Tuesday, 18 Feb 2014

Written Answers Nos. 172 - 196

Departmental Staff Sick Leave

Questions (172)

Barry Cowen

Question:

172. Deputy Barry Cowen asked the Minister for Finance if he will provide in tabular form, the total number of uncertified sick days taken by employees in his Department and the average uncertified sick days per employee taken; the total certified sick days taken by employees; the average certified sick days per employee; the total sick days taken by employees; the average total sick days and median overall sick days per employee in 2009, 2010, 2011 and 2012. [7644/14]

Written answers

Minister for Finance

HR information from the Department of Finance is now provided through the HR Shared Services Centre PeoplePoint. My Department is experiencing some technical issues in attaining the required information to provide the Deputy with the material required. Officials are engaging with PeoplePoint staff on this issue and will revert to the Deputy within the next two weeks.

VAT Exemptions

Questions (173)

Kevin Humphreys

Question:

173. Deputy Kevin Humphreys asked the Minister for Finance if he will exempt flood gates for private homes from VAT to assist homeowners to protect their properties from flooding; if he will consider introducing a tax incentive scheme for private home owners to assist them in protecting their property from flooding with the construction or purchase of non-return valves, flood defences, renovations and flood barriers; and if he will make a statement on the matter. [7688/14]

Written answers

Minister for Finance

I am advised by the Revenue Commissioners that the VAT rating of goods and services is subject to the requirements of EU VAT law with which Irish VAT law must comply.  Section 46(1)(a) of the Value Added Tax Consolidation Act 2010 provides that VAT at the standard rate, currently 23%, is chargeable on goods and services that are not specified in the Schedules to the Act.  Flood gates are not specified in the Schedules.

A change in VAT rates must be in compliance with EU VAT law. The EU VAT Directive (Council Directive 2006/112/EC) generally provides that supplies of goods and services be chargeable to VAT at the standard rate but that lower rates are permitted in very limited circumstances.  Those circumstances do not extend to exempting flood gates from VAT.

However, homeowners may avail of the Home Renovation Incentive (HRI) in the carrying out of flood prevention works at their home, subject to compliance with the terms of the scheme. The HRI provides for 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 homeowner's only or main residence.

Qualifying expenditure 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 the credit.

Work must be carried out by a qualifying contractor. If work is grant aided or, if any form of insurance or compensation is received in respect of the work, the amount of relief will be reduced.  The incentive runs to the end of 2015.  However, where planning permission for qualifying works is required and is in place before 31 December 2015, any work carried out between 1 January 2016 and 31 March 2016 will qualify for the relief.

Qualifying expenditure under the incentive is expenditure which is subject to the 13.5% VAT rate.  Expenditure which is subject to the 23% standard VAT rate does not qualify for relief.  Building services consisting of construction, demolition, alteration or reconstruction are liable to VAT at the reduced rate of 13.5% unless the value of goods, such as flood gates, etc., exceeds two-thirds of the total amount charged by the contractor.  Where this happens, the contractor will charge VAT at the standard rate of 23% on the total amount and this total amount is excluded from relief under the incentive.  A contractor may be in a position to invoice separately for materials and labour and, in such circumstances, the labour amount, that is chargeable at 13.5%, can come within the HRI relief.  This practice is acceptable provided the split between materials and labour is realistic and is not done to avoid VAT.

Credit Unions Regulation

Questions (174)

Terence Flanagan

Question:

174. Deputy Terence Flanagan asked the Minister for Finance the reason for the delay in the Central Bank coming to agreement with a credit union (details supplied) regarding the building and value in use; when he expects that agreement to be reached which is stopping the credit union from having an annual general meeting; and if he will make a statement on the matter. [7750/14]

Written answers

Minister for Finance

The Registrar of Credit Unions at the Central Bank is responsible for the regulation of credit unions registered under the Credit Union Act, 1997 - as amended.

I have been informed by the Central Bank that it is subject to strict confidentiality requirements and cannot comment on individual credit unions.

Credit unions are required to hold an Annual General Meeting (AGM), in accordance with Section 78(2) of the  1997 Act, within four months of the end of the financial year.  In relation to the holding of an AGM, the Central Bank works closely with credit unions on a case by case basis to resolve any regulatory issues arising prior to the holding of an AGM.  Where members are seeking information regarding the proposed timing of their AGM, they should request this information from their individual credit unions.

Any actions taken by the Central Bank are taken in the interests of credit union members and the protection of their savings, in line with their statutory mandate.

Tax Code

Questions (175)

Brendan Griffin

Question:

175. Deputy Brendan Griffin asked the Minister for Finance the cost to the Exchequer of a 1%, 2% and 3% cut in the standard and higher rates of income tax; and if he will make a statement on the matter. [7756/14]

Written answers

Minister for Finance

I am informed by the Revenue Commissioners that the full year cost to the Exchequer, estimated by reference to 2014 incomes, of decreasing both standard rate and higher rates of income tax by 1, 2 and 3 percentage points would be approximately €671 million, €1,343 million and €2,014 million respectively.

