Agreed.

I move amendment No. 28:

In page 35, before section 39 to insert the following new section:

"39.—The Pensions Act, 1990, is hereby amended as follows:

(a) subsection (4) (inserted by the Pensions (Amendment) Act, 1996) of section 5 shall apply and have effect in relation to section 15 as it applies and has effect in relation to section 12 of the Act of 1995 with the modifications that—

(i) the reference to the said section 12 shall be construed as areference to section 15,

(ii) the references to subsections (1), (2), (3), (5), (6), (7), (8), (10) and(25) of the said section 12 shall be construed as references to subsections (1), (2), (3), (5), (6), (7), (8), (10) and (25), respectively, of section 15, and

(ii) the reference to section 2 of the Act of 1995 shall be construed as a reference to section 2,

and

(b) in section 10 (1), by the substitution for paragraph (cc) (inserted by the Pensions (Amendment) Act, 1996) of the following paragraph:

‘(cc) to issue guidelines or guidance notes generally on the operation of this Act and on the provisions of the Family Law Act, 1995, and the Family Law (Divorce) Act, 1996, relating to pension schemes (within the meaning of section 2 of the Family Law Act, 1995 and section 2 of the Family Law (Divorce) Act, 1996;'."

The effect of these amendments is to extend the provisions of the Pensions Act, 1990 and other Acts to take account of the introduction of a divorce jurisdiction in this State. Amendment No. 28 provides for the application of the provisions of section 5 (4) of the Pensions Act, 1990, which deals with the making of ministerial regulations in respect of section 12 of the Family Law Act, 1995, to section 15 of this Bill. Section 12 of the 1995 Act provides that a court may make a pension adjustment order following the grant of a decree of judicial separation. The Pensions Act, 1990 is amended by the Pensions (Amendment) Act, 1996 to provide that the Minister for Social Welfare, with the consent of the Minister for Equality and Law Reform, may make regulations specifying guidelines for the purposes of section 12 of the 1995 Act. The purposes of these guidelines is, inter alia, to make provision in relation to the manner in which pension benefits, transfer amounts, etc. should be calculated.

Section 15 of the Family Law (Divorce) Bill makes provision similar to section 12 of the 1995 Act for the court to make a pension adjustment order following the grant of a decree of divorce. The purpose of this amendment is to make regulations specifying guidelines for the purpose of section 12 of the Act of 1995 to apply equally to section 15 of the Bill. This amendment will also enable the Pensions Board to issue guidelines or guidance notes generally to the pensions industry and other interested parties in respect of the provisions of section 15, dealing with pension schemes.

In the case of amendment No. 29, the Criminal Damage Act, 1991, provides for offences of damage to property. Under the Act as it stands, it is an offence for a spouse without lawful excuse to damage or threaten to damage his or her family home. The purpose of this amendment is to extend the Act to cover divorced persons. The effect is that former spouses may be prosecuted under the 1991 Act, in respect of damage done to what was the family home prior to the dissolution of the marriage to which they were a party.

In the case of amendment No. 30, Part IV of the Criminal Evidence Act, 1992, deals with the competence and compellability of spouses and former spouses to give evidence in criminal proceedings. Under section 20 of the Act as it stands, the definition of former spouse includes a person who is in respect of his or her marriage to an accused, has been either granted a decree of judicial separation or has entered a separation agreement. The purpose of this amendment is to extend the definition of former spouse to include persons who have been divorced. The effect is that such persons would be subject to the rules of the 1992 Act regarding competence and compellability to give evidence in criminal proceedings.

Amendment No. 31 is to the Power of Attorneys Act, 1996, which will come into operation on 1 August next. Under section 5 (7) of the Act, an enduring power of attorney in favour of a spouse shall, unless the power provides otherwise, be invalidated or cease to be in force if subsequently the marriage inter alia is annulled under the law of the State, is annulled or dissolved under the law of another State or if either a decree of judicial separation is granted to either spouse in this State or by a court outside the State. The purpose of this amendment to section 5 (7) (a) is to introduce a similar provision in respect of persons who have been divorced.

Amendment No. 32 enables persons who have been granted a divorce to apply for a safety order or barring order against a former spouse under the Domestic Violence Act, 1996.

These amendments are mainly of a technical nature, filling in other related legislation and the other issues that have arisen since the Bill was passed. They are acceptable and agreed.

Amendment agreed to.

