Written Answers Nos. 47-58
47. Deputy Brian Stanley asked the Minister for Finance if he will consider placing a clause in the code of conduct for mortgage lenders to prevent them from charging interest on the warehoused section of the loan. [12522/14]
View answerThe "split mortgage" was suggested by the Inter-Departmental Mortgage Arrears Working Group (Keane Report) as one of the possible viable options for restructuring a mortgage in certain circumstances. As the Deputy is aware, the concept of a "split mortgage" involves splitting a distressed mortgage into an "affordable" mortgage and warehousing the balance. I am informed by the Central Bank that the majority of lenders have now introduced, a "split mortgage" as one of the alternative repayment arrangements to restructure a mortgage. While lenders have taken the broad approach set out in the Keane report, the product details vary from lender to lender. The most notable difference involves the interest rate charged on the warehoused element of the split mortgage while the maximum amount that can be warehoused is dependent on each lender's own internal criteria.
The split mortgage, like all other forbearance and modification arrangements, is based on affordability and sustainability of the arrangement from both the borrower and the lender's perspective. There is also a commercial and contractual leeway for the lender in formulating the details of any particular restructure or alternative repayment arrangement from the initial contractual requirements. The Central Bank's Code of Conduct on Mortgage Arrears (CCMA) however cannot mandate that a lender must provide one particular solution, or the terms of one particular solution, as opposed to another.
As lenders offer split mortgages with differing terms and conditions, the main supervisory issue is one of transparency and the Central Bank is of the view that all lenders should make public all terms and conditions and eligibility criteria for a "split mortgage" to aid both customers and financial advisors. In addition, the CCMA will require the lender, where an alternative repayment arrangement is offered, to outline the reasons why the alternative arrangement offered is considered to be appropriate and sustainable, as well as the advantages and any disadvantages or potential disadvantages of any arrangement offered, in the context of the individual circumstances of the borrower.
The new monthly mortgage restructures and arrears data published by my Department shows that some progress has been made in putting permanent mortgage restructures in place. For example, based on data published by my Department in respect of the MART institutions, the number of permanent restructures of primary dwelling houses (PDH) more than 90 days in arrears has risen from around 41,200 in August to around 54,000 at the end of January. The data also indicates that at end January, 7,131 split mortgages were put in place in respect of primary home mortgages and a further 384 in respect of buy to let mortgages (this data includes those split mortgages which are initially proposed for a short-term trial period).
The necessary framework is in place to enable banks to work with distressed homeowners to reach sustainable solutions for dealing with their personal indebted situations. 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. However, it is accepted that it will be necessary for lenders and borrowers to continue to build on this.
48. Deputy Dara Calleary asked the Minister for Finance the number of customs and excise officials who work at Ireland West Airport, Knock; if they work there on a full-time or part-time basis; and if he will make a statement on the matter. [12538/14]
View answerI am advised by the Revenue Commissioners that, although staff are not based full-time at Ireland West Airport Knock, staff are present for the majority of flights, including all flights from high risk destinations as determined by Revenue's risk analysis and profiling systems. Attendance by Revenue Officers at Regional Airports, such as Ireland West Airport Knock, is selective and targeted and is based on analysis and evaluation of national and international smuggling trends, traffic frequency, routes and other risk indicators. Attendance can also be as a result of specific intelligence. Flights with origins and destinations with a high-risk rating attract particular interest.
Attendance by staff at Ireland West Airport Knock covers the full range of flight times and is kept under constant review, in particular to take account of emerging smuggling trends and traffic increases at the Airport. This approach is in line with international practice in smaller airports and is also an efficient use of limited resources. Revenue is aware of new flights commencing shortly at the Airport and will keep the level and extent of customs controls under review, as necessary, based on risk analysis of those additional flights. A drugs detector dog is frequently in attendance at the Airport and X-ray equipment is in regular use in the arrivals terminal.
The Deputy will appreciate that, for reasons of operational sensitivity, the Revenue Commissioners are not in a position to provide specific details of enforcement deployment at any given location. Revenue s overall staff numbers have been reduced over the past two years in the context of Government policy on civil service numbers. However, the Commissioners assure me that their enforcement resources have been prioritised and are reinforced as necessary for particular operations. The Commissioners are satisfied that the current arrangements and resources are sufficient for the control of Ireland West Airport Knock.
