Clare Daly
Question:204. Deputy Clare Daly asked the Minister for Finance the amount his Department spends on an annual basis in payments to consultancy firms (details supplied). [2477/14]
View answerConsultancy Contracts Expenditure
Questions (204)
Written answers
The total amount paid to Oracle from my Departments' Vote in 2013 was €80,381.55. This is in respect of the usual annual support charges associated with software licenses and most of it is attributable to the Department's Financial Management System (JD Edwards, which is an Oracle product).
There were no payments to Accenture in 2013.
European Central Bank
Questions (205)
Clare Daly
Question:205. Deputy Clare Daly asked the Minister for Finance the reason he has not taken action under Articles 35:1 and 340 of ECB statutes and initiated the taking of a case to the ECJ seeking clarification of the legality of the ECB's actions in October-November 2010 in forcing Ireland to repay unsecured debts. [2486/14]
View answerWritten answers
I should state initially that Ireland has always honoured its debt obligations without any requirement that we be forced to do so, whether by the ECB or anyone else.
I have not taken action under Article 35:1 and Article 340 of the ECB Statutes and initiated proceedings at the Court of Justice of the European Union seeking clarification of the legality of the ECBs actions in relation to Ireland. Nor do I consider that the initiation of proceedings as suggested would be necessary. The Government maintains a close co-operative relationship with the ECB and the interests of the State are best served by dealing with the ECB in the context of that relationship. Of course this would not preclude the initiation of such proceedings in the event that same should become necessary because of a legally questionable action of the ECB.
Question No. 206 answered with Question No. 190.
Tax Credits
Questions (207)
Michael McGrath
Question:207. Deputy Michael McGrath asked the Minister for Finance if he will address an issue raised in correspondence (details supplied) regarding the one parent family tax credit. [2508/14]
View answerWritten answers
As you are aware the One-Parent Family Tax Credit (OPFTC) has been replaced with a new Single Person Child Carer Tax Credit from 1 January 2014. The restructured credit will be of the same value i.e. €1,650 per annum as the OPFTC and it will also carry the same entitlement to the additional €4,000 extended standard rate band, which increases it to €36,800 per annum, before liability to higher rate of income tax arises. However, the credit will be more targeted, in that it will in the first instance, only be available to the principal carer of the child.
The person who receives the child benefit payment is being used as the initial indicator by the Revenue Commissioners to identify the individuals who are most likely to qualify for the new credit. However, eligibility for the credit will in the first place be determined by who cares for the child for most of the year. In this instance, assuming that the mother cares for the child for the whole or greater part of the year, she would be designated as the primary carer. As she is married she would have no entitlement to either the old or the new credit. Although a single carer may relinquish the credit such that it can be claimed by a non-primary carer, in cases where the primary carer has no entitlement to the credit then it cannot be relinquished to the secondary carer.
However, a single father would be entitled to the credit in cases where the child resides with him for the whole or greater part of the year as he would be then be the primary carer of the child.
Question No. 208 answered with Question No. 190.
Company Law
Questions (209)
Luke 'Ming' Flanagan
Question:209. Deputy Luke 'Ming' Flanagan asked the Minister for Finance due to the reported value of debts in a company's accounts, if he will call for a full investigation by the Revenue Commissioners into the accounts of companies (details supplied) as a matter of urgency; and if he will make a statement on the matter. [2511/14]
View answerWritten answers
As the issue in question does not relate to taxation, this is not a matter for the Revenue Commissioners.
Tax Credits
Questions (210)
Michael Creed
Question:210. Deputy Michael Creed asked the Minister for Finance if he will clarify the situation regarding entitlement to the single parent tax credit where the couple have separated and the mother of the child has remarried and where custody and access are shared by virtue of legal agreement; if he will confirm that the father of the child who remains single is entitled to the credit; and if he will make a statement on the matter. [2522/14]
View answerWritten answers
As you are aware the One-Parent Family Tax Credit (OPFTC) has been replaced with a new Single Person Child Carer Tax Credit from 1 January 2014. The restructured credit will be of the same value i.e. €1,650 per annum as the OPFTC and it will also carry the same entitlement to the additional €4,000 extended standard rate band, which increases it to €36,800 per annum, before liability to higher rate of income tax arises. However, the credit will be more targeted, in that it will in the first instance, only be available to the principal carer of the child.
The person who receives the child benefit payment is being used as the initial indicator by the Revenue Commissioners to identify the individuals who are most likely to qualify for the new credit. However, eligibility for the credit will in the first place be determined by who cares for the child for most of the year. In the situation outlined above, assuming that the mother cares for the child for the whole or greater part of the year, she would be designated as the primary carer. As she is married she would have no entitlement to either the old or the new credit. Although a single carer may relinquish the credit such that it can be claimed by a non-primary carer, in cases where the primary carer has no entitlement to the credit then it cannot be relinquished to the secondary carer.