I move amendment No. 29:

In page 35, before section 39, to insert the following new section:

"40.—Section 1(3) of the Criminal Damage Act, 1991, is hereby amended

(a) in paragraph (a), by the insertion after ‘1976,' of the following:

‘or a dwelling, within the meaning of section 2(2) of the Family Home Protection Act, 1976, as amended by section 54(1)(a) of the Family Law Act, 1995, in which a person, who is a party to a marriage that has been dissolved under the Family Law (Divorce) Act, 1996, or under the law of a country or jurisdiction other than the State, being a divorce that is entitled to be recognised as valid in the State, ordinarily resided with his or her former spouse, before the dissolution',

and

(b) in paragraph (b), by the substitution of the following subparagraph for subparagraph (i):

‘(i) is the spouse of a person who resides, or is entitled to reside, in the home or is a party to a marriage that has been dissolved under the Family Law (Divorce) Act, 1996, or under the law of a country or jurisdiction other than the State, being a divorce that is entitled to be recognised as valid in the State, and'.".

Amendment agreed to.

I move amendment No. 30:

In page 35, before section 39, to insert the following new section:

"41.—Section 20 of the Criminal Evidence Act, 1992, is hereby amended in section 20—

(a) by the insertion of the following definition:

‘"decree of divorce" means a decree under section 4 of the Family Law (Divorce) Act, 1996 or any decree that was granted under the law of a country or jurisdiction other than the State and is recognised in the State;',

and

(b) by the substitution of the following definition for the definition of former spouse:

‘"former spouse" includes a person who, in respect of his or her marriage to an accused—

(a) has been granted a decree of judicial separation, or

(b) has entered into a separation agreement, or

(c) has been granted a decree of divorce;'.".

Amendment agreed to.

I move amendment No. 31:

In page 35, before section 39, to insert the followeing new section:

"42.—Section 5 (7) (a) of the Powers of Attorney Act, 1996, is hereby amended by the substitution of the following paragraph for paragraph (a):

‘(a) the marriage is annulled or dissolved either—

(i) under the law of the State, or

(ii) under the law of another state and is, by reason of that annulment or divorce, not or no longer a subsisting valid marriage under the law of the State,'.".

Amendment agreed to.

I move amendment No. 32:

In page 35, before section 39, to insert the following new section:

"43.—The references in sections 2 and 3 of the Act of 1996 to a spouse shall be construed as including references to a person who is a party to a marriage that has been dissolved under this Act or under the law of a country or jurisdiction other than the State, being a divorce that is entitled to be recognised as valid in the State.".

Amendment agreed to.

I move amendment No. 33:

In page 36, lines 5 to 23, to delete paragraphs (c) to (f) and substitute the following:

"(c) in sections 11 (2) (a), 12 (23) (b) and 25 (1), by the substitution of ‘proper provision, having regard to the circumstances,' for ‘adequate and reasonable financial provision', in each place where it occurs,

(d) in section 12, in subsection (18), by the substitution of ‘40' for ‘41',

(e) in section 15—

(i) in subsection (5), by the substitution of ‘10 (1) (a)' for ‘10 (1) (a) (ii)', and

(ii) by the insertion of the following subsection after subsection (5):

‘(6) This section shall not apply in relation to a family home in which, following the grant of a decree of judicial separation, either of the spouses concerned, having remarried, ordinarily resides with his or her spouse.',

(f) in section 16 (1), by the substitution of ‘proper' for ‘adequate and reasonable',

(g) in section 18, in subsection (1) (h), by the insertion of ‘in so far as such application is not restricted or excluded by section 12 (26)' after ‘section 12',

(h) in section 36, in subsection (8), after paragraph (c), by the insertion of the following paragraph:

‘(cc) either of the parties to a marriage that has been dissolved under the law of the State;',

(i) in section 43—

(i) in paragraph (a) (ii), by the substitution of ‘dependent child' for ‘dependent child of the family', and

(ii) by the substitution of the following paragraph for paragraph (e):

‘(e) in section 23, after subsection (2), the insertion of the following subsections:

"(3) In proceedings under this Act—

(a) each of the spouses concerned shall give to the other spouse and to, or to a person acting on behalf of, any dependent member of the family concerned, and

(b) any dependent member of the family concerned shall give to, or to a person acting on behalf of, any other such member and to each of the spouses concerned,

such particulars of his or her property and income as may reasonably be required for the purpose of the proceedings.