49. Deputy Aengus Ó Snodaigh asked the Minister for Finance the commemorative coins he will issue as part of the decade of centenaries 2013-2023. [12541/14]
View answerThe Deputy may be aware that, on 24 September 2013, the Central Bank launched a €15 Silver proof coin commemorating the centenary of the 1913 Dublin Lockout. While there are plans to issue a coin, in 2016, to commemorate the Easter Rising, details have not yet been finalised. The issue of coins to commemorate other historic events has not yet been decided.
50. Deputy John McGuinness asked the Minister for Finance if he will confirm if, at any stage in 2008, officials in his Department were aware that a sum of approximately €7 billion was placed in Anglo Irish Bank by Irish Life and Permanent; and if he will make a statement on the matter. [12548/14]
View answerOfficials from my Department have consulted with the Deputy's office and confirmed that the question relates to a transaction between Anglo Irish Bank and Irish Life and Permanent. A reference to a short term placement of €7.5 billion with ILP was contained in the Anglo Irish Bank Annual Report and accounts for the year ended 30 September 2008.
As the Deputy will be aware these are matters that are currently before the courts and the subject of other investigations, as such it would therefore be inappropriate for me or the Department to provide any further information on this matter at this time.
51. Deputy Seán Crowe asked the Minister for Finance the number of persons in receipt of the mortgage interest relief supplement in south Kildare; and the number of applications per year since 2010. [12561/14]
View answerMortgage Interest Relief (MIR) is paid by way of tax relief at source (TRS) through the relevant lending institutions. A county level breakdown of MIR is not required for the proper administration of the scheme and for that reason is not captured by Revenue's IT systems. However, for the Deputy's information, the following table sets out the total number of mortgage accounts that received TRS for the years 2010 to 2013 along with the overall amount of TRS paid for each year.
|
Year |
Number of TRS Accounts |
TRS Allowed |
|
2010 |
349,533 |
€349,275,921 |
|
2011 |
352,806 |
€344,002,389 |
|
2012 |
355,366 |
€389,958,712 |
|
2013 |
346,499 |
€342,508,313 |
52. Deputy Terence Flanagan asked the Minister for Finance the total money collected from each local authority area under the local property tax in 2013 and 2014; and if he will make a statement on the matter. [12569/14]
View answerI am informed by the Revenue Commissioners that compliance data in relation to the Local Property Tax (LPT) is available broken down by city and county councils nationally and the most up to date figures for LPT collected in 2013 and 2014 were published on 18 February 2014 on the Commissioners website at: http://www.revenue.ie/en/tax/lpt/lpt-stats-0214.pdf. The Commissioners have confirmed that by the end of December 2013 €318m had been transferred by Revenue to the Exchequer in respect of LPT. Of this amount, €242m was in respect of LPT for 2013 and €76m relates to 2014 LPT. By the end of February 2014, a further €56.9m had been transferred by Revenue to the Exchequer.
53. Deputy Finian McGrath asked the Minister for Finance his views on correspondence (details supplied) regarding financial pressure. [12602/14]
View answerThe Government agreed with the recommendation of the Thornhill Group (the inter-Departmental Group, chaired by Dr Don Thornhill, which considered the structures and modalities of a property tax) that a universal liability to the Local Property Tax (LPT) should apply to all owners of residential property with a limited number of exemptions. Limiting the exemptions available allows the rate to be kept low for those liable persons who do not qualify for an exemption. There is no specific exemption from the requirement to pay LPT for pensioners under the Finance (Local Property Tax) Act 2012 (as amended), though such persons may be entitled to an exemption on other grounds or may qualify for a deferral subject to meeting the qualifying conditions.
The Thornhill Group considered the provision of waivers or deferrals for households unable to pay the tax or where a payment requirement would cause hardship. As a general principle, eligibility for deferral should be based on gross income. The system of deferrals in place is targeted at cases of need, where there is an inability to pay the local property tax under specific conditions. I have specifically provided in Part 12 of the Finance (Local Property Tax) Act 2012 (as amended) for a system of deferral arrangements for owner-occupiers where there is an inability to pay the tax and the person meets certain criteria based on income thresholds. These deferral arrangements also take account of mortgage interest payments made by the property owner.
