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Wednesday, 11 Dec 2013

Written Answers Nos. 23-42

Defence Forces Deployment

Questions (23)

Pádraig MacLochlainn

Question:

23. Deputy Pádraig Mac Lochlainn asked the Minister for Defence if his attention has been drawn to the recent violent attack by Malian Government soldiers on protesters in the rebel held north east of the country; that Turaeg rebels have ended their ceasefire agreement with the Malian Government as a result; and if he has any plans to withdraw Irish troops serving in the country. [52776/13]

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Written answers

I assume the Deputy is referring to reports of clashes between protestors and security forces in Kidal, a town in the northern part of Mali, on 28 November 2013. I understand the violence broke out ahead of the planned arrival of the Malian Prime Minister to Kidal. However, I have been informed that the circumstances and details of the incident have yet to be established. I strongly condemn the violence and would urge all parties to exercise restraint, and stand by their commitments contained in the Ouagadougou Agreement. This Agreement, which was signed on 18 June 2013 between the transitional Government and the armed groups in the northern regions of Mali, is a preliminary agreement to hold the Presidential election and inclusive peace talks in Mali. The Presidential elections and recent Parliamentary elections were significant milestones in the restoration of constitutional order in Mali, and signs that Mali is making positive political progress and returning to democratic Government. I hope the final round of Parliamentary elections due to take place next week can proceed in a peaceful environment and give the Malian people the opportunity to decide their political leadership.

The recent violence in northern Mali only serves to highlight the need for international support to help Mali overcome the current crisis. The Defence Forces continue to monitor the security situation in Mali closely. There are no plans at this time to withdraw the eight (8) Irish personnel currently serving with EU Training Mission in southern Mali.

Question No. 24 answered with Question No. 16.

Air Corps Equipment

Questions (25)

Pádraig MacLochlainn

Question:

25. Deputy Pádraig Mac Lochlainn asked the Minister for Defence his plans to upgrade the range of aircraft available to the Defence Forces Air Corps. [52778/13]

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Written answers

There are no plans for the acquisition of new aircraft for the Air Corps at the present time. There has been significant expenditure on the Air Corps fleet in recent years. The comprehensive investment programme included the delivery of Pilatus training aircraft at a total cost of €60m, the acquisition of two light utility EC 135 helicopters at a cost of €12.8m, the acquisition of six utility AW 139 helicopters at a cost of €75m and a major mid life upgrade on the two CASA maritime patrol aircraft. The provision for the Air Corps in 2013 mainly relates to the maintenance and Power by the Hour contracts set up to keep the Air Corps fleet fully operational with specific maintenance work being carried out on the CASA Maritime Patrol Aircraft over the next two years, mainly related to the overhaul of engines on the aircraft.

I am satisfied that the equipment, aircraft and technology available to the Air Corps are of a high standard and commensurate with the tasks assigned by Government.

Defence Forces Representative Organisations

Questions (26)

Seán Ó Fearghaíl

Question:

26. Deputy Seán Ó Fearghaíl asked the Minister for Defence the reason he did not attend this year's biennial RACO conference; and if he will make a statement on the matter. [52905/13]

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Written answers

Recently, I accepted the invitation extended to me by RACO's National Executive to attend their Biennial Delegate Conference (BDC), held this year in Wicklow, on 3 December 2013. While I had attended the PDFORRA Annual Delegate Conference earlier this year, unfortunately, I was unable to attend the RACO BDC on this occasion as I needed to attend to other urgent business, i.e. the publication of the Smithwick Tribunal Report. I was very disappointed that I was unable to join RACO at their Conference. At very short notice I requested the Minister of State at the Department of Defence, Mr. Paul Kehoe, T.D., to deputise for me at the BDC.

Minister of State Kehoe very kindly obliged and conveyed apologies to RACO on my behalf. Regarding the RACO Biennial Delegate Conference, Minister of State Kehoe addressed delegates on a wide range of issues including the preparation of the new White Paper on Defence; the significant reorganisational reforms over the last twelve months; the participation of RACO in the Haddington Road Agreement negotiations and the broader international context in which Ireland's Defence policy sits. I am given to understand that the Delegates responded positively to Minister of State Kehoe's address and extended to him and my officials every courtesy while in attendance at Conference. The Minister of State also heard the issues and concerns of RACO, as expressed by their General Secretary in his address to Conference and these will be given careful consideration.

Question No. 27 answered with Question No. 22.

