Tuesday, 3 Dec 2013

Written Answers Nos. 59 - 73

Pensions Levy

Questions (59)

Olivia Mitchell

Question:

59. Deputy Olivia Mitchell asked the Minister for Finance the situation affecting existing employees of Permanent TSB whose insolvent fund was wound up in May last, but who now find themselves part of a defined contribution scheme as a result of bank efforts to reduce its cost by 8% as requested by him, and consequently find their greatly depleted funds are liable for the pension levy, though the fund itself still has all the liabilities of a defined benefit pension for existing retirees; and if he will consider an exemption for those nearing retirement in view of the fact that they meet two of the three requirements for exemption to the tax under the Protection of Employees Employment Insolvency Act 1984. [51339/13]

Written answers

Minister for Finance

I announced in my Budget 2014 speech that the 0.6% Pension Fund Levy introduced to fund the Jobs Initiative in 2011 will be abolished from the 31st of December 2014. I will however, introduce an additional levy on pension funds at 0.15% to, among other things, continue to help fund the Jobs Initiative. The additional levy, within the existing legal framework, will apply to pension fund assets in 2014 and 2015. The chargeable persons for the pension fund levy are the trustees or other persons (including insurance companies) with responsibility for the management of the assets of the pension schemes or plans.

There are two exceptions to the requirement to pay the levy provided for in the governing legislation (section 125B of the Stamp Duties Consolidation Act 1999).

The first exception provides that the levy will not apply to the assets of occupational pension schemes in respect of employees whose employment is, or was, wholly exercised outside the State. In other words, the levy does not apply to the extent that a pension scheme is intended to provide retirement benefits outside the State.

The second exception provides that the levy will not apply where the trustees of a scheme have passed a resolution to wind-up the scheme and where the business in respect of which the scheme was established is insolvent in accordance with the Protection of Employees (Employers’ Insolvency) Act 1984.

The fact that there are very limited situations where the levy does not have to be paid explains, in part at least, why it was possible to introduce it at a relatively low rate of 0.6% in the first place and to keep the rate of the additional levy as low as 0.15%. Making an exception for the Permanent TSB scheme, notwithstanding that it clearly does not meet all of the existing qualifying conditions for exception, will inevitably give rise to demands for exceptions to be granted in other situations that would be viewed by those seeking them as being equally deserving. The inevitable result of this course of action would be a narrowing of the levy base which would result in a greater imposition on the non-exempt schemes and I am not prepared to go down that road.

Tax Yield

Questions (60)

Clare Daly

Question:

60. Deputy Clare Daly asked the Minister for Finance if he will verify the accuracy of correspondence (details supplied) relating to income tax yield. [51353/13]

Written answers

Minister for Finance

I am advised by the Revenue Commissioners that, on the basis of the incomes table supplied, the conclusions referred to by the Deputy are arithmetically correct. The table contains a distribution of incomes and income tax by reference to ranges of income for the income tax year 2013 which was provided in my reply of 30 April 2013 to Parliamentary Question Number 151 (Reference number 19815/13). The figures were provisional estimates from the Revenue tax-forecasting model using actual data for the year 2010 adjusted as necessary for income and employment trends in the interim.

The Deputy may be interested to know that the figures in question have since been revised on the basis of actual data for the year 2011 and are set out in the following table.

As regards the question of the average rate of income tax on the highest incomes being lower than the average rate of tax on somewhat lower incomes I should point out that “gross income”, the basis on which these average tax rates are calculated, is not the basis on which the charge to income tax is applied. In arriving at taxable income the figure for gross income must be reduced by various deductions and reductions which are legitimately allowable for income tax such as deductions for capital allowances, interest paid, losses, allowable expenses and retirement annuities.

An examination of the historical data for 2011, the latest available, indicates that the aggregated claims for such deductions by income earners with incomes in excess of one million were almost 4 % of gross income higher than the corresponding proportion that applied to income earners with incomes between €500,000 and one million. This means that the proportion of gross income of income earners with incomes in excess of one million that was legitimately available for taxation was 4% less than was the case in respect of income earners with incomes between €500,000 and one million.

