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Thursday, 18 Jul 2013

Written Answers Nos. 195-209

Tax Yield

Questions (195)

Patrick Nulty

Question:

195. Deputy Patrick Nulty asked the Minister for Finance the amount of money that would be raised in a full year by confining tax relief to the standard rate of 20% in respect of pension contributions to occupational pension schemes, retirement annuity contracts and personal retirement savings accounts and confining tax relief for the public service pension related deduction to the standard rate of 20%; and if he will make a statement on the matter. [36745/13]

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Written answers

I assume the Deputy is referring to individual pension contributions, the tax relief on which is allowed at the taxpayer’s marginal tax rate — the standard or higher rate of income tax as appropriate in each case. A breakdown of the cost of tax relief on employee contributions to occupational pension schemes is not available by income tax rate, as tax returns by employers to the Revenue Commissioners of employee contributions to such schemes are aggregated at employer level. An historical breakdown is available by tax rate of the tax relief claimed on contributions to personal pension plans — retirement annuity contracts and personal retirement savings accounts — by the self-employed and others, to the extent that the contributions have been included in the personal tax returns of those taxpayers.

There is, therefore, no statistical basis for providing definitive figures. However, by making certain assumptions about the available information, it is estimated that the full-year yield to the Exchequer from confining tax relief to the standard rate of 20% in respect of pension contributions to occupational pension schemes, retirement annuity contracts and personal retirement savings accounts and confining tax relief for the Public Service pension related deduction to the standard rate of 20% would be approximately €560 million. This estimate includes €90 million in respect of the Public Service pension related deduction. This estimate does not allow for possible behavioural changes that could arise from changes in the rates of relief.

Tax Yield

Questions (196, 197)

Patrick Nulty

Question:

196. Deputy Patrick Nulty asked the Minister for Finance the amount of money that would be raised in a full year by reducing tax relief to 30% in respect of pension contributions to occupational pension schemes, retirement annuity contracts and personal retirement savings accounts; and if he will make a statement on the matter. [36746/13]

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Patrick Nulty

Question:

197. Deputy Patrick Nulty asked the Minister for Finance the amount of money that would be raised in a full year by reducing tax relief to 33% in respect of pension contributions to occupational pension schemes, retirement annuity contracts and personal retirement savings accounts; and if he will make a statement on the matter. [36747/13]

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Written answers

I propose to take Questions Nos. 196 and 197 together.

I assume the Deputy is referring to individual pension contributions, the tax relief on which is allowed at the taxpayer’s marginal tax rate — the standard or higher rate of income tax as appropriate in each case. A breakdown of the cost of tax relief on employee contributions to occupational pension schemes is not available by income tax rate, as tax returns by employers to the Revenue Commissioners of employee contributions to such schemes are aggregated at employer level. An historical breakdown is available by tax rate of the tax relief claimed on contributions to personal pension plans — retirement annuity contracts and personal retirement savings accounts — by the self-employed and others, to the extent that the contributions have been included in the personal tax returns of those taxpayers.

There is, therefore, no statistical basis for providing definitive figures. However, by making certain assumptions about the available information, it is estimated that the full-year yield to the Exchequer from confining tax relief to a rate of 30% in respect of individual contributions to occupational pension schemes, retirement annuity contracts and personal retirement savings accounts would be approximately €245 million.

The estimated full-year yield to the Exchequer from confining tax relief to a rate of 33% for individuals who can obtain relief at the 41% rate in respect of individual contributions to occupational pension schemes, retirement annuity contracts and personal retirement savings accounts would be approximately €180 million.

It is assumed that tax relief at the flat rates of 30% or 33% would not be available to claimants who are currently confined to tax relief at the standard rate of 20%.

These estimates do not allow for possible behavioural changes that could arise from changes in the rates of relief.

Tax Reliefs Availability

Questions (198, 199)

Patrick Nulty

Question:

198. Deputy Patrick Nulty asked the Minister for Finance if he will detail, in tabular form, every tax relief available to Irish persons; the tax revenue lost to the Exchequer from each tax relief in each of the past three years; if this data is not available for 2010, 2011 and 2012, inclusive, when he expects it to become available; and if he will make a statement on the matter. [36752/13]

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Patrick Nulty

Question:

199. Deputy Patrick Nulty asked the Minister for Finance if he will set out in tabular form the average revenue per person lost to the Exchequer from tax relief obtained by persons within each of the groups (details supplied); and if he will make a statement on the matter. [36753/13]

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Written answers

I propose to take Questions Nos. 198 and 199 together.