Middle East Issues

Questions (28, 29, 32, 33, 34, 35)

Simon Harris

Question:

28. Deputy Simon Harris asked the Tánaiste and Minister for Foreign Affairs and Trade his views on the current situation in Gaza following comments made by the UN humanitarian co-ordinator on 1 November 2013 regarding the need for urgent action to address the looming humanitarian crisis; and if he will make a statement on the matter. [53172/13]

View answer

Olivia Mitchell

Question:

29. Deputy Olivia Mitchell asked the Tánaiste and Minister for Foreign Affairs and Trade the action that he will take to help avert the looming humanitarian crisis in Gaza due to the closure of its only power point and increased tightening of the blockade of Gaza, making the area as described by UNRWA as quickly becoming uninhabitable; and if he will make a statement on the matter. [53210/13]

View answer

Joe Higgins

Question:

32. Deputy Joe Higgins asked the Tánaiste and Minister for Foreign Affairs and Trade if his attention has been drawn to the recent Amnesty International report on the humanitarian crisis in Gaza that outlines the impact of the Israeli blockade on the health, sanitation and power supply of the people of Gaza; and if he will make a statement on the matter. [53269/13]

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Joe Higgins

Question:

33. Deputy Joe Higgins asked the Tánaiste and Minister for Foreign Affairs and Trade the representations that he has made to the Israeli authorities regarding the blockade on Gaza. [53270/13]

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Joe Higgins

Question:

34. Deputy Joe Higgins asked the Tánaiste and Minister for Foreign Affairs and Trade the representations that he has made to the Egyptian authorities regarding the closing of crossings from Egypt to Gaza. [53271/13]

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Joe Higgins

Question:

35. Deputy Joe Higgins asked the Tánaiste and Minister for Foreign Affairs and Trade his views on whether the Israeli blockade of Gaza amounts to collective punishment. [53272/13]

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Written answers

I propose to take Questions Nos. 28, 29 and 32 to 35, inclusive, together.

I remain seriously concerned about the situation in Gaza, both the long term situation and the recent deterioration caused by a reduction in the power supply. My Department monitors the situation in Gaza closely, including through regular contact with UNRWA and UNOCHA, the main UN agencies active there, as well as relevant Palestinian and Israeli NGOs, some of whom are supported in their work by Irish Aid. My colleague, Minister of State Joe Costello T.D., witnessed at first hand the very difficult conditions on the ground in Gaza during his recent visit to the occupied Palestinian territory to see the impact of Ireland's aid programme. He met directly with the UN Humanitarian Coordinator, Mr. James Rawley, and others.

While Israeli restrictions have eased marginally in recent years, the overall situation in Gaza has worsened in recent months as Egypt has taken action against smuggling into Gaza, in response to its own security concerns. The existing fuel shortfall and shortage of supply of building materials, accentuated by the closure of tunnels, is affecting the daily lives of residents, their electricity supply and water and sewage facilities. In addition, delivery of construction materials through the crossings from Israel, which had been gradually increased, was suspended again in October following the discovery of a reinforced tunnel dug into Israel from Gaza, with the apparent purpose of facilitating an attack into Israel, perhaps on the soldiers manning the border.

The power situation is a complex one. Both Israel and Egypt supply electricity to Gaza through the grid system, at commercial rates. In addition, the Gaza Power Plant supplied about one third of the total available power, using fuel supplied by the Palestinian Authority via Israel, and cheaper fuel smuggled in from Egypt. Both of these sources have been cut recently, partly because of a dispute in which Hamas has refused to pay for the fuel supplied to Gaza by the Palestinian Authority. The loss of one third of what was already a marginal power supply has led to increased outages, including to vital water and sewage facilities.

The loss of construction materials and of power has led to major lay-offs in the construction sector, one of Gaza's few large employers, and thus increased the level of food dependency, which is the principal cause of concern. More than 800,000 of the over 1.2 million Palestine refugees in Gaza receive food assistance from UNRWA, which also provides basic education, health, relief and social services.

Ireland has responded to the current crisis by providing additional funding of €500,000 to UNRWA to support the food assistance element of their Gaza Emergency Appeal. This brings Ireland's total contribution to UNRWA's appeals for Gaza to €4.64 million since 2006. UNRWA's food assistance provides a lifeline for thousands of refugee families in Gaza and helps to prevent a potentially large scale crisis in a context where an estimated 57% of households are classified as food insecure. This funding support is in addition to Ireland's broader programme of assistance to the Palestinian people and brings our total funding support to date in 2013 to €8.3 million. This includes support to UNRWA's general fund, the Palestinian Authority, the UN Office for the Coordination of Humanitarian Affairs and civil society organisations working to promote human rights and democratisation.