These figures are estimated from the Revenue tax forecasting model using actual data for the year 2011 adjusted as necessary for income and employment trends in the interim. They are, therefore, provisional and likely to be revised.

Universal Social Charge Yield

Questions (176)

Brendan Griffin

Question:

176. Deputy Brendan Griffin asked the Minister for Finance the cost to the Exchequer of a 1%, 2%, 3%, 4% and 5% cut in the universal social charge; and if he will make a statement on the matter. [7757/14]

Written answers

Minister for Finance

I am informed by the Revenue Commissioners that the full year cost to the Exchequer, estimated by reference to 2014 incomes, of 1, 2, 3, 4 and 5 percentage point cuts in the Universal Social Charge (USC) would be of the order of €750 million, €1.5 billion, €2.1 billion, €2.6 billion and €3.1 billion respectively. This assumes the same percentage point cut applies to all three USC rates, until the rates reaches 0% in some cases. The estimated yields include corresponding rate decreases applied to the 10% rate of USC that applies to income from self employment exceeding €100,000 and also to those individuals for whom the 4% rate applies to all income over €10,036.

These 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. They are, therefore, provisional and likely to be revised.

Tax Code

Questions (177)

Brendan Griffin

Question:

177. Deputy Brendan Griffin asked the Minister for Finance the cost to the Exchequer of raising the threshold for entering the higher tax band for singles and couples by €1,000, €2,000, €3,000, €4,000 and €5,000; and if he will make a statement on the matter. [7758/14]

Written answers

Minister for Finance

I assume that the Deputy refers to an extension of the standard rate income tax band, which would apply similarly to single and widowed persons, as well as to lone parents. The proposed extension to the standard rate band is assumed to also apply to married couples and civil partnerships.  

On this basis, I am informed by the Revenue Commissioners that the full year cost to the Exchequer, estimated by reference to 2014 incomes, of increasing the standard rate tax band to €33,800, €34,800, €35,800, €36,800 and €37,800 while also maintaining the current monetary differences between the single persons standard rate tax band and the various other classes of standard rate tax bands would be of the order of €160 million, €310 million, €470 million, €630 million and €780 million respectively.

These figures are estimates from the Revenue tax forecasting model using latest actual data for the year 2011, adjusted as necessary for income and employment trends in the interim. They are, therefore, provisional and likely to be revised.

VAT Rate Increases

Questions (178)

Brendan Griffin

Question:

178. Deputy Brendan Griffin asked the Minister for Finance the expected increase in indirect taxes such as VAT from which the State will benefit as a result of every €1 million cut in income tax; and if he will make a statement on the matter. [7759/14]

Written answers

Minister for Finance

In analysing the economy and in producing economic forecasts, my Department models household disposable income in aggregate terms and projects how this income is allocated between spending and savings. The impact of these decisions on tax revenue and employment is also modelled.

When assessing the potential impact on the economy of such a measure, my Department must weigh the short-term benefits on economic output against the impact on the public finances. In this regard research produced by the ESRI as part of its Medium-Term Review of July 2013 is informative. Using the HERMES macroeconomic model, the ESRI tested the economic impact of a series of fiscal shocks to the economy. It includes simulations of the impact of a €1 billion adjustment in income tax.  

The results of the research suggest an income tax multiplier of -0.6 that is, a €1 billion reduction in income tax results in additional GDP of about €600m million over the forecast horizon.

The relatively low GDP multiplier likely reflects the open nature of Ireland's economy and the fact that increased demand would 'leak out' through imports. The simulations also include the assumption that some part of a reduced tax burden would be saved rather than spent by households. This positive impact on output must be balanced against the impact on the public finances exerted through lower tax revenues. In addition, the Revenue Commissioners estimated that 856,000 tax units which equates to just over 39% of the tax base will be exempt from income tax in 2014.  It is also worth pointing out that it is generally accepted that low income earners spend a greater proportion of their disposable income in the economy. Therefore, any cut in the income tax burden would have no effect on the spending habits of these tax units as they would not benefit from the change.   

When discussing the merits of such a measure it is important not to lose sight of the current fiscal position. Despite the considerable progress made in recent years, Ireland's budget deficit remains one of the highest in Europe. In this context the opportunity cost of any large-scale revenue stimulus would be considerable. Moreover, any revenue shortfalls would have to be made up from alternative measures in order to continue to meet our deficit targets.

In relation to the ESRI example, the simulations suggest that the deficit would increase by 0.5 percentage points of GDP and general government debt by just over 2 per cent of GDP, both by the end of the forecast horizon. Therefore, in relation, to the specific scenario put forward by the Deputy the increase in indirect taxes would not be sufficient to cover the loss in income tax revenue.

Finally I would say that while there is a clear need to address the fiscal imbalances of the State, this Government is cognisant of the pitfalls of excessively taxing labour. Reflecting this, the Programme for Government contained commitments to not increase the marginal rate of tax.  My first three Budgets have achieved these commitments, which further demonstrate our commitment to encouraging labour supply and supporting employment growth into the future.