I am advised by the Revenue Commissioners that the total identifiable costs to the Exchequer which are currently available relate to income tax and corporation tax allowances, reliefs, exemptions and tax credits. These are shown in Table IT6 on the Revenue Statistical Report for 2011 which is accessible on the Revenue website at www.revenue.ie. The information is located under the main chapter heading of Income Tax and shows the information for the years 2009 and 2010 which are the most recent years for which the necessary detailed historical information is available.

A breakdown of these estimates of costs as specifically requested by the Deputy is not available and could not be provided without undertaking an extensive and costly development of the Revenue tax model.

Question No. 200 answered with Question No. 106.

Tax Collection

Questions (201)

Joanna Tuffy

Question:

201. Deputy Joanna Tuffy asked the Minister for Finance if he will provide an update on taxes and PRSI payable by those in receipt of rent for dwellings, including reliefs, and any changes arising out of budget 2013; and if he will make a statement on the matter. [36755/13]

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Written answers

Individuals who receive rent for properties are liable to Income Tax and USC on the income. In the previous Budget I announced that the Minister for Social Protection, Ms. Joan Burton, T.D., would be bringing forward legislation to change PRSI contributions as follows:

- Where modified PRSI rate payers have income from a trade or profession, such income and any unearned income they have will be made subject to PRSI with effect from the 1st of January 2013.

- Unearned income for everyone else will become subject to PRSI in 2014. This means that PRSI will be payable on income generated from sources such as rent, investments, dividends and interest on deposits and savings.

This means that from this year, modified rate contributors who have income from a profession or trade and who were previously not liable to PRSI on that income, are now liable to PRSI at 4% on such income. From next year, all assessed taxpayers, that is, taxpayers who are in the self-assessment system, will be liable to PRSI on their full incomes including rental income, investment income, dividends and interest on deposits and savings.

I should point out that PRSI is a matter for the Department of Social Protection in the first instance. However, it is my understanding that; in general, social insurance applies to persons over the age of 16 years and under pensionable age, which is currently age 66 years.

Those aged 66 years and over are not liable to pay PRSI on any of their income including their unearned income. Accordingly those over 66 years will not be impacted by the proposal to apply PRSI to unearned income such as interest on savings, shares and rents.

It should be noted that the Revenue Commissioners have published a guide to the income tax treatment of rental income. It sets out the amount of rental income to be taken into account for income tax purposes and provides a comprehensive list of expenditure items that are allowable for deduction in computing the rental income for income tax purposes, which can be obtained at the following link: http://www.revenue.ie/en/tax/it/leaflets/it70.html.

Universal Social Charge Application

Questions (202)

Arthur Spring

Question:

202. Deputy Arthur Spring asked the Minister for Finance the exact definition of the word "universal" his Department has applied to the universal social charge. [36778/13]

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Written answers

The position is that the Universal Social Charge (USC) was introduced in Budget 2011 to replace the Income Levy and Health Levy. It was a necessary measure to widen the tax base, remove poverty traps and raise revenue to reduce the budget deficit.

There are certain exemptions and reliefs from the USC. For example, persons in receipt of a payment from the Department of Social Protection such as the contributory and non-contributory state pension are exempt from the charge. There are also concessions for medical card holders and persons aged 70 or over who are not liable to the top rate of charge if their income does not exceed €60,000 per annum. In addition, payments from the Department of Social Protection will not be taken into account in determining if an individual has exceeded the €60,000 threshold.

As the Deputy will be aware, delivering on a commitment in the Programme for Government, the USC was reviewed by the Department of Finance in the lead up to Budget 2012. The report is available at www.finance.gov.ie. As a result of the review of the USC, the Government decided in Budget 2012 to increase the entry point to the Universal Social Charge from €4,004 to €10,036 per annum. It is estimated that this removed almost 330,000 individuals from the charge.

Finally, I would point the Deputy to the Revenue Commissioners published document entitled “Universal Social Charge FAQs” which gives a comprehensive list of the incomes streams which are exempt from the USC and is available at http://www.revenue.ie/en/tax/usc/universal-social-charge-faqs.pdf.

Universal Social Charge Application

Questions (203)

Arthur Spring

Question:

203. Deputy Arthur Spring asked the Minister for Finance the reason his Department differentiates those with an income of more than €100,000 into two categories for universal social charge, at different rates; and if he will make a statement on the matter. [36779/13]

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Written answers

The USC was introduced from 1 January 2011 and replaced the Income and Health Levies. The marginal rate for each of these levies was 6% and 5%, respectively, or 11% in total. The marginal rate for the USC was 7%. Taken in isolation the introduction of the USC, therefore, would have had the effect of reducing by 4 percentage points the top marginal tax rates for both PAYE and self-employed income earners paying at those rates. At the same time, the PRSI ceiling for PAYE taxpayers, which then stood at €75,036, was abolished which had the result of increasing by 4 percentage points the top marginal tax rate for PAYE taxpayers. So the two changes – the introduction of the USC and the abolition of the PRSI ceiling - taken together meant that the marginal tax rate for PAYE taxpayers remained unchanged.

