Written Answers Nos. 34 - 45
34. Deputy Brendan Smith asked the Tánaiste and Minister for Foreign Affairs and Trade the proposals he put forward at the recent EU Foreign Affairs Council meeting in relation to sanctions to be imposed at EU level on Russia; and if he will make a statement on the matter. [19901/14]
View answerAt the Foreign Affairs Council in Luxembourg of 14 April, Ministers decided to expand the list of those to whom visa bans and asset freezes will apply, the so-called Phase 2 measures, and this is set out in the first paragraph of the Council Conclusions: http://www.consilium.europa.eu/uedocs/cms_data/docs/pressdata/EN/foraff/142223.pdf. A decision was subsequently taken to suspend implementation of the measures against these 15 additional individuals pending developments following the adoption of the Geneva accord by Russia, Ukraine, the US and EU on 17 April. A Joint Statement agreed to by the parties in Geneva sets out steps to de-escalate tensions in eastern Ukraine including the disarming of illegal groups and the surrender of illegally-occupied buildings.
Regrettably, implementation of the agreement has been deeply disappointing to date. While Ukraine has taken steps to implement what has been agreed, Russia has not publicly called on the separatists to vacate occupied municipal buildings or lay down their weapons. It has therefore been decided to proceed with the formal listing of these individuals who are now subject to the same visa bans and asset freezes already imposed on 33 other persons. I strongly support High Representative Ashton’s call on Russia to take concrete action in support of the Geneva accord. We will continue to monitor developments closely and if necessary we will consider possible additional measures. To that end, preparatory work continues on so-called Phase Three measures so that further steps can be taken should they be required.
35. Deputy Brendan Smith asked the Tánaiste and Minister for Foreign Affairs and Trade the recent initiatives he has taken or proposes to take in relation to the urgent need to reach agreement on the proposals outlined by Ambassador Haass; and if he will make a statement on the matter. [19908/14]
View answerI spoke with the Secretary of State for Northern Ireland most recently on Tuesday when we discussed the talks and in particular the need to find a way to deal better and more comprehensively with the legacy of the past. I am firmly of the view that Northern Ireland urgently requires a new way forward on dealing with the past that can command public confidence. We agreed also that the early successful conclusion of the political talks represents the best opportunity to make progress across all three important areas of parades, flag and identity issues and dealing with the past. Maintaining the status quo in relation to these issues is not a feasible or satisfactory option for anyone.
I welcome that the NI party leaders are continuing to meet and to make progress. It is regrettable however that the UUP is not participating currently in these discussions which are focussed on issues of genuine concern to so many people. It is in the best interests of Northern Ireland that agreement is reached without further delay. I will continue to engage closely with the NI parties and the British Government over the coming weeks towards that end.
36. Deputy Éamon Ó Cuív asked the Minister for Finance the arrangements in place, in view of recent developments in the insurance industry, to ensure that vehicle insurance paid for the full year to companies that run into financial difficulties, will remain valid and in force and that the insurance cover will not be affected; and if he will make a statement on the matter. [19773/14]
View answer37. Deputy Éamon Ó Cuív asked the Minister for Finance the arrangements he has put in place to ensure the continued insurance cover of persons who purchased insurance with a company (details supplied) in view of the financial difficulties that have arisen for this company; and if he will make a statement on the matter. [19810/14]
View answerI propose to take Questions Nos. 36 and 37 together.
The provision of motor insurance cover is a commercial matter for insurance companies, which is based on a proper assessment of the risks they are accepting and the making of adequate provisioning to meet these risks. In my role as the Minister for Finance I have responsibility for the development of the legal framework governing financial regulation.
Under EU law which governs non-life insurance, an insurer is required to inform the regulator in its home Member State (its home regulator) that it intends to pursue business in another Member State. The home regulator must then provide the host regulator with a certificate attesting that the insurer covers the EU Solvency Capital Requirement, as well as the nature of the business which the insurer intends to undertake. The insurer may start to pursue business from the date that the certificate is communicated to the host regulator, in this case the Central Bank of Ireland.