It is clear, however, that humanitarian aid can only seek to ameliorate the difficulties, which will persist until there is a solution at political level. Ireland has therefore continued to draw attention to the urgent need for an end to the overall blockade of Gaza. We have sought to maintain a focus on this issue, as have organisations such as Amnesty International in their recent report, despite the many other crises in the Middle East at present. We argue this position consistently in our regular contacts with the Israeli authorities, both in Israel and with the Embassy here in Dublin. I have raised the matter repeatedly at EU level, to push for the EU to do more to press Israel to end the blockade. I have made clear before my view that the international community is not doing enough on this issue. Ireland has also raised Gaza at multilateral level, including in recent weeks interventions at the UN General Assembly in New York and the Human Rights Council in Geneva.

In the case of Egypt, the sole crossing point at Rafah is not closed, although it is operating at a more restricted level, as a result of the turmoil in Egypt itself. The main impact has been from Egypt's effective action against the smuggling tunnels, which we cannot take issue with. However, the loss of the extra supplies formerly obtained through smuggling has highlighted the shortages caused by the overall Israeli blockade regime. Their interdiction now only underscores the urgent need for the opening to normal traffic of the main crossings from Israel. I have urged Egypt to allow the widest possible use of Rafah for normal commercial, human and humanitarian traffic.

Israel is entitled to take measures for the security of its people and borders from attacks which have come from Gaza over a number of years. Nevertheless, it is clear to me that some measures taken, and the overall regime enforced on Gaza, have a negative impact on the entire civilian population and cannot be justified by security needs. Whether a particular measure amounts to a prohibited act, such as collective punishment, under international humanitarian law is, however, ultimately a matter for legal determination.

Diplomatic Representation

Questions (30)

Brendan Smith

Question:

30. Deputy Brendan Smith asked the Tánaiste and Minister for Foreign Affairs and Trade the proposals he has to extend the embassy and consulate network; and if he will make a statement on the matter. [53218/13]

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Written answers

Ireland's diplomatic and consular network is comparatively modest in size and includes 56 Embassies, 7 multilateral Missions and 10 Consulates General and other offices. In addition to their country of primary accreditation, many Ambassadors are also accredited to additional countries on a non-resident basis which enhances the cost-effectiveness of our external representation. Our missions abroad work very closely with the state agencies in the promotion of exports, tourism and inward investment. They perform also a wide range of functions in support of Ireland's foreign policy interests. These include representing and advancing government policies with other states and in international organisations; economic and cultural promotion; frontline consular and passport services to citizens overseas; engaging with and supporting Irish communities and with programme management, particularly in Irish Aid priority countries.

The size and deployment of the State's network of missions abroad is kept under ongoing review and any possible reconfiguration would have regard to national priorities and available resources. Those priorities include the State's strategic economic and political interests, including trade and inward investment, support for Irish exporters, and the promotion of our values as regards human rights, international law and the peaceful settlement of disputes within and among states.

Departmental Websites

Questions (31)

Brendan Smith

Question:

31. Deputy Brendan Smith asked the Tánaiste and Minister for Foreign Affairs and Trade if he will indicate in tabular form any expenditure by his Department since January 2012 on the Department's website; the expenditure since January 2012 on any other websites related to his Department; and if he will make a statement on the matter. [53243/13]

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Written answers

My Department recently invested in upgrading our online services to the public for the first time since 2005. This essential upgrade of our ICT infrastructure allows my Department to support Irish citizens at home and abroad through a suite of bespoke services including the Passport Tracking Service and a Passport Application Guide. In addition, the Citizen Registration service allows Irish citizens travelling or living overseas to register their contact details with our Department. This service means we can contact citizens who are travelling abroad and provide assistance where possible in the event of an unforeseen crisis such as a natural disaster or civil unrest, or a family emergency. The website also has a database of international legal treaties to which Ireland is a signatory.

The Irish Aid website provides information on Ireland's overseas development programme and volunteering opportunities.

The contract to build the Department's websites encompasses a range of activities including website design and development, a Content Management System, annual support, licensing and training.

The Emigrant Support Programme's website is an on-line grant system for organisations which provide support for Irish communities abroad. The Global Irish Forum website provides information on the Global Irish Network and the Global Irish Economic Forum. During the Forum in October many of the sessions were live-streamed around the world.

The following table provides a breakdown of website expenditure in 2012 and 2013.

