Written Answers Nos. 54-60
54. Deputy Michael McGrath asked the Minister for Finance if he will set out in tabular form the tax expenditure related to private medical insurance for each year from 2005 to 2013; the projected cost in 2014; and if he will make a statement on the matter. [11123/14]
View answerI am informed by the Revenue Commissioners that the cost to the Exchequer of tax relief allowed through the tax relief at source (TRS) system for medical insurance premia from 2005 to 2013 and the estimated cost for 2014 are set out in the table below.
The figures in the second column do not include costs to the Exchequer of age-related tax relief at source, which was established by the Health Insurance (Miscellaneous Provisions) Act 2009. Those costs are shown separately in the third column of the table. The cost of the age-related tax credit for years 2009 to 2012 inclusive is offset by a stamp duty on health insurance policies. The age-related tax credit and stamp duty were part of an interim scheme of risk equalisation, which was introduced in order to provide direct support to community rating in the private health insurance market and is intended to be revenue neutral over its duration. This interim scheme expired on 31 December 2012 and was replaced from 1 January 2013 by a permanent risk equalisation scheme, provided for in the Health Insurance (Amendment) Act 2012. Risk equalisation credits are not given through the tax system effective from 1 January 2013.
The estimated cost for 2014 includes the approximated saving from the reduction in relief announced in Budget 2014.
|
Tax Year |
Estimated Cost €m (excluding cost of Age Related Tax Credit) |
Cost of Age-Related Tax Credit €m |
|
2005 |
230 |
Not Applicable |
|
2006 |
261 |
Not Applicable |
|
2007 |
300 |
Not Applicable |
|
2008 |
321 |
Not Applicable |
|
2009 |
374 |
216 |
|
2010 |
390 |
308 |
|
2011 |
404 |
333 |
|
2012 |
448 |
436 |
|
2013 (provisional data) |
461 |
115 |
|
2014 (estimate) |
370 |
0 |
(Figures shown in table are rounded to the nearest million).
55. Deputy Michael McGrath asked the Minister for Finance if there are any circumstances in which an insurance company may be restricted from increasing insurance premia in a manner similar to the approval required by banks to increase fees and charges; and if he will make a statement on the matter. [11124/14]
View answerIn my role as the Minister for Finance I have responsibility for the development of the legal framework governing financial regulation. The day to day responsibility for the supervision of financial institutions is a matter for the Central Bank, which is statutorily independent in the exercise of its regulatory functions.
The decision to provide any specific form of insurance cover and the price at which it is offered is a commercial matter based on the assessment an insurer will make of the risks involved and a need to ensure adequate provisioning for future losses. The Central Bank has no remit over the pricing of insurance products. Competent Authorities are specifically restricted from interfering in the pricing of insurance products under the various European insurance directives.
Finally, it should be noted that any person who has an unresolved complaint can refer the matter to the Financial Services Ombudsman for investigation and adjudication at www. financialombudsman.ie or 1890 88 20 90.
56. Deputy Michael McGrath asked the Minister for Finance the amount of subordinate National Asset Management Agency bonds in issuance; when interest payments on these will commence; the interest payment that will attach to these bonds; and if he will make a statement on the matter. [11125/14]
View answerI am advised by NAMA, that there is €1.593 billion of NAMA subordinated debt, currently outstanding in issuance. This year, for the first time, NAMA declared a coupon on its subordinated debt. A coupon of €83.9 million was paid to the noteholders on the 3rd March 2014. The fixed coupon on the subordinated debt is 5.264%, which was set by reference to the Irish 10-year government bond yield (plus 75 basis points) on the date that the subordinated debt was first issued in March 2010. I am advised by NAMA that decisions in relation to the payment of a subordinated coupon are made by the NAMA Board in each financial year.
57. Deputy Terence Flanagan asked the Minister for Finance his views on taxes on investment properties (details supplied); and if he will make a statement on the matter. [11127/14]
View answerThe Universal Social Charge (USC) was introduced in Budget 2011 to replace the Income Levy and the Health Levy. It was a necessary measure to widen the tax base, remove poverty traps and raise revenue to reduce the budget deficit. It is a more sustainable charge than those it replaced. It is applied at a low rate on a wide base. The revenues collected play a vital part in meeting the many expenditure demands placed on the Exchequer.
The USC is an annual tax payable on an individual's total income (including rental income) in a year, subject to a number of exemptions and reliefs. In particular, an individual is not liable to pay USC where his or her total income in the tax year does not exceed €10,036. In addition, individuals aged 70 and over benefit from a lower rate of USC provided their total income does not exceed €60,000.