However, a single father would be entitled to the credit in cases where the child resides with him for the whole or greater part of the year, as he would be the primary carer in such a scenario, regardless of the marital status of the mother. In such circumstance, the single father would also be entitled to the child benefit payment.
Home Renovation Incentive Scheme Applications
Questions (211)
Derek Nolan
Question:211. Deputy Derek Nolan asked the Minister for Finance if there is a breakdown, by county, of the homeowners who have availed of the home renovation scheme tax break; and if he will make a statement on the matter. [2537/14]
View answerWritten answers
As the Deputy is aware, I announced the Home Renovation Incentive in the recent Budget. This scheme came into operation on 25 October 2013 and will run until 31 December 2015. The incentive provides tax relief for homeowners by way of a tax credit at 13.5% of qualifying expenditure incurred on repair, renovation or improvement work carried out on a principal private residence.
The scheme will be administered through Revenue's online systems. Contractors will be required to inform Revenue in advance of details of works to be carried out and will also be required to notify Revenue in relation to any payments received in respect of the works. Homeowners will be able to view the information provided to Revenue by the contractor through the Revenue electronic systems and will also claim the relief through those systems.
It is anticipated that this system will 'go live' in early April 2014. Contractors will need to enter the details of works carried out within 28 days of the electronic system becoming available. Until the system is live and details of works carried out are entered, there are no figures available on the incentive.
EU Budget Contribution
Questions (212)
Michael McGrath
Question:212. Deputy Michael McGrath asked the Minister for Finance the reason Ireland's 2013 EU budget contribution exceeded the budget day forecast by €300 million; and if he will make a statement on the matter. [2580/14]
View answerWritten answers
The final outturn for Ireland's contribution to the EU budget in 2013 totalled €1,726 million, some €271 million higher than was originally forecast for Budget 2013. Two externally driven developments, which were not known at the time of publication of Budget 2013, contributed to this bigger-than-expected contribution. Specifically, these were the upward revisions to Ireland's Gross National Income (GNI) and a number of EU amending budgets, which necessitated additional payments.
A number of factors are taken into account in calculating Ireland's overall EU budget contribution. The GNI element accounts for approximately two thirds of Ireland's overall payment. Accordingly, our contribution is sensitive to movements in this measure. The European Commission conducts an annual rebalancing exercise on the basis of revisions to national GNI levels. This can involve rebalancing payments each December, either to or from the EU budget, depending upon national GNI movements. This exercise takes into account new and updated GNI data published by the CSO in the annual National Income and Expenditure Bulletin. Last year this led to an increase in Ireland's contribution.
Separately, EU expenditure for 2013 was much higher than had been originally budgeted for and this required a number of amending budgets which were agreed during the year. These included a draft amending budget for an unprecedented additional €11.2 billion, two thirds of which was paid last year, with the balance to be paid this year. As, by their nature, these amending budgets are generally prepared in response to unforeseen events, they cannot be anticipated in advance.
Banking Sector
Questions (213)
Michael McGrath
Question:213. Deputy Michael McGrath asked the Minister for Finance his views on the early involvement of a strategic or capital market based investor for Permanent TSB as part of its long-term plan to return to market ownership. [2581/14]
View answerWritten answers
The potential involvement of a strategic or capital market based investor for Permanent TSB ("PTSB") will be considered at an appropriate time having regard to the best interests of the State. My officials and PTSB are in regular contact regarding matters such as capital structure and will consider all potential strategies in this regard.
In the meantime PTSB continues to work to enhance the value of our investment through the continued delivery of the restructuring plan, which will, if delivered, provide the State with more optionality regarding the future structure of PTSB. Key activities include a return to meaningful lending and material progress in resolving arrears in mortgages and commercial real estate.
EU Directives
Questions (214)
Michael McGrath
Question:214. Deputy Michael McGrath asked the Minister for Finance when he envisages the bank resolution and recovery directive coming into force; the way banks would be recapitalised prior to its implementation; and if he will make a statement on the matter. [2582/14]
View answerWritten answers
In late December 2013 the Lithuanian Presidency of the EU Council reached agreement with the European Parliament on the Bank Recovery and Resolution Directive (BRRD). The BRRD proposal provides a common framework of rules and powers to help EU countries manage arrangements to deal with failing banks at national level as well as cross-border banks, whilst preserving essential bank operations and minimising taxpayers' exposure to losses.
