Tuesday, 16 Apr 2013

Property Taxation Exemptions

Questions (210)

Finian McGrath

Question:

210. Deputy Finian McGrath asked the Minister for Finance if there are any property tax exemptions for families whose homes were damaged during the construction of the Dublin Port Tunnel. [17614/13]

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Written answers

Minister for Finance

Damage to homes during the construction of the Dublin Port Tunnel is not relevant in determining liability to Local Property Tax (LPT). Accordingly, whilst those whose homes were damaged during the works may be exempt from LPT for another reason, or may be entitled to avail of a deferral arrangement under the provisions contained in the legislation, there is no specific exemption in this instance. I have no plans to introduce such an exemption. The Government decided that a universal liability to the Local Property Tax (LPT) should apply to all owners of residential property with a limited number of exemptions. Limiting the exemptions available allows the rate to be kept low for those liable persons who do not qualify for an exemption.

Illicit Trade in Tobacco

Questions (211)

Thomas P. Broughan

Question:

211. Deputy Thomas P. Broughan asked the Minister for Finance the steps he is taking to address the ongoing problem of the illegal smuggling of cigarettes in view of the impact of this illicit trade on retailers in Fingal and across the country; and if he will make a statement on the matter. [17640/13]

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Written answers

Minister for Finance

I am informed by the Revenue Commissioners that combatting the illegal tobacco trade is, and will continue to be, a very high priority for them. The Commissioners’ “Strategy on Combating the Illicit Tobacco Trade (2011-2013)”, which is published on the Revenue website (www.revenue.ie), includes a wide range of measures designed to target those engaged in the supply and sale of illicit tobacco products and very significant resources are being devoted to this issue in 2013. This multi-faceted strategy includes:

- the ongoing analysis of the nature and extent of the problem

- developing and sharing intelligence on a national, EU and international basis

- the ongoing review of operational policies by a high-level group within Revenue that is chaired by one of the Commissioners

- the development of analytics and detection technologies and

- the optimum deployment of resources at both point of importation and within the country to intercept and seize contraband products and to prosecute those involved.

As regards Dublin, Revenue actively monitors the illegal tobacco trade and has identified certain areas as particular black spots for the sale of illicit tobacco products. Revenue is currently engaged in an ongoing range of measures targeting those involved. Officers routinely conduct high visibility patrols aimed at disrupting the sale and supply of tobacco products in areas in question. In November 2012, Revenue increased the number of patrols in the areas concerned. Revenue’s presence in these areas has also been bolstered by the deployment of both the tobacco dog unit and marked vehicles during certain targeted operations. In 2012, 5 cases were referred for prosecution in relation to illegal trading in tobacco products in the city centre. Revenue expects a number of further prosecutions for such cases to come before the courts in 2013.

Moreover, in tandem with ongoing high visibility patrols of the area, Revenue personnel are actively engaged in covert surveillance and test purchasing for the purpose of gathering intelligence with a view to identifying and prosecuting the suppliers of illicit tobacco products in the areas concerned. A recent example of such a successful intelligence-driven operation involved officers from Revenue’s Customs Service at Dublin Port seizing some 713,000 cigarettes, with an estimated retail value of €314,575 and a potential loss to the Exchequer of €253,257, from a lock up garage in the Dublin North City area.

In the particular context of the Dublin Fingal area, I am advised by the Commissioners that their officers will be conducting a number of operations in the coming months specifically targeted at market selling. Revenue has built close links with business interest groups representing retailers with a view to identifying specific locations (including locations within Fingal) where there has been an appreciable fall off in the sale of tobacco and cigarettes and then targeting operations to identify the illegal sale of tobacco and cigarettes in those areas.

At a national level, interception of illicit tobacco products is achieved through a combination of risk analysis, profiling, intelligence and the screening of cargo, vehicles, baggage and postal packages. Revenue officers also target the illicit trade at the post-importation level by carrying out intelligence-based operations and random checks at retail outlets, markets and private and commercial premises.

Revenue works in close cooperation with other relevant agencies, both nationally and internationally. There is extensive cooperation between Revenue and An Garda Síochána. The relevant agencies in the State and in Northern Ireland work closely together, through a cross-border group on tobacco enforcement, to combat the organized crime groups that are responsible for a large proportion of the illegal tobacco market. In addition, cooperation takes place with other Revenue administrations and with the European Anti-Fraud Office, OLAF, in the ongoing efforts to tackle the illicit trade in tobacco products at international level.