Where an individual is a chargeable person for income tax purposes, that individual's income is also liable to PRSI. This includes income arising in respect of letting property. The question of benefits arising from PRSI payments are a matter for my colleague the Minister for Social Protection.
I am advised by the Revenue Commissioners that gross rents received by landlords can be reduced by the specified deductions set out in section 97(2) of the Taxes Consolidation Act 1997. This includes interest paid on borrowed money used to purchase, improve or repair the property (which, in the case of residential property, is restricted to 75% of the interest and is subject to compliance with PRTB registration requirements for all tenancies that existed in relation to the property in the relevant year).
The 75% restriction on interest, which applies to residential property, was introduced in the April 2009 supplementary budget as part of a revenue-raising package aimed at stabilising the public finances.
With regard to a property in negative equity, where an investor incurs an actual loss in disposing of an asset, the loss can be set against other capital gains in computing any capital gains tax payable by the individual.
As you may be aware, delivering on a commitment in the Programme for Government, the USC was reviewed by the Department of Finance in the lead up to Budget 2012. The report is available at www.finance.gov.ie .
58. Deputy Willie Penrose asked the Minister for Finance if in the context of the correspondence furnished to him (details supplied), if cognisance is taken of the submission made therein in respect of this person's mortgage which is fully performing and the impact the proposed sale of the mortgage held with INBS; and if consideration will be given to the circumstances outlined therein; and if he will make a statement on the matter. [11147/14]
View answerThere is an obligation on the Special Liquidators to ensure that maximum value is extracted from the loan sales process for the benefit of all the creditors of IBRC including the State. The sales process plan and timeline for the sale of the residential mortgage portfolio has been developed following professional advice and in light of requirements for a robust and credible sales process in that context. Neither I nor my officials had any role in the development of the sales process plan for the residential mortgage book.
The Special Liquidators have given significant consideration to and have sought independent advice from PWC in relation to how the residential mortgage portfolio is to be dealt with. Following that independent advice, the Special Liquidators have decided that the residential mortgage book would be sold in portfolios with a view to maximising market interest and return within the timelines set out in the Ministerial Instructions.
I am advised that it is for this reason that the Special Liquidators have decided not to accept any bids from individual mortgage holders, however mortgage holders are permitted to buy out their mortgage at par value and that there are no legislative barriers for such Borrowers to do so.
In relation to the loss of protections under the Code of Conduct on Mortgage Arrears (CCMA), I have instructed my Department to examine the issue, in consultation with the Central Bank, with a view to bringing forward a solution, if required. Given this is a complex legal issue, it requires careful consideration so as not to put at risk the general applicability of the CCMA.
I welcome the voluntary agreement that has been reached between the Special Liquidators of IBRC and the bidders for the IBRC mortgage book in relation to the application of the CCMA. This is an important and timely development and will ensure that mortgage holders in arrears will be serviced in line with the CCMA and the customers will continue to be protected by the code in the event that they acquire these loans.
59. Deputy Brendan Griffin asked the Minister for Finance his future plans for the provision of mortgage interest relief for homeowners; and if he will make a statement on the matter. [11161/14]
View answerThe position is that in Finance Act 2010, mortgage interest relief was extended up to end of 2017 for those whose entitlement to relief was due to end in 2010 or after. Therefore, tax relief will continue to be available in respect of interest paid by an individual on qualifying home loans taken out on or after 1 January 2004 and on or before 31 December 2012, regardless of whether they are considered first-time buyers or non-first-time buyers.
Single individuals that are first-time buyers qualify for Mortgage Interest Relief up to a maximum ceiling of €10,000 for the first seven years of their mortgage. Thereafter relief is restricted to a ceiling of €3,000.
This Government is committed to helping address the particular problems faced by those that bought homes at the height of the property boom between 2004 and 2008. In this regard, in Budget 2012, the Minister fulfilled the commitment in the Programme for Government to increase the rate of mortgage interest relief to 30 per cent for first time buyers who took out their first mortgage in that period. This was the period during which house prices peaked.
A mortgage holder will qualify for the increased rate if they made their first mortgage interest payment in the period 2004 to 2008 or if they drew down their mortgage in that period. In addition, the increased rate of tax relief for first time buyers who took out their first mortgage in that period will continue up to and including the 2017 tax year.