I am informed by the Revenue Commissioners that a person whose only income is a DSP payment will qualify for a deferral of LPT. However, if a person has income in addition to any DSP payment, they will qualify for deferral if their gross annual income is less than €15,000 for a single person or €25,000 for a couple. They would qualify to defer 50% of their LPT charge where their gross annual income is less than €25,000 for a single person or €35,000 for a couple and the remaining 50% of the tax must be paid. Where the property was purchased with a mortgage, these income thresholds are increased by 80% of the gross mortgage interest payments. Specific examples of how the deferral arrangements work are provided on the Revenue website at http://www.revenue.ie/en/tax/lpt/deferring-payment.html.
For those who qualify for deferral but do not wish to defer their payment, or those who do not qualify for deferral because they do not meet the necessary criteria, Revenue has provided a wide range of payment options which enables property owners to select a payment option that suits their particular circumstances. Options include spreading payments over the course of the year by deduction at source from their DSP payment, by monthly direct debits through certain credit union accounts or their bank account or, by making regular weekly or monthly payments to one of the three payment service providers which are An Post, Payzone and Omnivend. Details of the costs payable to the three service providers are set out on the Revenue website athttp://www.revenue.ie/en/tax/lpt/payment-options/cash-payments.html#section5.
I am advised that further information on deferral of LPT as well as details of other payment methods are available by calling the LPT helpline on 1890 200 255.
54. Deputy Michael Healy-Rae asked the Minister for Finance with regard to legislation that is in place to allow disabled persons to avail of a VAT and VRT exception on modified vehicles, if legislation will be introduced to allow these persons to purchase motor cars over 2 litres in engine size, which was the case in the past. [12617/14]
View answerThe criteria relating to the engine size of a vehicle and the relief available for vehicles which qualify under the Disabled Drivers Passenger Scheme have been in place since 1989. The purpose of the scheme was to provide for ways in which people with a physical disability could become more mobile; it is felt that the present limit of 2000cc is sufficient to allow for an extensive choice of vehicle in that regard. The legislation does not provide for any exceptions and the provisions of SI 353/1994 must be fully adhered to.
Given the scale and scope of the scheme, any possible changes can only be made after careful consideration and with regard to the existing and prospective cost of the scheme and the available resources.
55. Deputy Caoimhghín Ó Caoláin asked the Minister for Finance if he will provide, in tabular form, the amount of revenue that has been generated arising from memoranda of understanding and the anti-contraband and anti-counterfeit agreements between the Government and tobacco companies in 2008 to 2013, inclusive; and if he will make a statement on the matter. [12622/14]
View answerI am advised by the Revenue Commissioners that the payments made to Ireland, under the agreements between the major tobacco manufacturers, the EU and participating Member States, in respect of the years 2008 to 2013, are as set out in the following table.
Payments to Ireland under International Tobacco Agreements
|
Year |
Total payments received by the Exchequer |
|
2008 |
€959,703 |
|
2009 |
€907,329 |
|
2010 |
€1,224,025 |
|
2011 |
€1,325,364 |
|
2012 |
€694,558 |
|
2013 |
€601,332 |
The overall amount of each annual payment is laid down in the agreements concerned and is allocated among the European Commission and the qualifying Member States in accordance with an agreed formula. The formulae make these allocations by reference to factors including a Member State's relative share of total tax and duty revenues from cigarettes manufactured by the company in question, in all the Member States concerned, and the proportion of seizures of cigarettes manufactured by the company accounted for by the Member State.
56. Deputy Bernard J. Durkan asked the Minister for Finance the extent to which a solution has been found to resolve the matter of unpaid income tax in the case of a person (details supplied) in County Kildare; and if he will make a statement on the matter. [12677/14]
View answerI am advised by Revenue that the person in question has a poor tax compliance history over recent years and did not engage in meaningful discussions to resolve his outstanding liability despite being afforded a number of opportunities to do so. Due to the lack of engagement, I am advised that Revenue was left with no alternative but to refer the case to the Sheriff for collection.
Notwithstanding the above, the Sheriff has very recently informed Revenue that the person has entered into a phased payment agreement and on that basis further debt recovery activity has ceased.