Setanta Insurance Company Limited ("Setanta") is a Maltese incorporated company which was both authorised and prudentially supervised by the Malta Financial Services Authority (MFSA). While its financial position is not supervised by the Central Bank of Ireland as the Central Bank has no role in that regard, the firm is supervised by the Central Bank for conduct of business rules, i.e. consumer protection obligations. I understand that the Central Bank has been in ongoing contact with the MFSA in relation to Setanta in recent times.
On 16 April, 2014, Setanta determined that the company was insolvent and Setanta was formally placed into liquidation by the MFSA on 30 April, 2014. This means that Setanta does not have sufficient funds to be able to honour its full obligations towards claimants, policyholders and other creditors. While the position on each policy is for the liquidator to decide in due course, policyholders will be given cancellation notification during which period cover will remain in force. While policies will remain valid until the required notice period has been served, it is important to be clear that the amounts due under any claims may not be fully recoverable in all circumstances. In this light, it is important to note that the Central Bank of Ireland has advised all Setanta policyholders to arrange for alternative cover without delay.
The Central Bank is in ongoing contact with the Malta Financial Services Authority in relation to Setanta Insurance Company Limited, the impact on policyholders and the provision for relevant and appropriate information, particularly in relation to claims. The Central Bank has been engaging with over 230 brokers who were offering policies from Setanta Insurance to consumers to require them to immediately contact any Setanta policyholder and inform them of the urgency to make alternative motor insurance arrangements. The Motor Insurance Bureau of Ireland ("MIBI") have indicated that they intend to accept all third party claims in connection to Setanta policies. MIBI is a non-profit-making organisation which was established by Agreement between the Government and those companies underwriting motor insurance in Ireland. The principal role of MIBI is to compensate innocent victims of accidents caused by uninsured and unidentified vehicles.
First party claims on personal insurance policies will be payable from the Insurance Compensation Fund (ICF). Claimants will be eligible for 65% of the amount due or €825,000, whichever is the lesser. Under Section 3.6 of the Insurance Amendment Act 1964 (as amended) first party claims by a body corporate or unincorporated body are not covered by the ICF. Until otherwise advised those policyholders which have been affected by the collapse should continue to contact to Setanta Insurance Services Limited at 0818 255 255 (if calling from outside Ireland +353 1 897 6300) or on support@setantainsurance.com.
I understand that Insurance Ireland, which has also advised Setanta policyholders to arrange new motor insurance immediately, is also making information available to those who have queries, complaints or difficulties in relation to this matter through their service at (01) 676 1914 or by email at info@insuranceireland.eu. In addition, the Insurance Ireland 'Declined Cases Agreement' was available to policyholders of Setanta. The current Declined Cases Agreement was drawn up in 1981 and is adhered to by all motor insurers in Ireland. I am informed that under the agreement, the insurance market will not refuse to provide insurance to an individual seeking insurance, if he/she has approached at least three insurers and has not been able to obtain cover from them.
38. Deputy Terence Flanagan asked the Minister for Finance if a person (details supplied) in Dublin 5 will be able to apply retrospectively for the home renovation incentive scheme; and if he will make a statement on the matter. [19737/14]
View answerAs the Deputy is aware, I announced the Home Renovation Incentive in the recent Budget. When I announced the incentive on Budget night, the scheme was due to run from 1 January 2014 to 31 December 2015. However, upon further consideration I decided to bring the start date of the scheme forward to 25 October 2013. This scheme 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 principal private residence.
In addition to bringing forward the start date, I also decided to lower the minimum qualifying threshold to €5,000 (inclusive of VAT). 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. Qualifying expenditure is expenditure subject to the 13.5% VAT rate. This incentive is designed to provide a much needed stimulus to the construction sector by encouraging individuals to undertake works on their home. I regret, therefore, that I am unable to provide relief retrospectively for works already carried out.