Mortgage Arrears Proposals

Questions (179, 197, 235)

Brendan Griffin

Question:

179. Deputy Brendan Griffin asked the Minister for Finance his plans to prevent the sale of mortgages from foreign owned banks to unregulated operators; and if he will make a statement on the matter. [7760/14]

Michael Healy-Rae

Question:

197. Deputy Michael Healy-Rae asked the Minister for Finance the action he will take to amend the law to prevent unregulated vulture funds from acquiring mortgage portfolios from Irish banks; and if he will make a statement on the matter. [8058/14]

Michael McGrath

Question:

235. Deputy Michael McGrath asked the Minister for Finance if the Central Bank has contacted his Department expressing concern that some mortgage holders may lose the protections of certain statutory codes including the code of conduct on mortgage arrears if their mortgage is sold to an entity not regulated by the Central Bank of Ireland; his views on this issue; and if he will make a statement on the matter. [8287/14]

Written answers

Minister for Finance

I propose to take Questions Nos. 179, 197 and 235 together.

I have no plans to prevent the sale of loan books to unregulated entities, regardless of the location of the owners of such entities. This matter is legally complex as it could affect contracts already entered into. It needs careful consideration. For that reason, my officials are currently examining the issue with their colleagues in the Central Bank and in the Attorney General's office. In the meantime, I understand that a number of the purchasers of mortgage loan books are abiding by the Central Bank Code of Conduct on Mortgage Arrears on a voluntary basis.

European Banking Union

Questions (180)

Brendan Griffin

Question:

180. Deputy Brendan Griffin asked the Minister for Finance his plans regarding Irish legacy bank debt; if he will make Irish agreement on European banking union conditional on a deal on legacy debt; and if he will make a statement on the matter. [7761/14]

Written answers

Minister for Finance

The Euro-area Heads of State or Government (HoSG) agreed in June 2012 that "it is imperative to break the vicious circle between banks and sovereigns", and that when a Single Supervisory Mechanism, which forms part of an overall Banking Union proposal involving the ECB, is in place and operational, the European Stability Mechanism could recapitalise banks directly.

The Eurogroup meeting of 20th June 2013 agreed on the main features of the European Stability Mechanism's Direct Recapitalisation Instrument or DRI. There is a specific provision included in those main features, which states that "The potential retroactive application of the instrument should be decided on a case-by-case basis and by mutual agreement." Therefore, the agreement, that we were active in negotiating, keeps open the possibility to apply to the European Stability Mechanism for a retrospective direct recapitalisation of the Irish banks, should we wish to avail of it. The DRI will come into effect when the Single Supervisory Mechanism is in place and operational. This is not expected to take place until late 2014. 

The overall Banking Union proposal involves an integrated system for the supervision of cross-border banks in the form of the single supervisory mechanism ('SSM'); a European deposit insurance scheme ('DGS'); a European resolution scheme commonly referred to as the Bank Recovery & Resolution Directive (BRRD) and; a Single Resolution Mechanism (SRM) to coordinate the application of resolution tools to banks under the Banking Union.

As you are aware, one of the core objectives of Banking Union is to break the link between the sovereign and the banking sector by strengthening the banking system and making it more resilient. A key feature is the need to provide authorities with a credible set of tools to intervene sufficiently early and quickly in an unsound or failing bank so as to ensure the continuity of a bank's critical financial and economic functions whilst minimising the impact of a bank's failure on the economy and financial system, by requiring that shareholders bear losses first followed by creditors while at the same time minimising the costs for taxpayers.

Agreement on Banking Union is essential for Europe and we support the need to conclude the remaining elements namely the Single Resolution Mechanism as soon as possible. Finally, I can assure you that the Irish case for retrospective recapitalisation is made at all levels as appropriate.

I remain confident that the commitment made by the EU HoSG in June 2012 to break the vicious circle between banks and sovereigns will be respected.

VAT Rate Reductions

Questions (181)

Brendan Griffin

Question:

181. Deputy Brendan Griffin asked the Minister for Finance the estimated cost of reducing VAT on construction work to 9%; if he will consider this on a pilot basis as an economic stimulus; and if he will make a statement on the matter. [7770/14]

Written answers

Minister for Finance

EU VAT law, with which Irish VAT law must comply, does not in general allow the application of a reduced VAT rate on construction services. However, Ireland applies the 13.5% reduced rate of VAT to construction services under a derogation from the EU VAT Directive, because Ireland applied a reduced rate to such services on 1 January 1991. However, this derogation is only permissible where the VAT rate applying is 12% or greater. In this case, it is not legally possible to introduce a 9% rate of VAT on all construction services.

While it is possible for us to apply the 9% VAT rate to the construction of residential properties, this would involve having two separate VAT rates applying to construction services. This would be difficult to administer and could lead to underpayment of VAT. However, the home renovation incentive provides a tax incentive for property owners in the area of income tax. This incentive, which came into operation on 25 October 2013 and will run until 31 December 2015, 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.