Website Costs

2012

2013

Development of Department's websites –Department of Foreign Affairs and Trade (including four custom built applications); Irish Aid and template for Embassy sites

222,231

63,261

DFAT and Embassy web domain renewals

4,130

5,167

Hosting Costs DFAT, Irish Aid & Embassy sites

38,250

42,957

Support and Maintenance D/FAT, Irish Aid and Embassy Sites

52,350

15,011

Emigrant Support Programme Grants

2,545

829

Global Irish Forum Website

121

3,189

Certificate of Irish Heritage Domain renewal

48

298

Total

€319,675

€130,712

Questions Nos. 32 to 35, inclusive, answered with Question No. 28.

EU Directives

Questions (36)

Anthony Lawlor

Question:

36. Deputy Anthony Lawlor asked the Tánaiste and Minister for Foreign Affairs and Trade the number of EU directives related to his Department that have yet to be transposed into Irish law despite the deadline date having passed; when it is proposed that these directives will be transposed; and if he will make a statement on the matter. [53353/13]

View answer

Written answers

No EU directive relating to the policy remit of the Department of Foreign Affairs and Trade is awaiting transposition into Irish law.

Money Laundering

Questions (37)

Kevin Humphreys

Question:

37. Deputy Kevin Humphreys asked the Minister for Finance if he will provide a list of the actions Ireland must take, whether through his Department, the Oireachtas or the Central Bank, to comply with the EU anti-money laundering directive; the body responsible for each measure; and if he will make a statement on the matter. [53155/13]

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Written answers

The proposed 4th EU Anti-Money Laundering Directive, currently being negotiated at the Council of the EU, will update and replace the 3rd EU Anti-Money Laundering Directive and reflect the views of Member States on the operation of the existing system. The Criminal Justice (Money Laundering and Terrorist Financing ) Act 2010 transposes the 3rd EU Anti-Money Laundering Directive into Irish Law. This Act provides for a number of competent authorities for the different classes of designated persons as set out in the Act. The Central Bank of Ireland is specified in the Act as the State competent authority for credit and financial institutions.

The Commission's proposal for a Directive inter alia:

- Extends existing provisions for casinos to all gambling;

- Reduces the transaction threshold at which traders in high value goods are required to identify customers from €15,000 to €7,500;

- Sets out a framework for minimum administrative sanctions to apply across Member States;

- Requires all companies to hold information on their beneficial owners;

- Clarifies the application of AML Rules to cross-border subsidiaries between home and host supervisors;

- Strengthens the powers of Financial Intelligence Units (receivers of suspicious transactions reports (STRs);

- Extends provisions applying to foreign Politically Exposed Persons (PEPs) to domestic PEPs on a risk-sensitive basis.

However, as negotiations are continuing on this directive at the Council of the EU, I am not in a position to confirm what actions Ireland will be required to take until final agreement on the package of measures in the Directive has been reached.

Tax Reliefs Eligibility

Questions (38)

Michael McCarthy

Question:

38. Deputy Michael McCarthy asked the Minister for Finance further to Parliamentary Question No. 73 of 17 October 2013, if the consultation process with the Department of Health in connection with this request has concluded and a decision been reached; and if he will make a statement on the matter. [53170/13]

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Written answers

As stated in my reply to the Deputy on 17 October 2013, in accordance with the consultation requirements of section 469 of the Taxes Consolidation Act 1997, officials from my Department commenced a consultation process with the Department of Health in connection with this request. The process may take up to twelve weeks to conclude and my officials will contact the Deputy once a decision has been reached.

Tax Code

Questions (39)

Seán Fleming

Question:

39. Deputy Sean Fleming asked the Minister for Finance if interest paid to persons in respect of the lump sum agreed with them by a State body following the acquisition of their land by compulsory purchase order for motorway purposes is subject to capital gains tax or income tax; and if he will make a statement on the matter. [53195/13]

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Written answers

I am informed by the Revenue Commissioners that compensation paid by an authority exercising its compulsory purchase powers to acquire land is consideration in the hands of the disponer of the lands. Any chargeable gain arising on such a disposal is subject to capital gains tax, calculated in accordance with the Capital Gains Tax Acts. Where, in addition to compensation for the acquisition of the land, interest is paid to the landowner, that interest is income for tax purposes. The interest is paid subject to deduction of tax at source at the standard rate of 20% by the authority by virtue of section 246(2) Taxes Consolidation Act 1997. The interest is taxable in the hands of the landowner under Case IV of Schedule D (with a credit given for the tax deducted at source) in the year in which it is paid by the authority.