All Income earners for Income Tax Year 2013 (provisional)

Gross Income Range €	Gross Income €	Numbers	Income Tax €	Average Income €	Average Tax €	Tas as % of Income
10,000 or less	1,701,125,991	386,113	413,033	4,406	1	0.0%
10,001 – 20,000	5,991,247,957	394,547	40,310,708	15,185	102	0.7%
20,001 – 30,000	9,894,189,836	398,715	376,689,221	24,815	945	3.8%
30,001 – 40,000	10,526,536,676	302,643	761,371,741	34,782	2,516	7.2%
40,001 – 50,000	9,188,240,949	205,698	1,014,747,279	44,669	5,064	11.3%
50,001 – 60,000	7,439,955,833	136,170	1,058,209,385	54,637	7,771	14.2%
60,001 – 70,000	6,111,257,479	94,391	968,351,805	64,744	10,259	15.8%
70,001 – 80,000	4,885,203,793	65,408	858,055,522	74,688	13,119	17.6%
80,001 – 90,000	3,791,883,977	44,761	726,494,017	84,714	16,231	19.2%
90,001 – 100,000	2,974,203,171	31,396	611,283,510	94,732	19,470	20.6%
100,001 – 125,000	5,083,135,796	45,853	1,140,444,989	110,857	24,872	22.4%
125,001 – 150,000	2,866,266,063	21,073	701,259,789	136,016	33,278	24.5%
150,001 – 175,000	1,871,791,838	11,601	482,446,104	161,347	41,587	25.8%
175,001 – 200,000	1,295,536,585	6,944	344,645,246	186,569	49,632	26.6%
200,001 – 250,000	1,714,547,953	7,718	469,551,354	222,149	60,383	27.4%
250,001 – 300,000	1,155,249,712	4,327	324,876,900	272,657	76,676	28.1%
300,001 - 350,000	815,682,198	2,530	235,605,616	322,404	93,125	28.9%
350,001 – 400,000	591,932,771	1,585	171,761,138	373,459	108,369	29.0%
400,001 – 450,000	436,035,890	1,028	132,133,368	424,159	128,534	30.3%
450,001 – 500,000	352,328,419	743	107,279,137	474,197	144,386	30.4%
500,001 – 750,000	1,157,652,860	1,927	350,608,421	600,754	181,945	30.3%
750,001 – 1,000,000	554,709,996	648	165,893,488	856,034	256,008	29.3%
1,000,001 – 2,000,000	733,261,467	549	214,029,105	1,335,631	389,853	29.2%
Over 2,000,000	527,352,863	130	150,954,072	4,056,560	1,161,185	28.6%
Overall Total	81,659,329,617	2,166,411	11,434,414,947	37,693	5,278	14.0%

It should be noted that the income ranges shown in the above table relate to Gross Income as defined in Revenue Statistical Report 2011.

The figures are estimates from the Revenue tax-forecasting model using actual data for the year 2011 adjusted as necessary for income and employment trends in the interim. Therefore these are therefore provisional and likely to be revised.

It should also be noted that a married couple who has elected or has been deemed to have elected for joint assessment is counted as one tax unit.

Departmental Expenditure

Questions (61)

Terence Flanagan

Question:

61. Deputy Terence Flanagan asked the Minister for Finance the number of officials in his Department that receive the cost of club membership fees, including sports clubs and professional bodies, as part of their contract of employment; the total cost per year to his Department of paying these fees; and if he will make a statement on the matter. [51366/13]

Written answers

Minister for Finance

In my Department, no official has received the cost of club membership fees as part of their contract of employment.

Departmental Expenditure

Questions (62)

Terence Flanagan

Question:

62. Deputy Terence Flanagan asked the Minister for Finance if his Department pays for any of its employees to receive third-level qualifications; if so, the annual cost for each of the past five years; if the employee will receive a financial bonus as a result of receiving this qualification; and if he will make a statement on the matter. [51380/13]

Written answers

Minister for Finance

The Department of Finance continues to invest in staff development in order to supplement the skills and qualifications of our teams through a combination of internal and external training and development initiatives. Under the revised Statement of Strategy 2011-2014, the Department aims to improve training in order to develop greater technical, management and leadership skills. Using the performance management and development system (PMDS), the Department will review our staff’s performance, and identify any skills requiring enhancement to ensure our training resources are used most effectively. The Department also undertook a comprehensive Training Needs Analysis (TNA) survey in late 2012 which has also assisted in identifying the training and development needs of staff within the Department.

