Tuesday, 7 May 2013

Written Answers Nos 147-155

Property Taxation Application

Questions (147)

Richard Boyd Barrett

Question:

147. Deputy Richard Boyd Barrett asked the Minister for Finance if he will explain the way a joint owner of a house who has no communication at all with the other owner of the house should complete the local property tax form, when they are not in a position to follow the instructions in the booklet that read, if you are not the sole owner of the property, you should agree with the other owner(s) who is to complete and submit the return and pay the tax due. [21389/13]

Written answers

Minister for Finance

Local Property Tax (LPT) is a self-assessed tax and it is a matter for property owners to calculate the amount of LPT due based on their assessment of the market value of their property. Joint owners of a property are jointly and severally liable for the tax on the property. I am informed that the Revenue Commissioners issued one LPT Return for each residential property to the person that the Commissioners designated as the liable person for the property and only one Return should be filed for a property. Joint owners will be required to decide who will file the LPT Return and pay the tax. On the matter of communication between joint owners, owners will have had to put arrangements in place to address issues such as insurance, payment of utility bills and all other matters associated with the property jointly owned. The Revenue Commissioners would expect LPT to be handled in a similar manner.

Once the LPT Return is filed and the tax paid, this will discharge the LPT liability for the property. However, where no Return has been filed and no payment has been made by the relevant deadline, Revenue can pursue collection of the LPT from either owner.

Departmental Staff Numbers

Questions (148)

Richard Boyd Barrett

Question:

148. Deputy Richard Boyd Barrett asked the Minister for Finance the number of persons that are employed at the local property tax help line; the grade of these people employed; the nature of their contracts and if he will give details of the customer charter that applies to them. [21390/13]

Written answers

Minister for Finance

I am advised by the Revenue Commissioners that the introduction of the Local Property Tax (LPT) represents a significant administrative challenge. It is the largest extension of the self-assessment system in the history of the State. As a new service that will have exceptional temporary pressures at particular stages of its initial implementation it is difficult to predict the level of contact that will arise during its introduction and, consequently, the resource required to handle queries from members of the public. Revenue considered a number of options for the provision of a phone call service to handle queries from members of the public. It was necessary to ensure that the introduction of LPT would not adversely affect Revenue’s capacity to deliver for the Exchequer in relation to their overall priority of maintaining and improving levels of compliance across the range of taxes and duties. Revenue decided to use a mix of existing staff, staff from the redeployment resource panel, Temporary Clerical Officers (TCOs) and external resources to deal with Local Property Tax.

At the end of April 2013, Revenue had a total of 80 full-time equivalent staff assigned to the Help Line, comprising 59 permanent staff and 21 TCOs. The permanent staff resource was filled through the internal redeployment of existing staff and the recruitment of some staff from the Public Service Resource panel. The permanent staff are made up of Assistant Principal, Higher Executive Officer, Executive Officer, Staff Officer and Clerical Officers grades.

Revenue is currently in the process of recruiting an additional 35 TCOs to support the LPT Helpline.

Following an open competitive tendering process, the contract for call services was awarded on the basis that the service provider would

1. Deliver information and assistance to taxpayers having difficulty understanding Local Property Tax (LPT) and completing their returns and making payments.

2. Assist taxpayers to navigate a new online system for filing returns and payments for LPT.

3. Escalate calls to a Revenue call service where taxpayer specific information is required to resolve the call.

4. Make outbound calls to taxpayers with information on their Property Tax queries where requested by Revenue to do so.

5. Provide telephony infrastructure and supports to allow direct transfer to Revenue.

6. Support services and resources including account management and quality control.

The contract also includes the following provisions:

- Private sector employers acting under a public service outsourcing contract will be required to comply with all statutory terms and conditions relating to the employment of people in Ireland, including any registered agreement or Employment Regulation Orders.

- As a matter of public policy, all public contracting authorities will make clear to tenderers their expectation that the statutory industrial relations procedures (LRC or Labour Court) will be utilised for dispute resolution, consistent with domestic and EU procurement law.

The service provider must meet Revenue customer service standards and the industry ISO standards. Revenue has provided training and training material to ensure that the standards are achieved. An Irish language service is provided. The necessary confidentiality and security procedures have been implemented.