There are three pillars to the BRRD framework to facilitate a range of appropriate actions by authorities:
- Preparatory and preventative measures including reinforced supervision and robust recovery and resolution planning for major institutions;
- Early interventionmeasures which would include supervisory powers and implementing recovery plans;
- Resolution tools including appointing a special manager, sale of business, bridge bank, asset separation tools and the use of bail-in mechanisms.
Bail-in will enable resolution authorities to write down or convert into equity the claims of shareholders and creditors of institutions that are failing or likely to fail. This is an important means of ensuring that a bank's losses are absorbed by those who fund its activities and not taxpayers.
I welcome the introduction of this important piece of legislation which is designed to safeguard financial stability and to protect taxpayers funds. The legal text of the agreement is now being finalised by lawyer-linguists and it is expected to be adopted by the co-legislators in April but in any event no later than the end of the European Parliament's current term. Once the final legal text is published in the Official Journal, the rules will be transposed into national law over the course of 2014 and Member States will apply the BRRD from 1 January 2015. It should be noted however, that Member States have until 1 January 2016 to apply the bail-in provisions, although, they are not prevented from applying bail-in before this date.
In advance of this the ECB/EBA will complete a Comprehensive Assessment in 2014 in anticipation of the ECB taking over direct supervision of euro-area banks under the Single Supervisory Mechanism later this year. As you are aware the purpose of the Comprehensive Assessment is to ensure that banks are appropriately capitalised going forward. This is seen as an important exercise by the ECB, as they want a clean bill of health for the banking sector in advance of them taking control of supervision.
Irish banks were significantly recapitalised between 2009 and 2011. This was done in advance of the EBA capital exercises of 2011/2012, and a considerable strengthening of the banking sector took place. Irish Banks remain well capitalised today.
The Central Bank of Ireland has recently concluded a Balance Sheet Assessment (BSA) in advance of this year's Comprehensive Assessment and the Governor has informed me that there is no additional regulatory capital requirement in the banks as a result of this exercise.
As the Deputy will be aware the forthcoming ECB/EBA Comprehensive Assessment will use a minimum capital threshold of 8% Common Equity Tier 1 ratio and while I have not yet received the financial statements of the banks as of 31 December 2013, considering the strong capital positions of the banks as of June 2013, I would expect each of the banks to exceed the 8% Common Equity Tier 1 threshold.
However, in the unlikely event of a capital requirement arising from the Comprehensive Assessment private sources of capital could be accessed both internally as well as from the capital markets. As recent transactions have demonstrated the Banks now have access to both the debt and equity markets and coupled with the improved market conditions this is a realistic source of capital.
IBRC Bonds
Questions (215)
Thomas P. Broughan
Question:215. Deputy Thomas P. Broughan asked the Minister for Finance if the Department of the Environment, Community and Local Government has provided all required information to his Department on bonds held by local authorities with the Irish Bank Resolution Corporation; and if he will indicate the status of these bonds. [2588/14]
View answerWritten answers
I am advised that the Department of the Environment, Community and Local Government are currently working with the relevant local authorities to ascertain the actual level of exposure that exists in relation to the development bonds previously entered into by IBRC in favour of the various County Councils or local authorities.
I am advised that once that exposure is quantified the local authorities will submit a claim to the Special Liquidators in respect of the bonds. This information will be provided directly to the Special Liquidators in order to allow them to register that claim on the liquidation of IBRC. No information is outstanding to the Department of Finance in relation to this as I do not have a role in this matter.
Tax Code
Questions (216)
Noel Grealish
Question:216. Deputy Noel Grealish asked the Minister for Finance if there is a discrepancy in the Taxes Consolidation Act 1997 where section 97(2)(b) provides for a deduction in respect of any rate levied by a local authority which is used by the Revenue Commissioners as a reason to disallow the former non-principal private residence charge as a deduction from rental income, whereas section 97(2)(d) states that the cost of maintenance, repairs, insurance and management of the premises is allowed; if any update on the legislation affecting these two sections is planned or in the process of being addressed; and if he will make a statement on the matter. [2643/14]
View answerWritten answers
I am advised by the Revenue Commissioners that section 97(2) of the Taxes Consolidation Act 1997 specifies the expenses that a landlord is entitled to deduct from gross rent in computing rental profits for tax purposes.
Section 97(2) is subdivided into paragraphs (a) to (e), each of which deals with different categories of deductible expenditure. As noted by the Deputy, section 97(2)(b) allows for a deduction for any rate levied by a local authority, while section 97(2)(d) allows for a deduction for costs incurred in relation to the maintenance, repair, insurance and management of rental property. The remaining paragraphs, i.e. (a), (c) and (e), set out the additional categories of deductible expenditure.