The following is a list of all third level courses, training programmes and courses and accompanying cost for the 2012/2013 academic year provided for employees by the Department of Finance. Please note some of the academic courses are still on-going.

Course Title	Cost €
Associate of the Irish Taxation Chartered Tax Advisor Programme	1,748.50
Associate of the Irish Taxation Chartered Tax Advisor Programme	1,963.50
Bachelor of Arts Degree	2,900.00
Certificate in Safety & Health in Work	2,295.00
Certified Project Management Diploma	2,250.00
Change Management Certification	2,900.00
Chartered Tax Advisor Programme - Part One	1,248.50
Chartered Tax Advisor Programme - Part One	1,130.50
M.Sc in Economics	7,449.00
M.Sc in Investment, Treasury & Banking - DCU	7,597.00
Master of Economic Science in Policy Analysis	7,900.00
Master of Economic Science in Policy Analysis	2,500.00
Master of Economic Science in Policy Analysis	2,500.00
Professional Accountancy Examinations	1,600.00
Total:	44,382.00

My Department is not in a position to provide details of refund of fees for years previous to 2012/2013 at this time and will revert to the Deputy directly in due course. No employee will receive a financial bonus as a result of receiving those qualifications.

Property Taxation Administration

Questions (63)

Michael Ring

Question:

63. Deputy Michael Ring asked the Minister for Finance the way a person (details supplied) in County Mayo can pay their local property tax liability in view of the fact that they have never received any correspondence from the Revenue Commissioners for the 2013 liability or the 2014 liability; and if he will make a statement on the matter. [51434/13]

Written answers

Minister for Finance

I am advised by Revenue that a key aspect of the work undertaken in connection with the administration of Local Property Tax (LPT) was the development of a register of residential properties in the State. The process involved consolidating property address data, which was extracted from various Government and non-Government sources, in respect of almost two million records. In some instances the data matching was complicated by different variations in addresses and names held by the different agencies. In some instances, particularly in rural locations, the prevalence of non-unique addresses complicated the automatic upload of data to the Property Register. These relatively small number of cases required manual intervention to match the property to the correct owner. In this, I am advised that the person in question was not correctly linked to his property at the time of the 2013 LPT general issue. The required linkage did not take place because the person’s PPS number was not active on Revenue’s computer system at that time. As a consequence no correspondence issued to the person in regard to his LPT obligations.

Revenue has confirmed that the person’s daughter did file the 2013 Return through the online system and paid the tax due on his behalf. However, while the Return and payment were correctly recorded, the person’s PPS number did not transfer across to the Property Register and again as a consequence no output issued to him for 2014.

Revenue has assured me that the person’s details are now correctly linked on the Property Register and his records are fully up to date, in regard to both 2013 and 2014.

Property Taxation Collection

Questions (64)

Joan Collins

Question:

64. Deputy Joan Collins asked the Minister for Finance if it is possible for the remaining persons still on deserted wife's benefit or allowance to be considered eligible to pay the local property tax like other recipients of long-term social welfare payments from said payment; and if he will make a statement on the matter. [51442/13]

Written answers

Minister for Finance

Part 10 of the Finance (Local Property Tax) Act 2012 (as amended) provides for payment of the Local Property Tax (LPT) by deduction at source from certain payments made by the Department of Social Protection. I am advised by the Revenue Commissioners that the legislative provisions concerning deduction of LPT from certain Department of Social Protection payments were drafted in consultation with that Department. The Commissioners have confirmed that LPT can only be deducted from the State Pension (Contributory and Non-Contributory), Widow/Widower’s or Surviving Civil Partner’s Contributory and Non-Contributory Pension, State Pension (Transition), One-Parent Family payment, Invalidity Pension, Carer’s Allowance, Disability Allowance and Blind Pension. It is therefore not possible to facilitate the deduction requested by the Deputy.