Revenue’s customer service standards state that 100% of calls were answered within five minutes but also states that at peak periods it may take longer. Revenue is experiencing extremely high volumes of all calls in relation to the Local Property Tax at present. The Help-Line service is provided on a 9am to 5pm, Monday to Friday basis in the normal course. During peak filing periods the service is provided from 8am to 8pm and may include Saturday.

The service commenced on 7 March 2013 and call volumes of 199,834 were handled up to 30 April 2013. The external service delivery of peak call handling in respect of the LPT provides a flexible, scalable response to an unpredictable demand. Up until the end of April 2013 the number of staff provided by the service provider ranged from 40 up to 193.

NAMA Debtors

Questions (149)

Derek Nolan

Question:

149. Deputy Derek Nolan asked the Minister for Finance if the income of developers who are now being paid by National Assets Management Agency can be used towards reducing their insolvency debt; if the new personal solvency service will affect NAMA's dealing with debtors in any way; and if he will make a statement on the matter. [21412/13]

Written answers

Minister for Finance (Deputy Michael Noonan)

As has been previously advised to the House, NAMA seeks to ensure that income generated by assets securing its loans is applied towards repaying a debtor’s indebtedness to the Agency. In certain circumstances, debtors are allowed to retain a portion of asset income in lieu of overheads which include staff costs. NAMA also seeks to obtain charges over a debtor’s unencumbered assets and to realise such assets so as to further reduce indebtedness.

The position outlined above does not apply to debtors against whom enforcement action has been taken, as their assets and asset income are under the control of insolvency practitioners appointed by NAMA. I am advised by NAMA that, whilst the relevant procedures for the new insolvency arrangements have not been finalised, it does not envisage the new arrangements will have a major material effect on its interaction with its debtors. In so far as there may be an impact, debtors will be considered on a case-by-case basis after implementation of the new insolvency regime but NAMA will abide by the statutory bankruptcy mechanism in all such cases.

Question No. 150 answered with Question No. 132.

Tax Forms

Questions (151)

Michael McGrath

Question:

151. Deputy Michael McGrath asked the Minister for Finance the reason a Med 1 claim for 2012 was refused in respect of a person (details supplied) in County Cork; and if he will make a statement on the matter. [21418/13]

Written answers

Minister for Finance

I have been advised by the Revenue Commissioners that this taxpayer’s claim for medical expenses for the year 2012 has been processed and a balancing statement (P21), dated 6 February 2013, has been issued. The balancing statement includes full credit for the medical expenses claimed, but also includes other adjustments, the overall effect of which is a net refund of €58.72. If the taxpayer wishes to have the balancing statement explained to him in detail, he should contact Deirdre Kavanagh in Revenue, Cork, telephone [phone] extension 27253.

Question No. 152 answered with Question No. 132.

Banking Sector Remuneration

Questions (153)

Derek Nolan

Question:

153. Deputy Derek Nolan asked the Minister for Finance his plans to further address the issue of maximum salaries for bank executives; and if he will make a statement on the matter. [21445/13]

Written answers

Minister for Finance

The present policy on remuneration at the covered institutions dictates that no individual may receive annual aggregate remuneration (excluding pension contributions) exceeding €500,000 unless specifically authorised. Our policy on bank remuneration is being augmented following the Review of Remuneration Practices and Frameworks at the covered institutions, conducted by Mercer, that as the remaining institutions still incur losses their respective cost bases need 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 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.

Property Taxation Exemptions

Questions (154)

Patrick O'Donovan

Question:

154. Deputy Patrick O'Donovan asked the Minister for Finance if a first time buyer who signed for their property on 20 December 2012 is exempt from the local property tax; and if not if he will consider an exemption for those who purchased their home from the time of the budget announcement to the 1 January 2013; and if he will make a statement on the matter. [21517/13]

Written answers

Minister for Finance

Section 8 of the Finance (Local Property Tax) Act 2012 (as amended) provides for an exemption from the charge to LPT for a property purchased by a first time buyer between 1 January 2013 and 31 December 2013. The Deputy will be aware that tax relief on mortgage interest was available subject to certain conditions for first time buyers, in respect of loans taken out in the period 1 January 2004 to 31 December 2012. It was in that context that the 1 January 2013 date was selected for the LPT exemption, and I do not intend to extend it to properties purchased earlier than that. In relation to your specific question, on the understanding that the purchase of the property by the first time buyer was completed prior to 1 January 2013, the property will not qualify for the LPT exemption.