Considerable success has been achieved by Revenue in combatting the illegal trade. Details of the quantities of cigarettes seized each year since 2005 are set out in the following table.

Year	Quantity of Cigarettes sized (millions)
2005	51.3
2006	52.3
2007	74.5
2008	135.2
2009	218.5
2010	178.4
2011	109.1
2012	95.6

The quantity of cigarettes seized in a given year can be influenced significantly by the occurrence of a particularly large seizure or seizures. For example, the quantity of cigarettes seized in 2009 includes one exceptional seizure of some 120 million cigarettes that were uncovered on a vessel at Greenore, Co. Louth.

Moreover, the Revenue Commissioners have had considerable success in detecting and prosecuting persons involved in the illicit trade. For example, in 2012, there were 57 convictions for tobacco smuggling, resulting in 26 custodial sentences being handed down by the Courts (of which 7 were suspended) as well as fines totalling €93,550. In addition, there were a further 75 convictions connected with the sale or keeping for sale of unstamped tobacco products, resulting in 21 custodial sentences (14 of which were suspended) as well as fines of €153,050.

Revenue is committed to ensuring that the highest possible levels of seizures of illicit products are achieved on an ongoing basis, and that those responsible for the smuggling, supply or selling of illicit products are prosecuted, and will ensure that this work continues to have the high priority that has been accorded to it to date.

Property Taxation Exemptions

Questions (212)

Michael Healy-Rae

Question:

212. Deputy Michael Healy-Rae asked the Minister for Finance if a house which has been unlived in for five years or more is exempt from the property tax; and if he will make a statement on the matter. [17677/13]

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Written answers

Minister for Finance

The Finance (Local Property Tax) Act 2012 (as amended) sets out when the charge to Local Property Tax (LPT) applies. A liability for LPT will arise where a person owns a residential property which is in use, or is suitable for use as a dwelling, on the liability date which is 1 May 2013 for the year 2013.

I am informed by the Revenue Commissioners that the charge to LPT arises whether the residential property in question is occupied or unoccupied.

Question No. 213 answered with Question No. 198.

Disabled Drivers Grant Applications

Questions (214)

Dan Neville

Question:

214. Deputy Dan Neville asked the Minister for Finance the position regarding an application for review of primary medical certificate application in respect of a person (details supplied) in County Limerick. [17712/13]

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Written answers

Minister for Finance

The disability criteria for eligibility for tax concessions under the Disabled Drivers and Disabled Passengers (Tax Concessions) Scheme are set out in the Disabled Drivers and Disabled Passengers (Tax Concessions) Regulations 1994. To get the Primary Medical Certificate, an applicant must be severely and permanently disabled and satisfy one of the following conditions:

a) be wholly or almost wholly without the use of both legs;

b) be wholly without the use of one leg and almost wholly without the use of the other leg such that the applicant is severely restricted as to movement of the lower limbs;

c) be without both hands or without both arms;

d) be without one or both legs;

e) be wholly or almost wholly without the use of both hands or arms and wholly or almost wholly without the use of one leg;

f) have the medical condition of dwarfism and have serious difficulties of movement of the lower limbs.

The initial application for a Primary Medical Certificate under the Disabled Drivers and Disabled Passengers (Tax Concessions) Regulations 1994, is made to the Senior Medical Officer of the relevant local Health Service Executive administrative area.

If the Primary Medical Certificate is refused, the person may appeal the refusal to the Disabled Drivers Medical Board of Appeal, National Rehabilitation Hospital, Rochestown Avenue, Dún Laoghaire, Co. Dublin.

I understand the person appealed the decision of the Senior Medical Officer not to grant a Primary Medical Certificate and the appeal was subsequently refused by the Medical Board of Appeal. If the person wishes to apply again for a Primary Medical Certificate, the application to the Senior Medical Officer must be accompanied by a medical certificate from a registered medical practitioner indicating that the practitioner has formed the opinion that the medical condition of the person concerned has materially deteriorated since the previous application.

I would point out that the Medical Board of Appeal is independent in the exercise of its functions.