I am advised by my colleague the Minister for Social Protection that Deserted Wife’s Allowance and Deserted Wife’s Benefit are social welfare payments made to women who were deserted by their husbands. These schemes closed to new applications in January, 1997 when the One-Parent Family payment was introduced. I am also advised by Minister for Social Protection that given the relatively small numbers of customers involved and the complexity of the amendments to the social welfare legislation which would be required to implement deduction at source of LPT from these closed schemes, such amendments are not justified in the context of social welfare legislation.

The Revenue Commissioners further advise that property owners can choose from a wide range of options for paying the tax and information on these options is available on their website or by calling the LPT helpline on 1890 200 255. As the e-filing deadline for 2014 has now passed, property owners are advised to submit their Payment Instruction for 2014 to Revenue as soon as possible either by accessing their LPT record online or by calling the LPT helpline.

Credit Unions Regulation

Questions (65)

Lucinda Creighton

Question:

65. Deputy Lucinda Creighton asked the Minister for Finance the total number of staff in the Central Bank who are responsible for overseeing credit unions that have been paid employees of credit unions or volunteers in credit unions; and if he will make a statement on the matter. [51450/13]

Written answers

Minister for Finance

I have been informed by the Central Bank that it does not store the specific information requested by the Deputy. However, I have been informed that staff employed in the Registry of Credit Unions, which is responsible for overseeing credit unions, have a range of backgrounds including accounting, economics, legal and compliance. The Registry of Credit Unions ensures on appointment, that all staff are suitably qualified for their role. Under section 15(10) of the Credit Union and Co-Operation with Overseas Regulators Act 2012, which is due to commence in March 2014, an officer* or other member of the Central Bank who is involved in the regulation of credit unions is not eligible to become a director of a credit union.

* Within the meaning of section 2 of the Central Bank Act 1942.

Credit Unions Regulation

Questions (66)

Lucinda Creighton

Question:

66. Deputy Lucinda Creighton asked the Minister for Finance if he will provide the title of the person in the Central Bank who has ultimate responsibility for oversight and imposing restrictions on lending within credit unions; the level at which staff in the Central Bank have the authority to make decisions regarding lending restrictions; if he will provide the criteria assessed to determine specific lending restrictions that may be imposed on certain credit unions but not others; and if he will make a statement on the matter. [51451/13]

Written answers

Minister for Finance (Deputy Michael Noonan)

The imposition of lending restrictions is the responsibility of the Registrar of Credit Unions - RCU - who is the independent regulator for credit unions at the Central Bank. Within her independent regulatory discretion, the Registrar acts to support the prudential soundness of individual credit unions, to maintain sector stability and to protect the savings of credit union members. I have been informed that it has been necessary to put lending restrictions in place in credit unions where there are regulatory concerns about the operation of these individual credit unions and the resultant risk to members' savings.

The criteria assessed to determine the imposition of lending restrictions includes, but is not limited to the following:

- Prudential returns which are unaudited returns, submitted to the RCU;

- Financial ratios which cover level of arrears and provision coverage; and

- The governance framework within the credit union.

Decisions on regulatory restrictions which are imposed in the form of directions under the Act are made by the Registrar. Other regulatory restrictions may be imposed as part of on-going supervisory engagement. These may be dealt with by the Registrar, but they may also be dealt with by a member of the management team, depending on the issue.

Credit union lending restrictions currently in place are reviewed on a regular basis to determine whether they are still set at appropriate levels. Lending restrictions are typically given effect by regulatory directions. As from 1 August 2013 regulatory directions are appealable to the Irish Financial Services Appeals Tribunal - IFSAT.

Overall in the current environment, in relation to lending, all credit unions are required to ensure that they apply enhanced scrutiny to all new loan applications and that all applications are fully assessed to determine the borrower’s ability to repay. Credit unions are also required to ensure that they put in place clear limits on the total funds available for granting loans, bearing in mind the need to ensure that a credit union maintains adequate levels of liquidity to support its operations.