With regard to the cost of reducing the VAT rate on construction services, given the options for reducing the VAT rate, estimating a costing would not be appropriate as the Revenue Commissioners statistics are not compiled in such a way as to provide a suitable basis to accurately estimate the impact on the Exchequer from the change mentioned in the question.

National Monuments

Questions (182)

Maureen O'Sullivan

Question:

182. Deputy Maureen O'Sullivan asked the Minister for Finance further to Parliamentary Question No. 48 of 6 February 2014, the person who will receive the public money now being set aside for the restoration of the national monument at Moore Street. [7773/14]

Written answers

Minister for Finance

I am advised by NAMA that any funds advanced in respect of the identified property will be applied towards specified building and remediation works by the owner of the property who will ensure the completion of the necessary works.   As set out previously, NAMA has approved funding for the completion of specified works relating to properties at 14-17 Moore Street in accordance with the Ministerial Consent of 16th July 2013 and subject to compliance with all statutory processes.

Pensions Levy

Questions (183)

Stephen Donnelly

Question:

183. Deputy Stephen S. Donnelly asked the Minister for Finance if he will provide exact details of the amount, in monetary terms, of the €1.452 billion pension levy collected to date that has been used for job initiatives; if he will detail each of these initiatives and indicate exactly the number of full-time, paid jobs which were created as a direct result of these initiatives. [7779/14]

Written answers

Minister for Finance

A stamp duty levy on pension fund assets was introduced in the Finance (No.2) Act 2011 as a measure to fund the Jobs Initiative.  This was estimated to yield €470 million a year for 4 years. The Revenue Commissioners have advised me that receipts amounted to €463 million in 2011 and €483 million in 2012. This is broadly in line with the amounts anticipated to be collected in those years.  €535 million was collected in 2013, due to an increase in the capital value of pension funds.

The Jobs Initiative announced in 2011 included a range of revenue and expenditure measures to support the protection of existing jobs and the creation of new ones. It provided for the reduction of VAT on tourism services to 9% from 13.5% on a temporary basis until the end of 2013.

The Deputy will be aware that I announced in Budget 2014 the continuation of the 9% VAT rate for the tourism and hospitality sector. The decision to retain the 9% VAT rate for tourism services will help maintain the momentum created by the success of The Gathering last year.  The estimated cost to the Exchequer of this measure is €350 million in a full year and €120 million for 2011 when it was introduced. This gives an estimated cost to the Exchequer of €820 million to end 2013.

A policy paper, published with the November 2012 Medium Term Fiscal Statement, found that the 9% reduced VAT rate appeared to have the desired impact both in terms of price pass through and by contributing to employment gains, with an additional 3,000 jobs in quarter 1 2012 relative to quarter 2 2011 in the labour intensive food and accommodations services sector of the economy. Further to this, the CSO website shows a 13% increase in employment from June 2011 to June 2013 in the food and accommodations services sector.

The Jobs Initiative also included a number of current and capital expenditure measures, including a number aimed at retraining the workforce. While the details of the expenditure on these measures are a matter for my colleague the Minister for Public Expenditure and Reform, Brendan Howlin T.D., I have been advised of the expenditure on a number of measures introduced under the Jobs Initiative.

The JobBridge scheme has exceeded the 5000 places originally set out in the Jobs Initiative programme. Due to demand for places, extra funding was provided to the JobBridge scheme, with funding for a weekly average of 6,740 places in 2014. As of late 2013, the total number of internships taken up under JobBridge, the National Internship Scheme, had passed 20,000. Indecon Economic Consultants undertook an evaluation of the JobBridge scheme in 2012 (published in April 2013) and their report found that 61.4% of the JobBridge survey respondents were in employment within 5 months of finishing their internships.

While the expenditure figures for JobBridge during 2013 have not yet been finalised, the table indicates the expenditure allocation to this measure under the 2013 Revised Estimates Volume (REV).

Expenditure Breakdown on JobBridge	2012 Provisional Outturn	2013 REV	2014 REV
-	€000	€000	€000
National Internship Scheme - JobBridge	€54,739	€81,760	€82,250
-	-	-	-
Numbers on the Scheme (weekly average on scheme)	2012 Provisional Outturn	2013 REV	2014 REV
National Internship Scheme - JobBridge	4,435	6,590	6,740

The numbers represented are the weekly average numbers on the scheme, not the year-end numbers. At year-end 2012, there were 5,532 on the JobBridge scheme and at year-end 2013 there were c. 6,000 on the scheme.

In terms of measures in the education sector, the Springboard scheme as announced in the Jobs Initiative had initially provided for 5,900 places. During 2011 and 2012, over 10,000 people enrolled on programmes under the Springboard scheme.  The scheme was extended further in 2013 with 6,000 places under the third Springboard allocation. Further roll-outs of the Springboard scheme have been considered and it is expected that further places will be provided under Springboard 2014. There are also education measures introduced under the headings of Back to Education Initiative and Specific skills training along with funding for Post Leaving Certificate courses. All these measures were aimed at retraining and educating the workforce to improve employability. Overall, in the region of €270 million was spent in the 2011 to 2013 period on education measures.