(4) Where a person fails or refuses to comply with subsection (3), the Court, on application to it in that behalf by a person having an interest in the matter, may direct the person to comply with that subsection.',

and

(j) in section 47, in subsection (7), by the substitution of ‘(1) (b)' for ‘(2)'.".

These are technical amendments, the purpose of which is to bring a number of provisions in the Family Law Act, 1995, into line with provisions in the Bill and to make some drafting changes to the provisions of the 1995 Act.

Amendment agreed to.

I move amendment No. 34:

In page 36, between lines 20 and 21, to insert the following:

"(f) in section 41, by the insertion after ‘to the satisfaction of the court' of ‘and without prejudice to the generality of the foregoing, the court may order the spouse or parent liable to make the payments under the order to secure them by establishing a direct debit',".

This amendment was discussed earlier when the Minister indicated he will look at provisions to improve the situation in relation to maintenance debtors and the possibility of considering penalties on lump sum payments. I will withdraw the amendment until Report Stage.

Amendment, by leave, withdrawn.
Section 39, as amended, agreed to.
Section 40 agreed to.
Title agreed to.

I thank the Minister for being with us for the last two days, the Members of the committee, particularly the spokespersons, Deputies Woods and O'Donnell. We have had an interesting debate on important legislation. It is not over yet as the Minister has given undertakings to discuss further matters between now and Report Stage to improve the legislation.

We have given this Bill good consideration. The Bill, as the Minister said at the outset, contained many of the provisions which were requested by us and other Members in advance of the referendum. Therefore, to a large extent, the Bill was already meeting the requirements as we saw them. We have given it further consideration and the Minister has agreed to look at some of the issues we raised. We thank him for that and look forward to Report Stage. I thank the secretariat and the Bills Office who have assisted us with the work on this Bill. We are under pressure, especially in the Opposition, in putting down all these amendments. The Minister has wonderful staff who can also be helpful to us.

Marie Kennedy is getting married tomorrow to Alan Murphy of the Bills Office. Both of them have been very helpful to us and I hope when they are married they will be equally helpful. I wish them the best on their marriage. We assure them there will be plenty of work when they come back in the autumn.

I thank the Minister, the Chairman, the Members of the committee who contributed and the staff. I know the Bill was published before the referendum. However, the issues raised by several Members of the committee in relation to championing the rights of children, independent of the spouses, must be revisited seriously even after the referendum result, given that there was such a narrow margin in favour of the divorce jurisdiction. Many of those reservations related to concerns about the welfare of children. We had a good debate on those aspects on Committee Stage. I note the Minister will consider some of the amendments relating to the guardian ad litem and other matters raised. I thank the Minister for his response on that.

I thank everyone for their co-operation. We had two fine days and it was good that so many people were prepared to give their time to deal with a difficult topic.

I thank the Chairman for conducting the affairs of the committee on this difficult and historic Bill in a fair and balanced way. I also thank the Members of the committee, particularly Deputy Woods, Deputy O'Donnell and Deputy Browne for their constructive contributions. It is an historic Bill for this country in many ways. I believe it will bring great relief to many people and it is extremely important. I thank the officials of the committee for their important work in connection with the Bill and the officials in my Department who worked long and hard at all stages of its preparation. Their task is not yet done, but it is well advanced. We will have the best possible reasonable and practical legislation to provide for divorce when we have completed our business in the Houses.

I pay tribute to Úna Nic Giolla Choille, the Clerk of our committee for the last few days. She took on this burden at short notice. I also pay tribute to Mr. Eamon Flanagan. Deputy Woods mentioned that Marie Kennedy is not here because of her marriage tomorrow. I join with Deputy Woods in conveying the best wishes of the committee to her. I had intended making a presentation on behalf of the committee to her but, perhaps, the conclusion of the Family Law Divorce Bill, 1996, is not the most opportune time to do so. We will do so when she returns from her honeymoon later in the summer.

Report of Select Committee.

I propose the following draft report.

The Select Committee has considered the Bill and has made amendments thereto. The Bill, as amended, is reported to the Dáil.

Is that agreed? Agreed.

Ordered to report to the Dáil accordingly.

On next Tuesday we will meet at 11.30 a.m. to deal with the Criminal Justice Bill. I hope we can conclude it that day because the Minister for Justice is not available on Wednesday and we must report the Bill to the Dáil on Thursday. I am concerned about this.

We have not seen the amendments yet.

We may have the amendments this evening. We will meet next Tuesday at 11.30 a.m.

The Select Committee adjourned at 1.25 p.m.

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