Tax Collection

Questions (67)

Jack Wall

Question:

67. Deputy Jack Wall asked the Minister for Finance if a person (details supplied) in County Kildare is being deducted the proper taxation; and if he will make a statement on the matter. [51482/13]

Written answers

Minister for Finance

I have been advised by the Revenue Commissioners that they are of the view that the correct amount of tax is being deducted from the person concerned. Records indicate that the spouse of the person concerned is in receipt of taxable income from the Department of Social Protection. The tax credit has been reduced to take account of this taxable income.

Property Taxation Application

Questions (68)

Mary Mitchell O'Connor

Question:

68. Deputy Mary Mitchell O'Connor asked the Minister for Finance the reason a person (details supplied) is responsible for the property tax on a house for 2014 even though it will not be their property for any period within that year; and if he will make a statement on the matter. [51498/13]

Written answers

Minister for Finance

Insufficient detail has been provided to enable me to comment on the specific case but the following general information is relevant. In accordance with the Finance (Local Property Tax) Act 2012 (as amended), liability for Local Property Tax (LPT) will arise where a person owns a residential property on the liability date, which was 1 May 2013 for 2013 and for subsequent years is 1 November in the preceding year. Where a liable person sells their residential property between 2 November 2013 and 31 December 2013, provided that they owned the property on 1 November 2013, they will be liable to pay LPT on that property for 2014.

The 1 November liability date has been the subject of a number of previous Parliamentary Questions. In reply to Questions Nos. 221 (49518/13) and 223 (49556/13) on 19 November 2013 I stated that having a liability date before the year commences is preferable as there is certainty about who the liable person is for the coming year, that person has a reasonable amount of time to make the necessary provisions and they have access to the widest possible range of options for paying the tax.

For a tax such as LPT to function properly, legislation must specify a liability date for the tax to have application for a particular year. Whatever date is prescribed, the question of liability when there is a change of ownership has to be managed and I expect the LPT liability is likely to be factored in during negotiations between the parties on the sale price and the closing date of a particular contract.

An individual selling a property will often be purchasing another property at around the same time. While a vendor who owns a property on 1 November 2013 is liable for the 2014 LPT on that property, if they do not purchase another property before 1 November 2013 they will not be liable for the 2014 LPT on that "replacement" property - whoever is the owner as of 1 November 2013 will be liable.

Detailed guidance on LPT issues arising in the context of the sale or transfer of a residential property was prepared by the Revenue Commissioners in consultation with the Law Society and is available since last August on the Revenue website at http://www.revenue.ie/en/tax/lpt/sale-transfer-property.html and on the Law Society’s website.

Property Taxation Administration

Questions (69)

Finian McGrath

Question:

69. Deputy Finian McGrath asked the Minister for Finance the reason it is a premium rate number for persons ringing regarding queries on their property tax; and the reason persons with more than one property are being discriminated against when it comes to paying their tax as they can only pay it online. [51552/13]

Written answers

Minister for Finance

I am advised by the Revenue Commissioners that the Local Property Tax (LPT) helpline 1890 200 255 number is a low cost phone service and is not a premium rate number. The charge for this service is based on local rates and the cost of the call is shared between the calling party and the called party. The Commissioners use 1890 “LoCall” numbers for some of their most popular services including their helpline for PAYE taxpayers. I am advised by the Revenue Commissioners that it is not possible to advise on the cost to a person of phoning the Local Property Tax 1890 telephone helpline. The price is dependent on the individual’s phone network as well as the type of ‘phone package’ that the individual has with his/her operator. Some operators operate on a price per call basis while others charge per minute. The requirement for owners of multiple properties to file and pay LPT Returns electronically is contained in the Finance (Local Property Tax) Act 2012 (as amended). The Commissioners have confirmed that a significant number of multiple property owners are already obliged, by virtue of the Taxes Consolidation Act 1997, to pay and file electronically other tax returns they complete and this is in keeping with Revenue’s strategic objective to encourage the use of electronic channels. It is also in line with the Government’s e-agenda for service delivery.

Revenue’s on-line system for filing and paying LPT is secure, user friendly and easily accessible on the Revenue website. From the taxpayer’s perspective, using the on-line system is the quickest and most straightforward way to file Returns and pay the tax, particularly so where there are multiple properties involved, as the system automatically calculates the LPT due for the individual properties and makes it easy to select a payment method from the wide range of options available. In addition, property owners who use the on-line system also benefit from a three-week extended filing deadline. Providing an extension to filing deadlines is common practice when a taxpayer uses Revenue’s online services to meet his/her obligations.