In the case of the self-employed, the PRSI income ceiling for the self-employed had been abolished in Budget 2001. Therefore, without further change, the introduction of the USC would have reduced the top marginal rate for these taxpayers by 4 percentage points and would have had the unintended effect of benefiting high earning self-employed income earners, resulting in some high earning self-employed income earners actually making a gain from Budget 2011 in comparison to all other taxpayers.

To avoid the situation in which the top marginal rate for PAYE taxpayers remained unchanged while self-employed taxpayers benefited from a reduction of that rate by 4 percentage points, two further changes were made. A higher rate of USC of 10% was introduced for the self-employed in respect of income in excess of €100,000 and an additional 1 percentage point was added to the self-employed PRSI rate. This restored the self-employed top marginal tax rate to 55%, (41% income tax, 7% USC, an additional 3% USC on income over €100,000 and 4% PRSI).

Note (i): the ‘marginal’ rate of tax equates to the top rate of tax which an individual is paying.

Note (ii): the 10% rate of USC only applies to income over €100,000. The standard rates of Universal Social Charge apply to income under €100,000 and are:

- 2% on the first €10,036

- 4% on the next €5,980

- 7% on the balance.

An individual whose total income for a year does not exceed €10,036 is exempt from USC.

Note (iii): Self-employed individuals with income of less than €100,000 and PAYE employees pay tax, USC and PRSI at the same marginal rate of 52%.

Tax Code

Questions (204)

Arthur Spring

Question:

204. Deputy Arthur Spring asked the Minister for Finance if he considers the universal social charge to be an income tax; and if he will make a statement on the matter. [36780/13]

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Written answers

The position is that Section 12 of the Taxes Consolidation Act 1997 provides that Income tax is chargeable on all property, profits and gains described in Schedules C, D, E and F. These Schedules are defined in sections 17, 18, 19 and 20 of the Taxes Consolidation Act 1997.

Universal social charge is a tax on income specified in the Table to section 531AM of the Taxes Consolidation Act 1997. Therefore, while universal social charge is a tax on income, it is not income tax within the meaning of the Income Tax Acts.

Appointments to State Boards

Questions (205)

Catherine Murphy

Question:

205. Deputy Catherine Murphy asked the Minister for Finance the present gender balance of the total members of State boards under the aegis of his Department; if the ratio has changed significantly over the course of the present Government's term; and if he will make a statement on the matter. [36790/13]

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Written answers

In response to the Deputy’s question the gender balance in respect of Boards under the aegis of my Department is 75% male and 25% female. My Department is mindful of the Government's target of achieving 40% female membership on State Boards. Candidates applying for vacant positions on boards under the aegis of my Department are assessed primarily on their knowledge and expertise and options are presented to me for appointment on that basis. The ratio has not changed significantly over the course of the present Government's term.

Public Procurement Regulations

Questions (206)

Catherine Murphy

Question:

206. Deputy Catherine Murphy asked the Minister for Education and Skills if it is possible for an organisation like the South West Regional Drugs Task Force to become trainers in the Momentum scheme; and if he will make a statement on the matter. [36132/13]

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Written answers

The Momentum fund is administered under normal procurement rules. There was a 1st stage process to list potential providers on a panel. This entailed establishing that they were currently trading as a training business, in good standing, with sufficient policies and procedures to deliver Momentum projects. Businesses also had to be registered as recognised by, or aligned to, an awarding body. The criteria may change for future programmes depending on the evaluation of the current Momentum project.

The 1st stage of the Momentum procurement process took place in mid-2012 and any additional publication of tender requests will be made in dependence on future budget allocation. There is currently no e-tender call to be listed as a potential Momentum provider.

An Comhairle Um Oideachas Gaeltachta agus Gaelscolaíochta

Questions (207)

Sandra McLellan

Question:

207. D'fhiafraigh Deputy Sandra McLellan den Aire Oideachais agus Scileanna an ndéanfaidh sé ráiteas maidir le todhchaí COGG; cén tionchar a bhí ag cinneadh an Aire COGG a thabhairt faoi bhráid CNCM; cé na himpleachtaí a bheidh ag an gcinneadh sin i dtaca leis an Straitéis 20 Bliain don Ghaeilge agus an bhfuiltear fós chun an cinneadh sin a chur i bhfeidhm. [36334/13]

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Written answers

Tá mo chinneadh polasaí déanta agam COGG agus an CNCM a chomhshuí. Chuir mé an Chomh-aireacht ar an eolas faoi seo agus phléigh mé go hiomlán leo é an tSamhain seo caite. Táim cinnte gur fearr a n-éascófar le feidhmiú mholtaí na straitéise 20 Bliain don Ghaeilge 2010 - 2030, de bharr iad a bheith comhshuite, agus, ina theannta sin, le feidhmiú Acht na Gaeltachta, 2012, agus leis an leasú curaclach atá ar siúl faoi láthair ar an mbunoideachas agus ar an iar-bhunoideachas.