Credit Unions Liabilities

Questions (215)

Dara Calleary

Question:

215. Deputy Dara Calleary asked the Minister for Finance the supports available to credit unions that invested in good faith in Anglo Irish Bank, latterly Irish Bank Resolution Corporation and who now owing to the liquidation process invoked, have lost the money invested; if he intends to intervene on their behalf; and if he will make a statement on the matter. [15976/13]

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Written answers

Minister for Finance

These investments by credit unions referred to in the question had a structured deposit element which is covered by the Deposit Guarantee Scheme (DGS) for the first €100,000. However, at the time credit unions purchased this product there was no additional guarantee by the State and as such they are ranked as unsecured creditors in the IBRC liquidation process. Credit unions, as part of their regulatory requirements, are required to maintain realised reserves for the purpose of absorbing unexpected losses, including from unguaranteed losses. This should be the first line of defence in such circumstances. Officials from my Department have met with credit union representatives on this matter and the credit unions affected have been advised to deal with the Special Liquidator.

Property Taxation Collection

Questions (216)

Sandra McLellan

Question:

216. Deputy Sandra McLellan asked the Minister for Finance if he will confirm that the Sheriff's Office can effect entry into a persons home to collect the value of unpaid local property tax even if the person is not at home; and if he will make a statement on the matter. [16045/13]

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Written answers

Minister for Finance

The Finance (Local Property Tax) Act 2012 has introduced provisions making owners of residential property liable for payment of Local Property Tax (LPT). The Government has assigned responsibility to the Revenue Commissioners for all aspects of the administration of LPT including where necessary collection enforcement against individuals who choose not to pay. It is important to note that LPT has been designed as a tax that is easy to pay but difficult to avoid and a range of payment options has been made available for liable owners. Also, certain properties are exempt from LPT and a system of deferral arrangements is available where there is inability to pay and certain specified conditions are met. All of these details are set out in Revenue’s information booklet ‘Your Guide to Local Property Tax’.

Where there is non-engagement by liable owners, Revenue will take the necessary measures to ensure compliance with the law. Revenue has a range of options available in this regard and will, in line with standard collection enforcement procedure take the appropriate measures that are considered necessary to pursue full compliance as effectively as possible. In this regard, Revenue will deduct LPT at source from non-compliers where possible. This will prevent arrears building up.

Referral of unpaid LPT liabilities to the Sheriff is one such option that is available to Revenue. Such referrals will only be made where the liable person has not paid the tax by the due date and has not positively engaged with Revenue in regard to the outstanding debt. The execution of certificates issued by Revenue to Sheriffs in respect of unpaid tax debts (including LPT) is governed by the general law, which applies to the collection of civil debt of all kinds. Sheriffs operate independently of Revenue and are Officers of the Court, who hold office under section 12 of the Court Officers Act, 1945. A Sheriff’s debt collection activities, including seizure procedures, are governed by the Enforcement of Court Orders Act, 1926 as amended, which allows that where necessary the Sheriff may enter any dwelling house or other building for the purpose of seizing goods, that are not exempt under the Act, in execution of a warrant. However, it should be noted that the Sheriff will only commence seizure proceedings as a last resort where there is no positive engagement by the liable person. In circumstances where there is positive engagement by the liable person the Sheriff will work to agree an alternative arrangement.

Mortgage Resolution Processes

Questions (217, 308)

Michael McGrath

Question:

217. Deputy Michael McGrath asked the Minister for Finance if he will provide details of the rules that apply to the split mortgage arrangements, including details of the maximum percentage of the mortgage that can be parked; the eligibility criteria; and if he will make a statement on the matter. [16071/13]

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Michael McCarthy

Question:

308. Deputy Michael McCarthy asked the Minister for Finance if he will outline in detail the requirements on banks to facilitate distressed mortgage holders who need to renegotiate their current repayment arrangements with their lenders; if he will provide greater detail on the warehousing option; if he will confirm if it is his policy to allow banks to charge interest on the warehoused portion; and if he will make a statement on the matter. [17005/13]

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Written answers

Minister for Finance

I propose to take Questions Nos. 217 and 308 together.

On 13 March 2013 the Central Bank announced new measures to address mortgage arrears, including the publication of performance targets for the main mortgage banks.

Performance targets have been set for:

- ACC;

- AIB;

- Bank of Ireland;

- KBC Bank Ireland;

- Permanent TSB; and

- Ulster Bank.

The specific targets which have been set by the Central Bank, require banks to systematically work through their mortgage book to offer durable solutions to mortgage holders covering arrears cases that are 90 days or more overdue.