Mortgage Interest Rates Issues

Questions (155)

Billy Timmins

Question:

155. Deputy Billy Timmins asked the Minister for Finance the position regarding hikes of the interest rates imposed by banks which seem to have no connection with the actual price at which Irish banks are getting their money, mostly through the ECB; if he is planning any action in relation to the sustainable situation of those on variable mortgages who bought their family houses on the peak of the housing market; and if he will make a statement on the matter. [21519/13]

Written answers

Minister for Finance

I, as Minister for Finance, have no statutory role in relation to the mortgage interest rates charged by regulated financial institutions. It is a commercial matter for the banks concerned. Firstly I must point out that it is not true to say that the Irish banks are funded mostly through the ECB; in fact the Irish banks primarily funded by deposits and other types of market funding.

The Central Bank has responsibility for the regulation and supervision of financial institutions in terms of consumer protection and prudential requirements and for ensuring ongoing compliance with applicable statutory obligations. The Central Bank has, however, no statutory role in the setting of interest rates by financial institutions, apart from the interest rate cap imposed on the credit union sector in accordance with the provisions of the Credit Union Act, 1997.

The mortgage interest rates that financial institutions operating in Ireland charge to customers are determined as a result of a commercial decision by the institutions concerned. This interest rate is determined taking into account a broad range of factors, including European Central Bank base rates, deposit rates, market funding costs, the competitive environment and an institution’s overall funding.

However, as part of the Central Bank’s work on mortgage arrears, lenders were asked to consider all avenues to help customers in arrears, including interest rate reductions. Currently, several lenders do consider a temporary interest rate reduction but this is on a case by case basis.

I can assure the Deputy that the Government is very aware of the significant difficulties some homeowners are facing in meeting their mortgage obligations and it has put in place a comprehensive strategy to address the problem focusing on four main distinct areas:

- Innovative Personal Insolvency Reform: Personal insolvency reform was identified by the Keane Report as a catalyst for addressing the mortgage arrears problem and it indicated that without an effective insolvency system the mortgage arrears problem will not be resolved. The introduction of the new Personal Insolvency Act provides new statutory insolvency frameworks to allow debtors and creditors reach arrangements on unsustainable mortgage and personal debt. The legislation provides a legal framework for the resolution of mortgage arrears, as well as other personal debt, and it will provide certainty for borrowers and lenders alike about the consequences of non-payment and failure to reach agreement. It does not preclude, however, borrowers and lenders reaching bilateral agreements to address mortgage or other debt difficulty.

- Mortgage Arrears Resolution Strategies: As announced in March 2013, the implementation of the mortgage arrears strategies has further intensified with the Central Bank now setting time bound and measurable targets for the main banks on their progress in resolving, on a durable basis, the position of their mortgage customers who are in arrears on their mortgage. The “Keane Report” has already outlined a number of possible options that can be considered by banks to provide a sustainable solution for a mortgage in difficulty on a case by case basis.

- Comprehensive Advice and Guidance: In addition to existing arrangements, the Government has introduced a range of additional information and guidance resources to assist mortgage holders through what can be a difficult and stressful process. A dedicated website, www.keepingyourhome.ie , has been put in place to provide general public information on mortgages arrears issues. In addition, there is a Mortgage Arrears Information Helpline, which is established under the aegis of the Citizens Information Board, to provide more tailored information to individual callers. Finally, a panel of accountants has been put in place to provide “one to one” independent advice to borrowers who have been provided with a long term forbearance resolution offer by their lender in respect of a mortgage on their primary home. All of these information services are provided at no direct charge to the users of the service.

- Keeping families in their homes: As a social housing response, a “mortgage to rent” scheme is now in place on a nationwide basis. This option will be available to households with unsustainable mortgages and who would qualify for social housing support and meet other appropriate criteria and will allow the family, in the context of an agreed resolution to an unsustainable mortgage, to remain in their home.