39. Deputy Stephen S. Donnelly asked the Minister for Finance further to the statement by the special liquidators of Irish Bank Resolution Corporation on 25 April 2014 in which they stated a sum of money will be set aside to facilitate the provision of termination payments to certain IBRC employees who were employed by IBRC on 7 February 2013, if he will confirm the sum of money in question; and if he will make a statement on the matter. [19747/14]
View answerI understand that the Special Liquidators have set aside a sum of €5.5 million to facilitate the termination payments recommended by Mr. Kieran Mulvey of the Labour Relations Commission. I am advised that under the recommendation the majority of staff who were employed by IBRC on 7 February 2013 and who remained in employment until their contracts of employment were terminated by the Special Liquidators will receive a payment. Full details of the recommendation can be found on the IBOA website.
40. Deputy Billy Timmins asked the Minister for Finance the position regarding Setanta Insurance policy holders who have been informed that the company has gone into liquidation and may not be in a position to meet any or all of its claims in the event of them arising (details supplied); and if he will make a statement on the matter. [19750/14]
View answer45. Deputy Michael Lowry asked the Minister for Finance the position regarding the 75,000 Setanta Insurance policy holders here; where they now stand with regard to these policies; the steps to be taken to assist these policy holders; and if he will make a statement on the matter. [19792/14]
View answerI propose to take Questions Nos. 40 and 45 together.
Setanta Insurance Company Limited ("Setanta") is a Maltese incorporated company which was both authorised and prudentially supervised by the Malta Financial Services Authority (MFSA). Setanta was regulated at EU regulatory level in accordance with a directive known as Solvency I which currently places requirements on the amount of regulatory capital European insurance companies must hold against unforeseen events. I understand that Setanta met its EU regulatory obligations and under EU law is therefore entitled to trade across EU borders.
On 16 April, 2014, Setanta Insurance Company Ltd ("Setanta") determined that the company was insolvent. This means that Setanta does not have sufficient funds to be able to honour its full obligations towards claimants, policyholders and other creditors. Policyholders can expect to be given cancellation notification during which period cover will remain in force. While policies will remain valid until the required notice period has been served, it is important to be clear that the amounts due under any claims may not be fully recoverable in all circumstances. In this light, it is important to note that the Central Bank of Ireland has advised all Setanta policyholders to arrange for alternative cover without delay.
The Motor Insurance Bureau of Ireland ("MIBI") has indicated that it intends to accept all third party claims in connection to Setanta policies. MIBI is a non-profit-making organisation which was established by Agreement between the Government and those companies underwriting motor insurance in Ireland. The principal role of MIBI is to compensate innocent victims of accidents caused by uninsured and unidentified vehicles.
First party claims on personal insurance policies will be payable from the Insurance Compensation Fund (ICF). Claimants will be eligible for 65% of the amount due or €825,000, whichever is the lesser. Under Section 3.6 of the Insurance Amendment Act 1964 (as amended) first party claims by a body corporate or unincorporated body are not covered by the ICF. The refund of premiums for commercial and personal insurance policies is not covered by the ICF or MIBI. A portion of the premium refunds may, however, be available upon completion of the Setanta liquidation. Until otherwise advised those policyholders which have been affected by the collapse should continue to contact to Setanta Insurance Services Limited at 0818 255 255 (if calling from outside Ireland +353 1 897 6300) or on support@setantainsurance.com.
The Central Bank is in ongoing contact with the Malta Financial Services Authority in relation to Setanta Insurance Company Limited, the impact on policyholders and the provision for relevant and appropriate information, particularly in relation to claims. The Central Bank has been engaging with over 230 brokers who were offering policies from Setanta Insurance to consumers to require them to immediately contact any Setanta policyholder and inform them of the urgency to make alternative motor insurance arrangements.