The Central Bank’s targets stipulate that:

- By end June 2013, the banks should have proposed sustainable mortgage solutions for 20% of mortgage loans that are over 90 days in arrears, and

- By end September 2013, 30%, and

- By the end of 2013, 50%.

The Central Bank will also, over the coming period, set targets for the conclusion of durable solutions and for the sustainability of such solutions. The targets should provide a better measure of progress on a more consistent basis and promote a movement away from ‘temporary’ forbearance measures which are not sustainable in the long term. In addition the banks will also be set specific, non-public, targets, principally in relation to handling of early arrears cases. The Central Bank is working with individual institutions to incorporate these measures which will be set in line with each institution’s capacity, processes and systems. These targets will be adjusted quarterly to ensure they are ambitious.

The banks will be required to publish their performance against the targets and make quarterly reports to the Central Bank. The Central Bank will consider each bank’s performance against the targets, including assessing whether the modifications provided are in fact sustainable solutions.

The split mortgage is one of a number of arrangements suggested by the Inter-Departmental Mortgage Arrears Working Group Report (the Keane Report). The Central Bank of Ireland has informed me that the majority of lenders have introduced, or are in the process of introducing, a split mortgage arrangement. The concept involves splitting a distressed mortgage into an affordable mortgage and warehousing the balance. While lenders have taken the broad approach set out in the Keane report, the product details vary from lender to lender. The most notable difference involves the interest rate charged on the warehoused element of the split mortgage varying from 0% up to the full mortgage interest rate. Also, the maximum amount that can be warehoused is dependent on each lender’s own internal criteria. The split mortgage, like all other forbearance and modification arrangements, is based on affordability and sustainability of the arrangement from both the borrower and the lender’s perspective.

Property Taxation Collection

Questions (218)

Mattie McGrath

Question:

218. Deputy Mattie McGrath asked the Minister for Finance his views with the level of information on the property tax form relating to payment options; his views on the fact that while the information surrounding option five cash payments is clear, there is no option to make payment in full by cash; the reason there is no reference made to An Post as a payment service provider; his views on whether this information is clear for the elderly or those without Internet access who are most likely to use An Post to make their payments and who are referred to the Revenue website to find information on the service providers; and if he will make a statement on the matter. [16120/13]

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Written answers

Minister for Finance

I am informed by the Revenue Commissioners that a wide range of payment options have been made available to liable persons, which will allow them to pay their Local Property Tax (LPT) liability for 2013 in full or by way of phased payments between July and December 2013. This range of options available means that property owners can choose a method of payment that suits their particular circumstances. For those wishing to pay in cash, they can pay weekly, monthly or they can pay the charge in a single payment, using one of three approved payment service providers, who are An Post TaxPay, Payzone and Omnivend.

I am further informed that the LPT booklet that issued to all property owners along with the recent general issue of LPT Returns includes detailed guidance on each payment option and sets out what steps the property owner must take when making payments. I understand that the LPT booklet explains at page 7 that cash payments can be made in full.

The Revenue Commissioners also advise that although the paper LPT Return form only provides the option to pay LPT by cash in weekly or monthly instalments, liable persons wishing to pay their LPT liability in cash, should choose either the weekly or monthly option on the LPT Return, even where they intend to make one lump sum payment in cash. This way the Revenue Commissioners, when processing the LPT Return, will be made aware of the owner’s payment preference. I am further advised that where a liable person wishes to pay their LPT in full using cash, all payment service providers have been informed to accept the lump sum payment and I understand that some property owners have already paid in full using cash via An Post. Although the option to pay in full by cash is not included on the LPT Return, I am satisfied that this should not impede a property owner who wishes to pay their LPT charge this way and liable persons are already doing so.

I am further advised by the Commissioners that it was not possible to include the names of the three payment service providers on the LPT Return or in the booklet, as negotiations with these service providers were still ongoing when these documents were being produced. When the negotiations were successfully completed, Revenue published the names of the three payment service providers on the Revenue website. In addition, Revenue has also been working closely with the Citizens Information Service to optimise the opportunities for property owners, particularly the elderly and those without internet access, to obtain advice on LPT (including the names of the payment service providers) and assistance in completing their LPT Return. In addition, Revenue had a number of meetings, in advance of the general issue of Returns, with organisations representing Older Persons, where the question of whether An Post would accept LPT payments was discussed and clarified. Furthermore, Revenue has sought to use all opportunities in interviews with various sections of the media to advise property owners of where they could pay their LPT in cash.