Beidh tuilleadh deiseanna ann chun sineirgí a chur ar siúl idir obair na CNCM de réir mar a fhorbraíonn sé curaclaim agus obair COGG de réir mar a ghineann sé acmhainní. Tá a Bord, a buiséad agus a lucht foirne féin ag COGG.

Private Schools

Questions (208, 249)

Seán Fleming

Question:

208. Deputy Sean Fleming asked the Minister for Education and Skills his views on the pupil-teacher ratio for Protestant fee paying schools; if there should be any change in this area or will he retain it at its current level; and if he will make a statement on the matter. [35941/13]

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Brendan Smith

Question:

249. Deputy Brendan Smith asked the Minister for Education and Skills further to Parliamentary Question No. 148 of 15 May 2013, if he will provide further consideration to the widespread concerns of Boards of Management and Parents' Associations of smaller fee-charging schools in relation to the difficulties facing them; if specific additional assistance will be allocated to such schools; and if he will make a statement on the matter. [36763/13]

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Written answers

I propose to take Questions Nos. 208 and 249 together.

The Government has protected frontline services in schools to the greatest extent possible in the recent budget and there will no reduction in teacher numbers in primary schools and in free second level schools for the 2013/14 school year as a result of the budget. The DEIS scheme for disadvantaged schools is also fully protected with no overall changes to staffing levels or funding as a result of the budget.

At post primary level and in order to promote fairness in funding second level schools, a two-point increase in the pupil teacher ratio in fee-charging second level schools will be introduced in September 2013. There are currently 55 schools out of 723 post-primary schools charging fees ranging from €2,550 to €10,065 for day pupils.

At present, the State pays the salaries of one teacher for every 21 pupils in these schools compared with one teacher for every 19 pupils in schools in the free education scheme. A ratio of 18.25 pupils to one teacher, applies in DEIS schools. This will rise to 23:1 in fee-charging schools from September 2013.

However, these schools have the resources, through fees charged, to employ teachers privately, an option which is not available to schools in the free education scheme. A report on the analysis of the tuition income of fee-charging schools carried out by the Department was recently published and shows that the schools in question have €81m in discretionary income that schools in the free scheme do not have.

It is important to note that the report does not contain any policy proposals at this stage. However, even after the Budget changes are implemented, the discretionary income available to these schools will still be quite considerable.

There are some concerns within the Church of Ireland community on the recent budget measure affecting fee-charging schools. This Government recognises the importance of ensuring that students from a Protestant or Reformed church background can attend a school that reflects their denominational ethos while at the same time ensuring that funding arrangements are in accordance with the provisions of the Constitution.

How best to sustain education provision for widely dispersed and small local communities does present as a particular challenge, especially in any locality where enrolment is declining to single figures. The Government is intent in fostering pluralism in school provision. Supporting small communities including minorities in maintaining their schools is part of that policy.

With regard to the fee-charging Protestant schools, an arrangement exists whereby funding is provided by my Department to the Secondary Education Committee (SEC), an organisation run by the churches involved in managing the Protestant secondary schools. The SEC then disburses funds to the Protestant fee-charging schools on behalf of pupils who would otherwise have difficulty with the cost of fees and who, in the absence of such financial support, would be unable to attend a second level school of a reformed church or Protestant ethos. Funding amounts to €6.5 million annually. This fund ensures that necessitous Protestant children can attend a school of their choice.

School Accommodation

Questions (209)

Terence Flanagan

Question:

209. Deputy Terence Flanagan asked the Minister for Education and Skills the position regarding a grant application in respect of a school (details supplied) in Dublin 3; and if he will make a statement on the matter. [35966/13]

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Written answers

A major school building project for the school referred to by the Deputy is at an advanced stage of architectural planning. The project was authorised to commence Stage 2b - Detailed Design in December of 2012. This stage involves securing planning permission, fire certificate and disability access certificate and the completion of tender documents.

Due to competing demands on my Department's capital budget, imposed by the need to prioritise the limited funding available for the provision of additional school accommodation to meet increasing demographic requirements, it was not possible to include this project in the 5 year construction programme announced in 2012.

However, school building projects, including the project referred to by the Deputy, which have not been included in the five year construction programme, but which were previously initiated will continue to be progressed to final planning stages in anticipation of the possibility of further funds being available to the Department in the future.

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