The arrangements and qualifying conditions for mortgage interest relief are publicised widely whenever changes to the system are made in the Budget and are published on the Revenue website.
It would be inappropriate for me to become involved in speculation on this matter so far in advance of the Budget, which is over seven months away.
60. Deputy Thomas P. Broughan asked the Minister for Finance the amount the Revenue Commissioners spent on external specialist advice in the years 2011, 2012, 2013 and to date in 2014; and if he will provide a list of the companies that provided such services to the Revenue Commissioners in those years. [11162/14]
View answerI am advised by the Revenue Commissioners that the amounts of expenditure on external specialist advice in 2011, 2012, 2013 and year to date 2014 are set out in the table below.
In accordance with "Guidelines on the Engagement of Consultants and other External Support" issued by the Department of Finance, external specialists are procured only where it is necessary and value for money is obtained.
Revenue is continually engaged in seeking to identify administrative savings in this area and only approves expenditure on a business case basis.
|
Year |
Company |
Professional Service |
Value |
|
2011 |
Baker Ryan Tilly Glennon |
Specialist HR Advice and Support |
€6,993 |
|
|
Darlington Consulting |
VDU Ergonomic Assessment |
€229 |
|
|
Doran Cray Architectural Services |
Architectural Advice |
€12,857 |
|
|
Driver Focus |
Advice on development of safe driving for the work place |
€10,690 |
|
|
Murray McCarter |
Valuation Assistance |
€300 |
|
|
Riverside Medical Centre |
Medical Report |
€150 |
|
|
Vector Workplace and Facilities Mgt Ltd. |
Tender evaluation and development |
€944 |
|
|
Organisation Design Consultants Ltd |
Professional Advice |
€4,983 |
|
|
Ronan Smith Ind Consulting |
Professional Advice |
€19,166 |
|
|
Gartner Group |
Procurement Services |
€30,967 |
|
|
Arthur Cox |
Specialist HR Advice and Support |
€14,616 |
|
Total |
- |
- |
€101,895 |
|
2012 |
Bowe Systec (Ire) Ltd |
Report commissioned on facilities for Print & mail centre |
€7,260 |
|
|
Catalyst Consultants |
Specialist HR Advice and Support |
€4,800 |
|
|
Achilles Procurement |
Technical Advice on Procurement |
€5,243 |
|
|
OHSS Safety Consultants |
Health & Safety Air quality control |
€1,919 |
|
|
Authentic |
Technical Advice on Procurement |
€775 |
|
|
Baker Tilly Ryan Glennon |
Specialist HR Advice and Support |
€14,706 |
|
|
Fitzsimons Doyle & Assoc. |
Refurbishment |
€984 |
|
|
Leyden Consulting Engineering |
VDU Ergonomic Assessment |
€697 |
|
|
Newbridge Research Centre |
Professional Advice |
€2,200 |
|
|
Oakwood Psychotherapy |
HR Support |
€540 |
|
|
Arthur Cox |
Specialist Advice |
€39,367 |
|
|
Philip Lee |
Specialist Advice |
€1,380 |
|
Total |
- |
- |
€79,871 |
|
2013 |
Arthur Cox Solicitors |
Specialist HR Advice and Support |
13,478.99 |
|
|
Authentic Solutions Ltd |
Energy Management Project Support |
7,011.00 |
|
|
Kashan Carpets and Flooring |
Valuation Assistance |
56.75 |
|
|
Lynne Forrest BA(Hons) MA |
Critical Incident Support |
240 |
|
|
OHSS Safety Consultants |
Environment Testing |
4,324.27 |
|
|
Summerhill Veterinary Ctr |
Veterinary Services |
41.5 |
|
|
Achilles Procurement Services |
Technical Advice on Procurement |
€1,104 |
|
|
Dalton Technologies Ltd |
R&D Advice |
€635 |
|
|
Leyden Consulting Eng |
VDU Ergonomic Assessment |
€2,177 |
|
|
Power Kelly & Co |
Professional Advice |
€2,190 |
|
|
Baker Tilly Ryan Glennon |
Specialist HR Advice and Support |
€1,593 |
|
|
Gartner Group |
Procurement Services |
€47,601 |
|
|
Arthur Cox |
Specialist Advice |
€14,096 |
|
Total |
- |
- |
€94,549 |
|
2014 |
Baker Tilly Ryan Glennon |
Specialist HR Advice and Support |
€2,892 |
|
|
Arthur Cox |
Specialist Advice |
€2,214 |
|
Total |
- |
- |
€5,106 |