Finally, I am satisfied that the Revenue Commissioners have put a significant amount of information into the public domain on payment options and both the LPT Return and booklet covers this in some detail. It is also open to any property owner who has a query on any aspect of the various payment options to call Revenue’s dedicated LPT Helpline on 1890 200255.

Banks Recapitalisation

Questions (219, 220, 221, 250)

Pearse Doherty

Question:

219. Deputy Pearse Doherty asked the Minister for Finance if he will provide an assessment of the overall cost to the State of the bailout of Permanent TSB if senior bondholders had been wiped out in March 2011. [16124/13]

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Pearse Doherty

Question:

220. Deputy Pearse Doherty asked the Minister for Finance if he will provide an assessment of the overall cost to the State of the bailout of Anglo Irish Bank and Irish Nationwide Building Society if senior bondholders had been wiped out in March 2011. [16122/13]

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Pearse Doherty

Question:

221. Deputy Pearse Doherty asked the Minister for Finance if he will provide an assessment of the overall cost to the State of the bailout of Allied Irish Banks and the Educational Building Society if senior bondholders had been wiped out in March 2011. [16123/13]

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Pearse Doherty

Question:

250. Deputy Pearse Doherty asked the Minister for Finance further to Parliamentary Questions Nos. 179, 180, 188 and 227 of 26 March 2013, to which he, in part, responded that the Eurogroup advised against this proposal, but it recognised that fiscal measures such as taxes and levies are matters for individual member states, whether in a programme of assistance or not, if he will provide an assessment of the benefit that would have flowed to the State if a 99% tax or levy had been imposed on senior unguaranteed bondholders in Anglo Irish Bank and Irish Nationwide Building Society from March 2011. [16361/13]

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Written answers

Minister for Finance

I propose to take Questions Nos. 219 to 221, inclusive, and 250 together.

The Deputy will be aware that when this Government took office it attempted to enforce burden sharing with senior unguaranteed bondholders in particular institutions that were no longer core elements of the Irish financial system. Intensive discussions were held with our European partners and particularly President Trichet of the ECB in the run-up to the announcement of our stress tests on 31st March 2011. At that time the President believed that such action was not in the interests of Ireland or the Euro Area. This matter was discussed again with President Trichet on a number of occasions including the Ecofin meeting in Poland in September 2011.

The Central Bank of Ireland has advised me that as of 18th February 2011, the total unguaranteed senior debt issued by the covered institutions was €36,452m of which €20,039m was unguaranteed senior secured and €16,413m was unguaranteed senior unsecured (This information was published to the Central Bank of Ireland website in April 2011).

Within these figures, the amount outstanding at Anglo Irish Bank and Irish Nationwide combined was €3,748m (unguaranteed senior unsecured), while there was no senior unguaranteed secured notes in issue. As the Deputy is aware, burden sharing was thus restricted to junior debt, which over the course of the crisis contributed over €15bn in capital to the Covered Institutions.

Property Taxation Exemptions

Questions (222)

Éamon Ó Cuív

Question:

222. Deputy Éamon Ó Cuív asked the Minister for Finance if property tax is due on houses that are being constructed or have been constructed on a person's own land, and have not yet been occupied; and if he will make a statement on the matter. [16144/13]

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Written answers

Minister for Finance

The Finance (Local Property Tax) Act 2012 (as amended) sets out how the tax is to be administered. In the first instance, a liability for Local Property Tax (LPT) will arise where a person owns a residential property which is in use, or is suitable for use as a dwelling, on the liability date which will be 1 May 2013 for the year 2013. Where construction of a house is not completed until after 1 May 2013, the residential property will not be liable for LPT until 2017. However, where a house was constructed before 1 May 2013, it will be subject to LPT whether or not it is occupied. Under the 2012 Act, such a property may qualify for an exemption from LPT where the house has been constructed for a first time buyer during 2013 and they occupy the house as their sole or main residence. The exemption will apply until the end of 2016.

I am advised by the Revenue Commissioners that as LPT is a self-assessed tax, if a residential property is not suitable for use as a dwelling, the liable person is obliged to notify the Revenue Commissioners as soon as possible after they receive their LPT Return, outlining why they consider a charge to LPT does not arise on the property and they must include relevant supporting documentation.