The Jobs Initiative also contained PRSI measures. These measures have helped improve competitiveness in terms of Labour costs, thereby protecting exists jobs and promoting new employment. It is hard to quantify the true cost of these measures to the Exchequer, but the original estimate of these measures for 2011 to 2013 was in the region of €500 million.

Overall, in the region of €1.7 billion has been spent on measures introduced under the Jobs Initiative from 2011 to 2013. The difference between this expenditure and the amount collected under the pension fund levy has been made up by contributions from the national training fund and from allocations from within existing Departmental expenditure ceilings.

Financial Institutions Levy

Questions (184)

Michael McGrath

Question:

184. Deputy Michael McGrath asked the Minister for Finance his views that the bank levy is anti-competitive; his views on the way the levy will impact on the ability to attract new entrants to the Irish banking market; and if he will make a statement on the matter. [7782/14]

Written answers

Minister for Finance

The Financial Institutions Levy announced as part of Budget 2014 is a revenue raising measure which allows for a contribution from the banking sector to Ireland's economic recovery. The levy will be in place for three years with an anticipated annual yield of €150 million. As the levy is a percentage of an institutions DIRT liability in 2011, liability to the levy will relate to the size of an institutions Irish operation. The size of the levy is not unreasonable and should not jeopardise the banks competitive or liquidity position.

The entire banking system has been underpinned by the strong Government support provided both here and abroad. I believe it is appropriate that the banking sector should make a contribution to the State's economic recovery.

As liability to the levy relates to DIRT payments in 2011, the levy should not impact on new entrants to the Irish banking market unless such new entrants take over the deposit taking business of a financial institution which had relevant DIRT payments in 2011. 

Banking Sector Regulation

Questions (185)

Pearse Doherty

Question:

185. Deputy Pearse Doherty asked the Minister for Finance his views on whether the accounting policy (details supplied) is consistent with his assurances that banks do not systemically overvalue assets in their published accounts; and if he will make a statement on the matter. [7786/14]

Written answers

Minister for Finance

As the Deputy is aware,  the rules relating to the correct valuation of assets are determined by the relevant accounting standards and I have alluded to this in my reply to a previous Parliamentary Question on 28th January. These rules apply to all categories of assets, including assets classified as held for sale. The Deputy will also be aware that it is the responsibility of the Board of Directors of a company to ensure that these rules are properly applied and that this is subject to an annual independent external audit review.

Nothing has been brought to my attention to suggest that these rules have not been applied correctly in relation to banks. Accordingly I can confirm that the accounting policy extract supplied by the Deputy is not inconsistent with my previous comments that I did not accept the premise that the Irish banks have systematically overvalued loans in their published accounts.

Banking Sector Regulation

Questions (186)

Pearse Doherty

Question:

186. Deputy Pearse Doherty asked the Minister for Finance if the Central Bank has ever investigated any bank in the State for hiding losses in its accounts; and if he will make a statement on the matter. [7789/14]

Written answers

Minister for Finance

I have been advised by the Central Bank that the Bank is not in a position to provide me with a response to this question. However, if the Deputy can provide more specific details on the nature of his query, I will revert to the Bank for a reply.

Tax Rebates

Questions (187)

Brendan Griffin

Question:

187. Deputy Brendan Griffin asked the Minister for Finance the rebate available to persons with disabilities for expenditure on essential home adaptations, fuel, transportation, equipment and other related expenses; and if he will make a statement on the matter. [7807/14]

Written answers

Minister for Finance

I am advised by the Revenue Commissioners that Income Tax relief and/or refunds of VAT/VRT/mineral oil tax may be available depending on a number of factors including the nature of the person's disability and the medical equipment the person requires.  There are a range of differing rules and conditions to be satisfied, depending on the scheme.  Information is available on the Revenue Commissioners website (www.revenue.ie).

In general, a person with a disability may be entitled to Income Tax relief under section 469 of the Taxes Consolidation Act 1997 in respect of qualifying expenses incurred on the supply, maintenance or repair of any medical, surgical, dental or nursing appliance used on the advice of a practitioner and on transport by ambulance.  In addition, the Home Renovation Incentive (HRI), that provides for an income tax credit for homeowners who carry out repair, renovation or improvement work on their only or main residence, may also be available for home adaptations on qualifying work costing between €5,000 (inclusive of VAT) and €30,000 (exclusive of VAT). 

There is provision for the refund of VAT incurred on qualifying goods for the exclusive use of disabled persons in the Value Added Tax (Refund of Tax) (No. 15) Order 1981.  The order specifies the degree of disability and defines the qualifying goods as goods which are aids or appliances, including parts and accessories, specially constructed or adapted for use by a disabled person.  The Order extends to works carried out on homes to adapt them to make them more accessible for disabled persons. 