As each paragraph in section 97(2) deals with a different category of deductible expenditure, I do not consider that there is a discrepancy between paragraphs (b) and (d) of the section.
As regards section 97(2)(b), I am advised by the Commissioners that, in their view, the non-principal private residence charge is neither a rate levied by a local authority nor a management expense. Accordingly, as it is not otherwise specified in section 97(2), it cannot be treated as a deductible expense.
I have no plans to amend the provisions referred to.
Tax Credits
Questions (217, 220)
Clare Daly
Question:217. Deputy Clare Daly asked the Minister for Finance if he will clarify comments made during discussion on the Finance Bill in relation to changes to the single parent credit to the effect that the higher band would be retained by single fathers, resulting in them losing the credit of €1,650 but not the credit of €840 associated with the higher band, whereas it has now emerged that they will in fact lose both amounting to a very serious cutback for this category of person; and the action he will take regarding same. [2701/14]
View answerClare Daly
Question:220. Deputy Clare Daly asked the Minister for Finance if he will clarify the statement made during discussions on the recent Finance Bill that the cuts to the single parent tax credit would not cost the full amount in the first year, as these changes seem to have come into effect immediately. [2806/14]
View answerWritten answers
I propose to take Questions Nos. 217 and 220 together.
It is unclear from the Deputy's questions as to the provenance of the comments and statements to which she refers. However, I will clarify the position as regards the new tax credit.
The One-Parent Family Tax Credit (OPFTC) has been replaced with a new Single Person Child Carer Tax Credit from 1 January 2014. The restructured credit will be of the same value i.e. €1,650 per annum as the one-parent family tax credit and it will also carry the same entitlement to the additional €4,000 extended standard rate band, which increases it to €36,800 per annum, before liability to higher rate of income tax arises. However, the credit will be more targeted, in that it will in the first instance, only be available to the principal carer of the child. It is only by being entitled to the credit that an individual can obtain access to the extended standard rate band.
Ultimately, the number of single fathers affected by this measure will depend on the family circumstances in each case. The person who receives the child benefit payment is being used as the initial indicator by the Revenue Commissioners to identify the individuals who are most likely to qualify for the new credit. However, eligibility for the credit will in the first place be determined by who cares for the child for most of the year. Agreement as to who will be the principal carer of a child is a matter for parents or guardians.
As a result of the Amendment which I brought forward at the Committee Stage of the Finance Bill, a primary carer may relinquish the credit such that it can be claimed by a non-primary carer.
To allow retention of the extended standard rate band by those who no longer qualify for the new tax credit, would ultimately only benefit such individuals with higher incomes, i.e. greater than €32,800 per annum.
It was always intended that the new credit would come into effect for the 2014 tax year and this was provided for in Finance Act (No. 2) 2013. Estimates of the expected yield from this measure in the initial year and in a full year were published in Budget 2014. These estimates were €18 million and €25 million respectively. The differences in the yields are generally as a result of the timing of tax returns.
Home Renovation Incentive Scheme Eligibility
Questions (218)
Niall Collins
Question:218. Deputy Niall Collins asked the Minister for Finance the tax relief exemptions available for a purpose (details supplied). [2743/14]
View answerWritten answers
As the Deputy is aware, I announced the Home Renovation Incentive in the recent Budget. This scheme came into operation on 25 October 2013 and will run until 31 December 2015. The incentive provides tax relief for homeowners by way of a tax credit at 13.5% of qualifying expenditure incurred on repair, renovation or improvement work carried out on a principal private residence.
Qualifying expenditure is expenditure subject to the 13.5% VAT rate. The work must cost a minimum of €5,000 (inclusive of VAT) which would attract a credit of €595. Where the cost of the work exceeds €30,000 (exclusive of VAT) a maximum credit of €4,050 will apply. The credit is payable over the two years following the year in which the work is carried out. Works carried out between 25 October 2013 and 31 December 2013 will be considered to have taken place in 2014 for the purposes of awarding the tax credit.
It is worth noting that the minimum threshold does not have to be reached by each contractor where a homeowner engages a number of contractors to carry out different works. So long as the aggregate payments reach the minimum threshold of €5,000 inclusive of VAT, the homeowner will qualify for relief.
Homeowners must be Local Property Tax compliant on all properties they own in order to qualify under the Incentive, while building contractors must be tax compliant in order to carry out works. The scheme will be administered through Revenue's online systems. Contractors will be required to inform Revenue in advance of details of works to be carried out and will also be required to notify Revenue in relation to any payments received in respect of the works. Homeowners will be able to view the information provided to Revenue by the contractor through the Revenue electronic systems and will also claim the relief through those systems.