57. Deputy Michael McGrath asked the Minister for Finance the impact to date of institution-specific performance targets for covered banks set by the Central Bank of Ireland to move distressed small and medium-sized enterprise borrowers on to longer-term solutions; the amount of SME debt covered by these targets; and if he will make a statement on the matter. [12680/14]
View answer59. Deputy Michael McGrath asked the Minister for Finance the latest information he has on the amount of small and medium-sized enterprise debt outstanding in the country; the amount that is in arrears; the amount classified as non-performing; and if he will make a statement on the matter. [12682/14]
View answerI propose to take Questions Nos. 57 and 59 together.
The Government recognises that SMEs are the lifeblood of the economy and play a vital role in the continuing recovery of employment growth in our country. Government policy is focused on ensuring that all viable SMEs have access to an appropriate supply of credit from a diverse range of bank and non-bank sources. The Central Bank's statistics on SME lending provides a breakdown of outstanding debt across a number of different industries. SME credit to non-property, non-financial private-sector enterprises fell by 6.2 per cent (€1.6 billion) in the year to end-Q4 2013, to stand at €24.5 billion. This represents a decline of 3.1 per cent (€771 million) over the quarter as these SMEs continued to repay more debt than was drawn down. SMEs accounted for 67 per cent of all non-financial, non-property credit. The Central Bank does not publish figures on arrears or non-performing loans specific to the SME Sector.
In June 2013 the Central Bank set quarterly institution-specific performance targets for covered banks to move distressed SME borrowers onto longer-term forbearance solutions. The targets set reflect the banks' capacity, processes and systems. The Central Bank has informed the Minister for Finance that the banks have reported that they have met their required targets to date. This perspective has been reaffirmed by both the IMF and the European Commission who report that the workout of SME arrears is progressing and that imposed targets are being met.
Irish banks are well advanced in restructuring their SME loan books. Bank of Ireland indicated in their recently published results that they had reached resolution in 90% of distressed SME cases. Similarly the AIB's results indicate a resolution level of approximately 65%. It is also worth noting that defaulted loans for both banks have reduced year-on-year. Given the scale of the economic crisis that was inherited by this Government this clearly represents considerable progress in such a vital sector of the economy.
The Central Bank's process of assessing financial institutions in their efforts to move distressed SME borrowers onto longer term sustainable solutions is an important element in assisting SMEs to potentially transition from a distressed to a more sustainable state and will continue in 2014. Additionally, the Government's decision to fast track legislation to allow small companies (as defined by the Companies Acts) to apply to the Circuit Court for examinership, the Irish Banking Federation's new Protocol on Multi Banked SME debt and the on going work of the expanded Credit Review Office are all initiatives that will assist viable SMEs in adressing their debt situation.
In conclusion resolving the issue of SME debt in a mutually acceptable manner and that affords benefits not only to parties involved the SMEs and the banks but also to the wider society and economy has been, and remains, a key priority for this Government.
58. Deputy Michael McGrath asked the Minister for Finance his plans for dealing with small and medium enterprise debt held by non-Irish headquartered banks; and if he will make a statement on the matter. [12681/14]
View answerIn relation to SME debt held by non-domestic banks, two issues arise. Firstly, the core strategy of those banks in relation to the Irish banking market and secondly their plans to continue to service SME customers in the market. As the Deputy will be aware, recently Dankse Bank and ACC Bank have both indicated their intention to cease servicing the SME market and the focus at the moment is on ensuring that businesses can transfer their banking requirements to other financial institutions. It is the expectation that every effort will be made by those institutions to fully support businesses as they arrange new banking relationships with other financial institutions participating in the market.
In relation to Ulster Bank, the Deputy will be aware that following the review by the UK Treasury in Autumn 2013, RBS has reaffirmed its commitment to the Irish market. As part of that process, Treasury officials engaged with officials from my Department. RBS is currently reviewing the operations of Ulster Bank in Ireland with a view to creating a sustainable business model and on 27 February 2014, RBS reiterated its commitment to the Irish market. RBS also stated its intention to build on Ulster Bank's current position to be a compelling challenger bank to the domestic banks and focus firmly on the customer. It is good news that the bank has committed so firmly to the Irish market.
Officials in the Department of Finance have been in contact with both RBS and Ulster Bank officials and this will continue as the bank finalises its plans for the future. I also met with RBS executives to ascertain their outlook for the bank both here and in the UK.