I am further advised by Revenue that, by virtue of the principles of self-assessment, the onus is on the owners of newly constructed residential properties, that are in use as a dwelling, or suitable for use as a dwelling, on 1 May 2013, to file an LPT Return by 7 May 2013 if they are filing on paper or, by 28 May 2013, if filing electronically, even if they have not been issued with an LPT Return form by the Revenue Commissioners. This may arise where the property, because it is recently constructed, is not recorded on Revenue’s LPT Register at the time of the general issue of LPT Returns. In these circumstances, the property owner should contact Revenue’s LPT Helpline at 1890 200255 for assistance or access the online system on Revenue’s website to file their LPT Return. I have been advised by the Commissioners that even where a property owner has not received a Property ID and PIN code from Revenue, they will still be able to file their Return online.

Tax Code

Questions (223)

Eoghan Murphy

Question:

223. Deputy Eoghan Murphy asked the Minister for Finance if he is considering extending the reduced VAT rate for certain goods and services beyond 31 December 2013. [16145/13]

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Written answers

Minister for Finance

Any proposals to maintain the 9% rate into 2014 will be considered in the context of budget 2014.

Banking Sector Remuneration

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Robert Troy

Question:

310. Deputy Robert Troy asked the Minister for Finance in view of the Mercer Report into pay at Irish banks, if he will outline the proposed timeframe for the implementation of the report’s recommendations; and if he will make a statement on the matter. [17031/13]

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Written answers

Minister for Finance

I propose to take Questions Nos. 224, 248, 265, 270, 309 and 310 together.

When publishing the Review of Remuneration Practices and Frameworks at the Covered Institutions, on 12 March 2013, I indicated that the Government had formed the view that with the remaining covered institutions still incurring losses it was an inescapable conclusion that the cost base of the institutions needs to be reduced further. This is essential if they are to return to profitability, be in a position to support the economy and repay the State’s investment through a return to private ownership.

On behalf of the Government, I have now directed the banks to come up with plans as to how they intend to address this issue in a manner that can help meet the State’s objectives. I expect the value of those plans to mean a saving of 6% - 10% of total remuneration costs, through reductions in payroll and pension benefits, new working arrangements and structures that deliver efficiency gains. Tackling the cost base is of course only one of many goals that need to be achieved but combined with other measures will deliver the required results.

I, and the Government, acknowledge that the sacrifices and changes made by bank employees to date at all levels and recognise that this has been achieved without major industrial unrest in what is a critically important sector. However, it can never be forgotten by management and employees of these banks – both past and present – that without enormous cost to Irish taxpayers these institutions would not have survived and that this needs to be borne in mind during future discussions. If remuneration costs are to be reduced with the aim of a return to profitability then sacrifices at all employees levels will be required.

Tax Code

Questions (225)

Olivia Mitchell

Question:

225. Deputy Olivia Mitchell asked the Minister for Finance if he will clarify the impact the tax change on maternity benefit will have on the maternity benefit of women who receive no top-up from the employer and are dependent solely on statutory maternity benefit. [16167/13]

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Written answers

Minister for Finance

As a result of maternity benefit payments becoming liable to income tax for all claimants, from 1 July 2013, a number of possible tax outcomes could arise:

1. An individual may pay no income tax on their maternity benefit payment as their tax credits will be sufficient to reduce their tax liability to zero.

2. An individual may pay income tax on some or all of their maternity benefit payment solely at the standard rate.

3. An individual may pay income tax at the standard rate on a portion of the maternity benefit and the higher rate on the balance of the maternity benefit payment.

4. An individual may pay income tax on their maternity benefit payment at the higher rate.

The extent, if any, to which taxation actually arises in a given case depends on the level of income that a recipient has in a tax year. If there is no other income besides the social welfare payment, the basic personal credits in force can be expected, in most cases, to ensure that no tax arises on the social welfare income itself, provided the credits have not been transferred to a husband or civil partner.

Accordingly, the tax liability on maternity benefit payments will ultimately depend on the total income of the individual or couple concerned in the tax year or years concerned.

I would point out though, that maternity benefit payments will remain exempt from Universal Social Charge and PRSI.

