Written Answers Nos. 37-45
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Written Answers Nos. 37-45
37. Deputy Michael McCarthy asked the Minister for Finance if he will arrange for the Revenue Commissioners records to be amended in relation the tax liability in respect of a person (details supplied) in County Cork; and if he will ensure that no further demands are issued by the Revenue Commissioners in respect of this matter. [20518/14]
View answerI am advised by the Revenue Commissioners that no demands have issued to the taxpayer since this matter was previously raised in October 2013. The tax record has been amended appropriately however, as outlined in the previous response, the balance will remain on record and the taxpayer should contact the Collector General's in the event of a material change in circumstances influencing his ability to pay.
However, the taxpayer has since applied for a Tax Clearance Certificate, and as there is a tax return outstanding for 2012, the Tax Clearance certificate did not issue. The outstanding balance was listed among the reasons for non-issue of the Tax Clearance Certificate, but the outstanding return was in fact the deciding factor. The tax payer should contact Mr. Eugene Larkin, Revenue House, Blackpool, Cork at 021-6027262 or by e-mail at elarkin@revenue.ie to discuss the outstanding return and Tax Clearance application.
38. Deputy Tom Fleming asked the Minister for Finance if he will facilitate credit unions to return to lending and serving their members by the Central Bank of Ireland easing or lifting unreasonable, inflexible lending restrictions as these section 35 restrictions are preventing members from benefiting from improvements in their financial circumstances; if the tiered regulatory approach proposals contained within the consultation paper published by the Central Bank of Ireland, which would have a significant detrimental impact on many credit unions, will be revised before the next phase of the consultation process; and if he will make a statement on the matter. [20561/14]
View answer42. Deputy Jack Wall asked the Minister for Finance his views on a submission (details supplied) regarding credit unions; his plans to address the concerns raised by such a senior member of the organisation; his views regarding the future outlook for small branches of the organisation as outlined in the submission; and if he will make a statement on the matter. [20614/14]
View answerI propose to take Questions Nos. 38 and 42 together.
Credit Unions have an important role to play in providing credit in local communities around the country. While lending restrictions have been imposed on some credit unions, I have been informed by the Central Bank that these restrictions are imposed in the context of on-going matters of supervisory concern arising in individual credit unions. Where lending restrictions are imposed they tend to take the form of a restriction on individual loan size or on commercial lending activity and in some cases, a limit on the total lending permitted each month. At this time less than 10% of all credit unions have a restriction in place which limits the total amount of lending within the month, while close to 40% of all credit unions have a restriction on commercial lending activity.
For those credit unions where there is an individual loan size restriction in place, the level at which the limit is imposed ensures that the vast majority of those credit unions can continue to make loans significantly greater than the average loan for the sector of just above €6,000. Lending restrictions are, in most cases, intended to be short-term in nature and kept in place until the credit union has addressed the issues giving rise to the particular concerns advised to the credit union. These restrictions are reviewed on a regular basis.
Section 35(2) of the Credit Union Act, 1997 permits a credit union to have up to 30% of its loan book outstanding for more than 5 years and up to 10% of its loan book outstanding for more than 10 years. Based on the most recent information provided by credit unions to the Central Bank in the December 2013 quarterly prudential returns, average lending over 5 years as a percentage of gross loans was some 11%, while average lending over 10 years as a percentage of gross loans was about 2%. These figures indicate that, in general, credit unions are currently well within the limits as set down in the 1997 Act.
On foot of recommendations from the Commission on Credit Unions, section 11 of the Credit Union and Co-operation with Overseas Regulators Act 2012 substantially amends section 35 of the 1997 Act. Section 11 will be commenced in tandem with the new Central Bank regulations, which are to be introduced as part of the tiered regulatory approach recommended by the Commission. This tiered approach will address a range of areas including lending, investments, savings, borrowings, additional services, reserves and liquidity. The structure of the tiered regulatory approach has not yet been agreed. The Central Bank has issued a consultation paper on the proposed tiered regulatory approach in order to provide an opportunity for stakeholders to set out their views across a range of issues. The consultation process was extended by one month to 31 March 2014, at the request of sector stakeholders. The Central Bank is currently considering over 160 submissions received and will communicate with credit unions and other stakeholders in relation to the proposed next steps.
I have, on a number of occasions, highlighted the Governments' recognition of the important role of credit unions as a volunteer co-operative movement in this country and also the importance of getting lending going in the economy. However, the issue of lending needs to be constructively considered in order to ensure a viable credit union sector into the future.