I am informed that Insurance Ireland made arrangements for their member insurance companies to be open over the Easter period to assist Setanta policyholders in arranging cover. In addition, the Insurance Ireland 'Declined Cases Agreement' was available to policyholders of Setanta. The current Declined Cases Agreement was drawn up in 1981 and is adhered to by all motor insurers in Ireland. I am informed that under the agreement, the insurance market will not refuse to provide insurance to an individual seeking insurance, if he/she has approached at least three insurers and has not been able to obtain cover from them. I understand that Insurance Ireland is also making information available to those who have queries, complaints or difficulties in relation to this matter through their service at (01) 676 1914 or by email at info@insuranceireland.eu.
41. Deputy Billy Timmins asked the Minister for Finance the position regarding old age pensioners over 80 years of age; if they are required to pay USC on their pensions; and if he will make a statement on the matter. [19751/14]
View answerThe USC was introduced in Budget 2011 to replace the Income Levy and 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.
As the Deputy is aware, delivering on a commitment in the Programme for Government, the USC was reviewed by my Department in the lead up to Budget 2012. The report is available at www.finance.gov.ie. As a result of the review of the USC, the Government decided in Budget 2012 to increase the entry point to the Universal Social Charge from €4,004 to €10,036 per annum. It is estimated that this removed almost 330,000 individuals from the charge.
Occupational pensions are liable to the USC if the payment is greater than the exemption limit, which from 1 January 2012 is €10,036 per annum. However, individuals who are aged 70 years and over and whose income does not exceed €60,000 only pay the reduced rate of 4% on all income above €10,036, or 7% on any income from self-employment that exceeds €100,000. The USC, like the Income Levy before it, does not apply to payments made by the Department of Social Protection, including State pensions. Furthermore, such payments will not be taken into account in determining if an individual has exceeded the €60,000 threshold.
42. Deputy Finian McGrath asked the Minister for Finance the position regarding local property tax in respect of a person (details supplied) in Dublin 9; and if he will make a statement on the matter. [19780/14]
View answerI am advised by Revenue that Section 156 of the Finance (Local Property Tax) Act 2012 converted any arrears of Household Charge (HHC) that was still outstanding on 1 July 2013 to a Local Property Tax (LPT) liability of €200 per property and made Revenue responsible for collecting the tax. As part of its communications strategy for HHC, Revenue advised property owners that any arrears should be paid by 31 March 2014 in order to avoid compliance and/or enforcement action, which could include "Deduction at Source" from salary or pension in appropriate cases.
In regard to the specific case to which the Deputy refers, Revenue has confirmed to me that the person in question paid her LPT liabilities in respect of 2013 and 2014 but does not appear to have paid her HHC liability in respect of 2012. The recent 'bill for €200' to which the Deputy refers relates to this charge and not to her 2013 or 2014 LPT liabilities. For the Deputy's information a member of the LPT team has already discussed this issue with the daughter of the person on her behalf.
43. Deputy Michael McCarthy asked the Minister for Finance if the Revenue Commissioners will confirm the situation concerning liability for local property tax in respect of an estate (details supplied) in County Cork; and if he will make a statement on the matter. [19783/14]
View answer44. Deputy Michael McCarthy asked the Minister for Finance if the Revenue Commissioners will confirm the situation concerning liability for local property tax in respect of an estate (details supplied) in County Cork; and if he will make a statement on the matter. [19784/14]
View answerI propose to take Questions Nos. 43 and 44 together.
I am advised by Revenue that the Finance (Local Property Tax) Act 2012 (as amended) makes provision for a number of exemptions from Local Property Tax (LPT). Section 10 of the Act provides for an exemption from LPT for residential properties in unfinished housing estates, providing those estates have been prescribed as unfinished by my colleague the Minister for the Environment, Community and Local Government. The prescribed list of unfinished estates to which the exemption applies was published by the Minister in March 2013 and can be viewed at www.environ.ie. Only properties included on the list qualify for exemption.
While Revenue has no role in the prescription process or in the compilation of the list, it has confirmed to me that parts of the estates referred to by the Deputy are included in the published list of unfinished housing estates. Any clarification with regard to the inclusion or exclusion of individual properties in the estates should be sought from the relevant Local Authority.