State Banking Sector

Questions (226)

Kevin Humphreys

Question:

226. Deputy Kevin Humphreys asked the Minister for Finance if he will outline if any discussions have taken place with Bank of Ireland or other private investors in the last six months on the sale or repurchase of the €1.8 billion of State-owned preference shares in Bank of Ireland; and if he will make a statement on the matter. [16196/13]

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Written answers

Minister for Finance

At its recent results briefing, Bank of Ireland indicated that it was considering a range of options relating to its preference shares issuance. I can confirm to the Deputy that officials in the Department of Finance, as part of their regular interaction with Bank of Ireland management, have discussed options regarding the State’s current holding of €1.8bn of preference shares. Should an opportunity arise to sell the shares or have them redeemed, the transaction will be considered having assessed the best interests of the State. I can also confirm to the Deputy that no discussions have been held between private investors and the Department of Finance in relation to the sale of the €1.8bn of State owned preference shares in the Bank of Ireland.

State Banking Sector

Questions (227, 228)

Kevin Humphreys

Question:

227. Deputy Kevin Humphreys asked the Minister for Finance the dividend the State is due to receive on it's €1.8 billion of preference shares in Bank of Ireland in 2013; the way the preference shares are structured; if the coupon will increase in the future; and if he will make a statement on the matter. [16197/13]

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Kevin Humphreys

Question:

228. Deputy Kevin Humphreys asked the Minister for Finance the dividend the State is due to receive on it's €3.5 billion of preference shares in AIB in 2013; the way the preference shares are structured; if the coupon will increase in the future; and if he will make a statement on the matter. [16198/13]

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Written answers

Minister for Finance

I propose to take Questions Nos. 227 and 228 together.

Bank of Ireland

As at 31 December 2012, there were 1.8bn units of Preference Stock in issue. The shares pay a fixed coupon of 10.25%. On 20 February 2013, the State received a cash dividend of €188m on the Preference Stock.

The structure of the Stock includes a provision for a step-up on the principal of 25% if they are not redeemed by March 2014. This would result in an additional liability for the bank of €450m, but payable to the State only on redemption. The step-up applies only to the principal amount and not to the coupon payable.

Allied Irish Bank

As at 31 December 2012, there were 3.5bn units of Preference Stock in issue. The shares pay a fixed coupon of 8%. The State expects a dividend of €280m to be paid on May 13th, 2013. From 2010 to 2012 this dividend has been in the form of bonus shares.

The structure of the Stock includes a provision for a step-up on the principal of 25% if they are not redeemed by May 2014. This would result in an additional liability for the bank of €875m but payable to the State only on redemption. The step-up applies only to the principal amount and not to the coupon payable.

State Banking Sector

Questions (229)

Kevin Humphreys

Question:

229. Deputy Kevin Humphreys asked the Minister for Finance if any attempts have been made in the last six months to sell the contingent capital instruments in AIB worth €1.6 billion and Permanent TSB worth €0.4 billion; the reaction from private investors to this; and if he will make a statement on the matter. [16199/13]

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Written answers

Minister for Finance

As the Deputy will be aware from previous statements I have made the State will seek to exit its various holdings (including the contingent capital instruments in AIB and Permanent TSB) at the appropriate time and when market conditions permit. On the back of the successful sale of the Bank of Ireland contingent capital instruments a number of investment banks and market intermediaries have, over the past few months, flagged potential market appetite for the remaining State contingent capital investments. My officials assess the merits of all market feedback received and consider the implications of that feedback for the objective of achieving the most favourable outcome for the taxpayer from all of the bank investments held by the State.

Tax Collection

Questions (230)

Timmy Dooley

Question:

230. Deputy Timmy Dooley asked the Minister for Finance if he has given any consideration to allowing consumers in debt to Revenue to transfer funds in PRSA accounts as a means of discharging their liability; and if he will make a statement on the matter. [16201/13]

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Written answers

Minister for Finance

The Deputy’s question represents a variation on requests for a general extension of pre-retirement access to pension savings beyond the provision currently included in Finance Act 2013 which relates solely to Additional Voluntary Contributions (AVCs). In my Budget 2013 speech, I announced that I would make provision in Finance Bill 2013 for persons making AVCs used to supplement their main scheme retirement benefits to withdraw up to 30% of the value of those contributions. Any amounts withdrawn will be subject to tax at the individual’s marginal rate. The option is available for 3 years from the enactment of Finance Act 2013 (i.e. 27 March 2013).

As I have made clear already in response to previous Parliamentary Questions, this is a restricted measure designed to enable rather than incentivise certain individuals to access part of their pension savings beyond their regular or compulsory pension contributions. I do not wish to damage future pension provision and it is important that individuals continue to provide for their retirement. For these reasons, I have no plans to extend the measure beyond AVCs, irrespective of the use to which such funds would be put.