The type of work covered includes extensions, garages, attic conversions, supply and fitting of kitchens, bathrooms and built in wardrobes, water treatment units, landscaping, driveways, window fitting, plumbing, tiling, rewiring and plastering. Items such as furniture, white goods and carpets are not covered as well as work which is subject to VAT at 23%.
Full details of the scheme are available at http://www.revenue.ie/en/tax/it/reliefs/hri/index.html along with a newly produced Guide for Homeowners. Copies of the Guide are being distributed to all local Revenue Offices and Citizens Advice centres.
NAMA Social Housing Provision
Questions (219)
Thomas P. Broughan
Question:219. Deputy Thomas P. Broughan asked the Minister for Finance if he will report on the way the special purpose vehicle established by the National Asset Management Agency has resulted in expediting the allocation of suitable units to social housing providers; and the number of units that have been transferred to approved housing bodies and local authorities since the NARPS was established. [2785/14]
View answerWritten answers
As the Deputy is aware, NAMA is working closely with the Department of the Environment, Community and Local Government (DECLG) and the Housing Agency, which has responsibility for the provision of social housing, to facilitate local authorities and approved housing bodies to purchase and lease properties for social housing. NAMA has, to date, identified almost 4,400 properties as being available and potentially suitable for social housing. Of these, demand has been confirmed for 2,055 properties and a further 13 are currently being evaluated.
As part of a number of measures to help streamline delivery of properties for which demand has been confirmed, including the agreement of standardised leasing terms, NAMA established a Special Purpose Vehicle, NAMA Asset Residential Property Services Limited ("NARPS"), to acquire residential units from its debtors and receivers and to lease them directly to approved housing bodies.
Since the conclusion of detailed negotiations with the DECLG, the Housing Agency, the Irish Council for Social Housing and approved housing bodies in relation to the long-term leasing model to be adopted by the new SPV, NARPS, a number of the approved housing bodies have moved quickly to ensure delivery of identified properties. To date, 60 properties have been acquired by NARPS and leased to approved housing bodies; a further 72 properties have been contracted for lease from NARPs by the approved housing bodies and are currently undergoing significant completion works to make them suitable for occupation later this year.
In total, to date 596 residential properties have been delivered or contracted for social housing use under this initiative. Over 20% of these have been delivered through NARPS. NAMA envisages that in the future the majority of properties delivered for social housing will be through the NARPS leasing model as, since the conclusion of negotiations with all stakeholders, this process has proven to be an effective method of delivery.
Question No. 220 answered with Question No. 217.
Tax Collection
Questions (221)
Jerry Buttimer
Question:221. Deputy Jerry Buttimer asked the Minister for Finance the number of taxpayers earning less than €30,000 per annum; the numbers of which are private or public sector workers; and if he will make a statement on the matter. [2818/14]
View answerWritten answers
I am informed by the Revenue Commissioners that the latest relevant sector-based information available on income earners in the tax system is derived from income tax returns filed for the income tax year 2011 and represents about 95 per cent of all returns expected at the time the data was compiled for analytical purposes. The data relating to the public sector includes individuals in receipt of various forms of income from public sources that would not normally be regarded as constituting employment within the public service, e.g. those receiving fees, those on State Boards etc. On the basis of the available tax-based data it is not possible to identify and exclude income from public sources to groups that would not normally be regarded as employed within the public service or to distinguish the earnings of employees associated with atypical work patterns.
On this basis, the total numbers of public sector income earners and private sector income earners, including self-employed earners, who had earnings of less than €30,000 in the tax year 2011 is 176,800 and 935,600 respectively. A married couple which has elected or has been deemed to have elected for joint assessment is counted as one tax unit.
Tax Credits
Questions (222)
Jerry Buttimer
Question:222. Deputy Jerry Buttimer asked the Minister for Finance the reason a person deemed to be self-employed as they work for their own limited company receives less of a tax credit than other employees of the same company; and if he will make a statement on the matter. [2819/14]
View answerWritten answers
I assume that the Deputy is referring to the disallowance of the employee tax credit (more commonly known as the PAYE tax credit) to a director who works for his or her own company.
Section 472 of the Taxes Consolidation Act 1997 provides for a tax credit known as the employee tax credit to an individual who has emoluments to which the PAYE system of tax deduction at source applies. However, the section prohibits the granting of this tax credit against the PAYE tax due on a director s emoluments from his or her own company where the director owns or controls, directly or indirectly, more than 15% of the ordinary share capital of the company. Such directors are deemed to be effectively self-employed notwithstanding that they are remunerated via the company payroll.