If the taxpayer were only liable to income tax at the standard rate on his total income in the year in which the interest is paid, the income tax deducted by the authority would be his or her full liability on that interest. However, if the taxpayer's level of total income were to exceed the standard rate threshold for that year additional tax at the marginal rate of tax would be payable. Universal Social charge would also be payable on the taxpayer's income – details of the rates of income tax and universal social charge are available in Leaflet IT1 on the Revenue Commissioners website, www.revenue.ie.

Property Taxation Assessments

Questions (40)

Pearse Doherty

Question:

40. Deputy Pearse Doherty asked the Minister for Finance if he will provide clarification on a local property tax valuation received by a family (details supplied) in County Donegal; and if he will make a statement on the matter. [53207/13]

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Written answers

I am informed by Revenue that a key aspect of the work undertaken in regard to Local Property Tax (LPT) was the development of a comprehensive register of residential properties in the State. During the compiling of the Property Register matching difficulties were encountered when consolidating the various Government and non-Government data sources used, and as a consequence some properties were associated with persons on the basis of outdated address information. As part of its comprehensive LPT communications strategy, Revenue clearly stated that errors in the compilation of the Property Register were inevitable given the scale of the task and requested anybody who received incorrect information on their properties to contact the LPT Helpline immediately to have their records amended.

In the case raised by the Deputy, Revenue issued an LPT 1 Return for 2013 to an address previously used to correspond with the person in question in respect of other taxes. The person subsequently filed his 2013 LPT Return via the online system without using a Property ID and PIN and in doing so created a second property record. This resulted in the computer system incorrectly categorising the person as a multiple property owner for LPT purposes and assessing him on that basis for both 2013 and 2014.

Revenue has confirmed that the "duplicate" property has been removed from the Property Register and the address details of the person have been correctly updated. Revenue has made direct contact with the person to confirm his details and has also provided him with a new Property ID and PIN to facilitate future access to his LPT records.

Tax Reliefs Cost

Questions (41)

Richard Boyd Barrett

Question:

41. Deputy Richard Boyd Barrett asked the Minister for Finance if he will provide in tabular form the costs of tax and PRSI relief for private pension provision for the years 2006 to date in 2013. [53234/13]

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Written answers

The following tables provide a breakdown of the estimated cost of tax and PRSI reliefs relating to private pension contributions for 2006, 2007, 2008, 2009 and 2010, the latest year for which the most up-to-date data is available. Figures of the numbers availing of the tax reliefs are also provided, where available. Tax relief on employee or individual contributions is allowed at the taxpayer's marginal rate of tax subject to limits based on annual earnings and age. Figures have been rounded where appropriate. I am advised by the Revenue Commissioners that while corresponding updates of the figures are not yet available for the tax year 2011 the necessary work of assembling the basic data to enable this to be done is ongoing. No data is yet available for 2012 or 2013.

Finally, it should be borne in mind that the information imparted by the costing of tax and other reliefs in the pensions area is inherently limited. It may suggest a significant notional loss in terms of tax foregone as compared with the savings that might be expected if the tax relief was not available. However, where tax relief arrangements are of such significance, as in this instance, the removal of the reliefs would represent a fundamental adjustment to the current balance of the tax system and would have very significant implications in terms, among other things, of the economic and behavioural impacts which would ensue. These impacts would be difficult to model in advance. For these reasons, the real informational content of the costings of tax reliefs is limited and should be treated with some caution.

2006

Estimate of the cost of certain tax reliefs for private pension provision

Estimated costs

Numbers

-

€ million

-

Employees' Contributions to approved Superannuation Schemes

540

693,100

Employers' Contributions to approved Superannuation Schemes

120

363,100

Estimated cost of exemption of employers' contributions from employee BIK

510

363,100

Retirement Annuity Contracts (RACs)

435

125,900

Personal Retirement Savings Accounts (PRSAs)

55

45,200

Estimated cost of PRSI and Health Levy relief on employee contributions

220

Not available

2007

Estimate of the cost of certain tax reliefs for private pension provision

Estimated costs

Numbers

availing

-

€ million

-

Employees' Contributions to approved Superannuation Schemes

590

708,500

Employers' Contributions to approved Superannuation Schemes

150

364,700

Estimated cost of exemption of employers' contributions from employee BIK

540

364,700

Retirement Annuity Contracts (RACs)

408

121,300

Personal Retirement Savings Accounts (PRSAs)