In addition, Section 134(3) of the Finance Act 1992 (as amended) and Statutory Instrument Number 353 of 1994 (Disabled Drivers and Disabled Passengers (Tax Concessions) Regulations, 1994 (as amended) provide for relief from the payment of specified maximum amounts of VAT and VRT for persons registered under the scheme. They provide also for a refund of mineral oil tax, subject to specified maximum amounts per annum, in respect of fuel used in a vehicle which qualifies under the Scheme and is used for the transport of the person(s) with the disability.

Section 10B of the Finance (Local Property Tax) Act provides that an exemption from the charge to LPT may apply to a residential property purchased, built or adapted to make it suitable for occupation by a permanently and totally incapacitated individual as their sole or main residence, where an award has been made by the Personal Injuries Assessment Board or a court, or where a trust has been established, specifically for the benefit of such individuals. 

Where an exemption cannot be claimed under section 10B of the Act, an incapacitated person may in certain circumstances qualify for a reduction in the market value of their property. Section 15A of the Act provides for a reduction in the market value of a residential property that has been adapted for occupation by a disabled person where the adaptation has been grant-aided or approved for grant aid, by a local authority.  Full Details are available on www.revenue.ie.

NAMA Operations

Questions (188)

Michelle Mulherin

Question:

188. Deputy Michelle Mulherin asked the Minister for Finance the precedent for the National Asset Management Agency to sell properties and other assets by a bidding process whereby a bid which stipulates an offer as a percentage higher than the offer of the highest bidder is preferred; if this is an acceptable way of bidding; and if he will make a statement on the matter. [7821/14]

Written answers

Minister for Finance

I am advised that, the situation described in the question has not occurred in the sales process to date. In all cases, NAMA's sales strategy is informed by the objective of achieving the best possible outcome for the taxpayer and the best mechanism to achieve that is through openly marketing the asset.

NAMA Operations

Questions (189)

Michelle Mulherin

Question:

189. Deputy Michelle Mulherin asked the Minister for Finance the priority that is given by the National Asset Management Agency to the retention of jobs as a consideration in the sale of businesses as a going concern or other assets; and if he will make a statement on the matter. [7825/14]

Written answers

Minister for Finance

NAMA is obliged by Section 10 of the NAMA Act to obtain the best achievable return. However, NAMA attaches a very high priority to the preservation of jobs in any businesses that have loans with the Agency.  As evidence of this, NAMA, through the deployment of working capital, is directly supporting 15,000 jobs in Ireland in trading businesses linked to its loans.  The sectors involved include property, hotel and leisure, retail, health care, manufacturing and agriculture.

NAMA Operations

Questions (190)

Michelle Mulherin

Question:

190. Deputy Michelle Mulherin asked the Minister for Finance the steps and the standard operating procedures which are undertaken by the National Asset Management Agency from the acquisition of assets right through to their disposal; and if he will make a statement on the matter. [7826/14]

Written answers

Minister for Finance

The acquisition of loans from financial institutions is governed by the NAMA Act 2009 and EU Commission approval. NAMA deploys a complex and highly sophisticated set of operating procedures from the initial acquisition of loans through to the disposal of the loans or the disposal of the property and other assets securing the loans.  I am advised by NAMA that these procedures are outlined in considerable detail in a series of NAMA annual reports, beginning with its 2010 Report.  The Deputy may wish to refer, in particular, to pages 16-23 of the NAMA 2010 Annual Report, pages 23-31 of the NAMA 2011 Annual Report and pages 23-32 of the NAMA 2012 Annual Report.  NAMA's annual reports are available on its website, www.nama.ie.

Banking Sector Staff

Questions (191)

Michael Lowry

Question:

191. Deputy Michael Lowry asked the Minister for Finance if his attention has been drawn to the concerns of Ulster Bank employees here as a result of the RBS review that is currently underway; if his attention has been drawn to the concerns that this review could lead to the loss of upwards of 1,000 jobs; if his attention has been drawn to the impact this further loss of staff would have on customer service and the general public, if he will confirm the actions being taken to engage with RBS executives in Edinburgh and the British Government to ensure that these concerns are abated; the responses received from each; and if he will make a statement on the matter. [7831/14]

Written answers

Minister for Finance

The Deputy may be aware that, following the review by the UK Treasury in Autumn 2013, RBS reaffirmed its commitment to the Irish market. RBS is currently reviewing the operations of Ulster Bank in Ireland with a view to creating a sustainable business model. My Department has engaged with the UK Treasury as part of the Treasury review and I also recently met with senior RBS executives regarding the outlook for the bank both here and in the UK.

Recently, a number of individual Ulster Bank employees and their representative organisation contacted my Department in relation to their concerns that the RBS review could lead to job losses in Ireland. I fully understand and appreciate the concerns of Ulster Bank employees but I must await the findings of the review before commenting further.