Section 36 of the Act allows a property owner to nominate another person, such as a relative, to file and pay on-line on their behalf. Furthermore, owners can call the LPT Helpline 1890 200 255, where there is a dedicated service whereby the return may be filed on-line on their behalf. This particular service has been extensively used by owners of more than one property.

Tax Yield

Questions (70)

Seán Kenny

Question:

70. Deputy Seán Kenny asked the Minister for Finance the cost to the Exchequer if the €2.50 levy on debit cards was abolished; and if he will make a statement on the matter. [51565/13]

Written answers

Minister for Finance

I am informed by the Revenue Commissioners that Stamp Duty is charged at €2.50 per year per debit only card, €2.50 per year per ATM only card and €5 per combined (ATM and debit) card. In 2012, the yield from Stamp Duty on debit only cards was c. €30,000, the duty on ATM only cards yielded €1m, while the duty on combined ATM and debit cards yielded €15.51m. These amounts would be the approximate costs of abolishing the duty on such cards. The Deputy may be aware that no Stamp Duty is charged on ATM, debit or combined cards associated with “basic payment accounts”, which are available to individuals who were “financially excluded” for three years prior to opening such accounts.

Tax Reliefs Availability

Questions (71)

Luke 'Ming' Flanagan

Question:

71. Deputy Luke 'Ming' Flanagan asked the Minister for Finance if his Department is willing to provide further relief and support for those who adopt children here, in view of the low rate of adoption of Irish-born children at the moment; and if he will make a statement on the matter. [51586/13]

Written answers

Minister for Finance

As the Deputy is aware, there is a suite of measures currently in place to support parents with young families. I have no plans to introduce any further tax reliefs for those who adopt children. As adoption legislation is a matter for the Minister for Children and Youth Affairs, the Deputy may wish to direct his questions to that Minister.

Property Taxation Administration

Questions (72)

Róisín Shortall

Question:

72. Deputy Róisín Shortall asked the Minister for Finance the reason a local property tax letter was not issued to a person (details supplied) in Dublin 9; if same will be arranged; and if he will make a statement on the matter. [51604/13]

Written answers

Minister for Finance

I am advised by Revenue that a key aspect of the work undertaken in connection with the administration of Local Property Tax (LPT) was the development of a register of residential properties in the State. The process involved consolidating property address data, which was extracted from various Government and non-Government sources, in respect of almost two million records. In some instances the data matching was complicated by different variations in addresses and names held by the different agencies. In some instances these variations resulted in either duplications on the Property Register or people being incorrectly linked to properties for which they were not the liable person.

In regard to the case referred to by the Deputy, the 2013 LPT 1 Return issued to the address that Revenue previously used when corresponding with the person in question. The LPT 1 Return was returned to Revenue by the current occupiers of this property but no alternative address was supplied in respect of the person in question. The person did subsequently fulfill her 2013 LPT obligations through the online system but did so without using the correct property identification number. This resulted in a ‘mis-match’ between the person in question and her new property, which resulted in the 2014 payment request notification not issuing.

Revenue has confirmed to me that the person in question has now been correctly matched with her new property and her records are fully in order. Revenue has also confirmed that it will make direct contact with the person in the coming days in this regard and also to offer her any assistance she might require in meeting her 2014 LPT obligations.

Tax Yield

Questions (73)

Olivia Mitchell

Question:

73. Deputy Olivia Mitchell asked the Minister for Finance the estimated total annual income tax take in 2012 from public service employees; and if he will make a statement on the matter. [51715/13]

Written answers

Minister for Finance

I am advised by Revenue that the information sought by the Deputy is not maintained in a format that easily facilitates extraction of the specific figures from the overall income tax take. However, on the basis of an estimated ‘sectoral’ analysis of taxes collected annually, Revenue has calculated that the net income tax (inclusive of the Universal Social Charge) collected through the PAYE system from public sector employees in 2012 was of the order of €3.8 billion.