61

46,600

Estimated cost of PRSI and Health Levy relief on employee contributions

240

Not available

2008

Estimate of the cost of certain tax reliefs for private pension provision

Estimated costs

Numbers

availing

-

€ million

-

Employees' Contributions to approved Superannuation Schemes

655

792,600

Employers' Contributions to approved Superannuation Schemes

165

362,700

Estimated cost of exemption of employers' contributions from employee BIK

595

362,700

Retirement Annuity Contracts (RACs)

353

116,000

Personal Retirement Savings Accounts (PRSAs)

74

53,900

Estimated cost of PRSI and Health Levy relief on employee contributions

255

Not available

2009

Estimate of the cost of certain tax reliefs for private pension provision

Estimated costs

Numbers

availing

-

€ million

-

Employees' Contributions to approved Superannuation Schemes

730

713,600

Employers' Contributions to approved Superannuation Schemes

155

342,200

Estimated cost of exemption of employers' contributions from employee BIK

560

342,200

Retirement Annuity Contracts (RACs)

237

101,300

Personal Retirement Savings Accounts (PRSAs)

77

56,200

Estimated cost of PRSI and Health Levy relief on employee contributions

230

Not available

2010

Estimate of the cost of certain tax reliefs for private pension provision

Estimated costs

Numbers

availing

-

€ million

-

Employees' Contributions to approved Superannuation Schemes

599

625,100

Employers' Contributions to approved Superannuation Schemes

141

302,900

Estimated cost of exemption of employers' contributions from employee BIK

515

302,900

Retirement Annuity Contracts (RACs)

180

82,200

Personal Retirement Savings Accounts (PRSAs)

73

52,300

Estimated cost of PRSI and Health Levy relief on employee contributions

231

Not available

Tax Reliefs Cost

Questions (42)

Richard Boyd Barrett

Question:

42. Deputy Richard Boyd Barrett asked the Minister for Finance if he will estimate the cost of tax and PRSI relief for approved retirement funds from 2006 to date in 2013. [53235/13]

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Written answers

Approved Retirement Funds (ARFs) form part of the regime of flexible options on retirement first introduced in 1999. ARFs are not pension schemes per se. They are investment options into which the proceeds of certain pension arrangements can be invested on retirement. Under the "ARF option", individuals are entitled to take their retirement lump sum and, with the balance of their pension fund, purchase an annuity, invest in an ARF or take the balance in cash subject to tax. Where the ARF route is chosen, beneficial ownership of the assets in the ARF vests in the individual.

Electing to invest in an ARF or to receive the balance of a pension fund in cash are subject to conditions. The conditions include the requirements that the individual be over 75 years of age or, if younger, that the individual has a guaranteed level of pension income ("specified income") actually in payment for life at the time the option is exercised. The Finance Act 2013 provided for a specified income limit of €12,700 per annum. This was a reduction from the limit provided for in Finance Act 2011 of 1.5 times the maximum annual rate of the State Pension (Contributory), which had been a limit of €18,000.

While any investment income or capital gains arising are exempt from tax while the funds are invested in the ARF, I should point out that sums withdrawn or deemed to be withdrawn from an ARF are subject to tax at the individual ARF-owner's marginal income tax rate. The 2006 Budget and Finance Act introduced an imputed or notional distribution of 3% of the value of the assets in an ARF on 31 December each year, which notional amount is taxed at the ARF owner's marginal income tax rate. This measure was introduced because the internal review of tax relief for pensions provision undertaken by the Department of Finance and the Revenue Commissioners in 2005 found that the ARF option was largely not being used, as intended, to fund an income stream in retirement but, in certain cases, was being used to build up substantial funds in a tax-free environment over the long-term. The imputed distribution measure is designed to encourage the use of ARFs, as intended, in the way of actual draw downs being made which are subject to tax.

The annual imputed distribution of ARF assets was increased from 3% to 5% in Budget and Finance Act 2011 in respect of asset values as at 31 December 2010 and future years. It was further increased from 5% to 6% for ARFs with asset values in excess of €2 million at 31 December 2012 and future years. I am informed by the Revenue Commissioners that, based on returns made by Qualifying Fund Managers, the yield from the taxation of the annual imputed distribution of ARF assets for the years 2007 to 2012 is as follows.

Yield from the taxation of the annual imputed distribution of ARF assets 2007 – 2012

Year

Yield (€ million)

2007 (earliest available)

2.75

2008

6.5

2009

7.9

2010

10.3

2011

11.6

2012

11.5

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