Tax Credits

Questions (192)

Joanna Tuffy

Question:

192. Deputy Joanna Tuffy asked the Minister for Finance the reason a person (details supplied) who lost their one parent family tax credit, changed tax bands as a result of the loss of this tax credit; and if he will make a statement on the matter. [7874/14]

Written answers

Minister for Finance

The new Single Person Child Carer Credit (SPCCC) is of the same value i.e. €1,650 per annum as the one-parent family tax credit and it also carries the same entitlement to the additional €4,000 extended standard rate band, which increases it to €36,800 per annum, before liability to the higher rate of income tax arises. However, the credit is more targeted, in that it is in the first instance, only available to the principal carer of the child. A system that allows multiple claims in respect of the same child or children is unsustainable. The change follows a recommendation from the Commission on Taxation that the credit should be retained but that it should be allocated to the principal carer only.

I am advised by the Revenue Commissioners that where Revenue had enough information, the new credit was given automatically and included in Tax Credit Certificates issued.  Where Revenue did not have such information the tax credit was not given.  The Revenue Commissioners placed advertisements in the national newspapers on January 6th and 7th to specifically bring this to the attention of affected taxpayers; who were advised to apply for the credit if they felt they were entitled to it.

As the person in question does not appear to be the primary claimant, the tax credit of €1,650 was removed from him and his standard rate band was reduced to the single persons level of €32,800.  If a primary claimant gives up the credit in favour of a secondary claimant, then the secondary claimant may claim the credit provided they satisfy the relevant qualifying criteria. The qualifying criteria are:

- the individual must not be married (unless separated), in a civil partnership (unless separated) or cohabiting;

- the individual must not be jointly assessed as a married person or civil partner or in receipt of the basic personal tax credit for a widowed person or a surviving civil partner; and

- the qualifying child must reside with the secondary claimant for at least 100 days on aggregate in the year.

In order to consider a claim from a secondary claimant, a completed form SPCC1 and signed declaration from the primary claimant is required. This will relinquish the primary claimant's claim to the tax credit and name the individual as the "secondary carer".  If the secondary claimant satisfies all the criteria he/she should then complete a form SPCC2 and forward both completed forms to his/her local tax office.  Following receipt of the completed forms, SPCC1 and SPCC2, the individual's claim to the Single Person Child Care Credit will be considered. 

In relation to the position regarding tax credits in respect of the person whom the Deputy has provided details, I am advised by the Revenue Commissioners that this credit has not yet been claimed by the taxpayer concerned.  If the taxpayer wishes to make a claim the forms SPCC1 and SPCC2 should be sent to his local tax office which is the South County District, Plaza Complex, Belgard Road, Tallaght, Dublin 24.

Tax Credits

Questions (193)

Joanna Tuffy

Question:

193. Deputy Joanna Tuffy asked the Minister for Finance if parents who have joint custody of their children can share the single person child carer tax credit; and if he will make a statement on the matter. [7875/14]

Written answers

Minister for Finance

The new Single Person Child Carer Credit is of the same value as the one-parent family tax credit which it has replaced. However, the credit is more targeted in that it is, in the first instance, only available to the principal carer of the child. A system that allows multiple claims in respect of the same child or children is unsustainable. The change follows a recommendation from the Commission on Taxation that the credit should be retained but that it should be allocated to the principal carer only.

The Single Person Child Carer Credit is initially granted to the principal carer. This is usually the parent who receives the child benefit in respect of the child from the Department of Social Protection. Child benefit is only paid to one parent, even in cases where child care responsibilities are equally shared. Therefore, the extension of such practice to this tax credit is logical.

Notwithstanding the above, a principal carer can relinquish the new credit and associated extended standard rate band, such that it can be claimed by a secondary claimant provided certain conditions are met.

It would not be feasible to split the credit, within a tax year, between carers in a way that would take account of the many different caring scenarios in existence. There is no one size fits all solution that could be employed and the tax code cannot be constructed in such a way as to cater for every possible scenario. However, given the provisions that allow the credit to be relinquished, it is possible for a separated couple to agree that each party can claim the credit in alternate years provided the qualifying conditions are met.

Security Checks

Questions (194)

Noel Harrington

Question:

194. Deputy Noel Harrington asked the Minister for Finance if any of his departmental or ministerial offices have been swept for electronic or any other type of surveillance or bugging equipment since coming to office in March 2011; the reasons for this check; the results of this check; and if he will make a statement on the matter. [7893/14]

Written answers

Minister for Finance

My Department is aware of the importance of maintaining security given the commercially sensitive meetings held in the Department and the sensitive information held by the Department.  In the interests of security, key offices and meeting rooms within my Department have been swept for monitoring devices from time to time.  No concerns have been raised on the basis of these sweeps.

Departmental Bodies Establishment

Questions (195)

Seán Fleming

Question:

195. Deputy Sean Fleming asked the Minister for Finance if he will list any new organisations-agencies established in his Department since 9 March 2011; the role and functions and the annual operating budget for these organisations-agencies; and if he will make a statement on the matter. [7944/14]

Written answers

Minister for Finance

The information requested by the Deputy is contained in the following table:

Details of bodies established since 9 th March 2011

Name  of  Body	Date Established if after 9 march 2011	Allocated Budget 2013 - €	Role and functions
Credit Union Restructuring Board (ReBo)	1 January 2013	€1.5 million of which €750,000 was drawn down	The role of ReBo is to facilitate and oversee the restructuring of credit unions on a voluntary, incentivised and time-bound basis and in accordance with the Credit Union and Co-operation with Overseas Regulators Act 2012.
Irish Fiscal Advisory Council*	7 July 2011	€816,000	The Irish Fiscal Advisory Council is an independent statutory body whose purpose is to provide an independent assessment of official budgetary forecasts and proposed fiscal policy objectives.
New Economy and Recovery Authority (NewERA)	In September 2011 the Government announced the establishment of the New Economy and Recovery Authority (NewERA), initially on a non-statutory basis, within the National Treasury Management Agency (NTMA). Legislation to put NewERA on a statutory footing is expected to be enacted in 2014.	NewERA is a business unit within the NTMA. Costs incurred by the NTMA in performing NewERA's functions are part of the NTMA's overall operating costs.	The core role of NewERA involves the oversight of the financial performance, corporate strategy and capital and investment plans of the five commercial semi-state companies within its remit - ESB, Bord Gáis Eireann, EirGrid, Bord na Móna and Coillte - and working with stakeholders to develop and structure proposals for investment in energy, broadband and water to support economic activity. NewERA's role also involves, where requested by Govt, advising on the disposal or restructuring of State assets.

* In 2013, while the Fiscal Council were allocated €816,000, the Fiscal Council only received a total of €499,939 covering both pay (€244,861) and non-pay (€255,078) related expenditure.

Mortgage Arrears Proposals

Questions (196, 236)

Michael McGrath

Question:

196. Deputy Michael McGrath asked the Minister for Finance if he will provide information on the Central Bank guidance or rules governing the split mortgage sustainable solution to a mortgage arrears problem; and if he will make a statement on the matter. [8037/14]

Michael McGrath

Question:

236. Deputy Michael McGrath asked the Minister for Finance based on the latest information available to his Department, if he will confirm, for each bank separately, the number of split mortgage arrangements currently in place between banks and mortgage holders; the total amount of mortgage debt that has been warehoused under the arrangement; and if he will make a statement on the matter. [8288/14]

Written answers

Minister for Finance

I propose to take Questions Nos. 196 and 236 together.

The Central Bank has informed me that in 2013, it shared its internal guidelines ("the Guidelines") on Sustainable Mortgage Solutions with the banks.  These have also been published on the Central Bank's website, see (http://www.centralbank.ie/regulation/industry-sectors/credit-institutions/Documents/Internal%20Guideline%20-%20Sustainable%20Mortgage%20Arrears%20Solutions.pdf).   The Guidelines, which are subject to change, do not impose formal requirements on the banks.  However, they do provide insights into how the Central Bank will judge the sustainability of solutions being offered by the banks.  These Guidelines operate in conjunction with the principles set out in the Central Bank's Mortgage Arrears Targets (MART) paper. 

The Central Bank has also advised me that central to determining the sustainability of any mortgage restructuring solution is assessing borrower's current and future affordability. The solution offered to the borrower must take into account their individual circumstances, and comply with the policies and procedures of that institution, as well as the consumer protection framework including the Consumer Protection Code and the Code of Conduct on Mortgage Arrears ('CCMA'). 

Specifically with regard to spilt mortgages, Section 2.5 of the Guidelines outlines the Central Bank's views on the key characteristics the Central Bank would expect to see in a split mortgage, and focusing on:

- Treatment of the base loan of a split mortgage;

- Treatment of future increase of income; and

- Treatment of term of warehoused part of split mortgage. 

The Central Bank's MART audits examine the banks' processes of determining and proposing sustainable solutions against the Central Bank's sustainability guidelines. 

The Deputy may also wish to note that my Department has requested the six main banks operating in Ireland, and who fall within the Central Bank Mortgage Arrears Resolution Targets (MART) process, to provide data on the restructuring situation in relation to all primary dwelling mortgages, both in arrears and not in arrears, on a monthly basis.  This process is separate from the Central Bank quarterly data collection and publication process and is intended to provide certain data on the level of mortgage restructures on a more timely basis.  It should be noted that these are voluntary and unaudited returns by the relevant banks, and given the short timeframe in which the lenders provide this information to my Department and more frequent reporting requirements, they have not gone through the lender's quality control process for regulatory return purposes.  However, it is considered to be a desirable development to place more timely and frequent mortgage restructuring data into the public domain. 

The latest mortgage arrears and restructures data published by my Department for the period ending December 2013 shows that the lenders have 6,239 split mortgages for principal dwelling houses in place.  My Department publishes the number of split mortgages in aggregate format and not on an individual bank basis and does not collect data on the amount of mortgage debt warehoused as requested by the Deputy.

Early and effective engagement between borrowers and lenders is key to resolving cases of mortgage difficulty.  Where there is effective and meaningful engagement regarding a mortgage difficulty, the data shows that an increasing number of durable long term mortgage restructures is being put in place.