39. Deputy Michael McGrath asked the Minister for Finance the role a person (details supplied) on secondment from the Central Bank of Ireland plays in the European Banking Authority; the salary grade which applies to the role; when the person is due to return to the Central Bank of Ireland; the role the person will assume with the bank on returning; and if he will make a statement on the matter. [20563/14]
View answerI have been informed by the Central Bank that the individual referred to by the Question is employed by the Central Bank at Director level and was seconded to the European Banking Authority (EBA) as a seconded national expert on 18 April 2011. This secondment is due to end in December 2014. The Central Bank has not made a decision regarding the individual's role with the Central Bank at the end of this secondment. I have been further informed by the Central Bank that the secondment was supported following a request from the EBA in early 2011 to make arrangements for more effective liaison with the national competent authorities of member states of the EU including the possibility of staff assignments at the EBA headquarters in London.
With the exception of statutory positions as published in the Central Bank's annual reports, the details of Central Bank employee's individual contracts of employment (including remuneration) are personal data protected by Data Protection legislation and therefore not disclosed by it.
40. Deputy Martin Heydon asked the Minister for Finance the assistance or protection the State will provide to persons or businesses that have lost out due to the liquidation of Setanta Insurance; and if he will make a statement on the matter. [20567/14]
View answerUnder 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. The Central Bank is in ongoing contact with the MFSA in relation to Setanta Insurance Company Limited, the impact on policyholders and the provision for relevant and appropriate information, particularly in relation to claims. My Department and the Central Bank will be reviewing the circumstances relating to Setanta and will be reporting to me on what lessons can be learnt and how the framework can be strengthened. The European Commission have indicated that it will review whether any issues raised relating to the regulatory framework requires action.
On 16 April, 2014, 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. Setanta was formally placed into liquidation by the MFSA following a meeting of the creditors which took place on the 30 April, 2014 where a liquidator, Mr Paul Mercieca, was appointed. The meeting was attended by a representative from the MFSA, who advised the Central Bank of Ireland on developments.
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. The Central Bank has written to over 230 brokers and firms 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.
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 Motor Insurance Bureau of Ireland ("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. If, for legal reasons, MIBI is not in a position to accept a claim, these third party claims will be eligible to proceed for consideration by the High Court for compensation from the ICF, payments from the Fund being subject to the limits set out above.
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.
41. Deputy Pearse Doherty asked the Minister for Finance further to Parliamentary Question No. 72 of 30 April 2014, when he stated the price achieved in the recent sale of 64% of the Irish Bank Resolution Corporation Limited in special liquidation residential mortgage book was in excess of the independent valuation obtained, if he will confirm if the independent valuation obtained was the higher of the run-off valuation or market valuation, the two terms used in the PricewaterhouseCoopers report into the disposal of the Irish Bank Resolution Corporation mortgage book, a heavily redacted version of that report having recently been submitted to the Joint Committee on Finance, Public Expenditure and Reform. [20589/14]
View answerI have been advised by the Special Liquidators that the independent valuation was set with reference to the higher of the run-off valuation and market valuation.
43. Deputy Róisín Shortall asked the Minister for Finance the reason the Revenue Commissioners are forcing taxpayers who have been erroneously billed for an outstanding household charge to prove they paid the household charge by writing to ask for a receipt of the payment instead of the Revenue Commissioners taking steps to collect this information themselves. [20615/14]
View answer44. Deputy Róisín Shortall asked the Minister for Finance the reason the Revenue Commissioners cannot match individual property addresses with the payees of the household charge; if his Department has contacted the Comptroller and Auditor General regarding this lapse in oversight; if an investigation is under way by that office; and the disciplinary action, if any, for the person or persons responsible for this error. [20616/14]
View answer45. Deputy Róisín Shortall asked the Minister for Finance the procedures in place to make refunds to persons who have been wrongly billed for the household charge when they have already paid it but who nonetheless pay the erroneous bill on foot of receiving a threatening letter from the Revenue Commissioners. [20617/14]
View answerI propose to take Questions Nos. 43 to 45, inclusive, together.
As I have previously informed the House on a number of occasions, most recently in my reply to Questions Nos. 168 and 169 on 6 May, Revenue received the Household Charge register from the Local Government Management Agency (LGMA) and this data was used to develop the Local Property Tax (LPT) Register. Revenue confirmed that as a result of a comprehensive data matching exercise they have matched 1.27 million properties, for which the Household Charge (HHC) was paid, to the LPT register. As the Deputy is aware, from Revenue published statistics, LPT returns were made in respect of 1.69 million properties (other than Local Authority/Social Housing). It is absolutely essential from a fairness perspective to the vast majority of house owners who have paid the HHC and LPT that Revenue follows through on those who have not.
In this context Revenue has identified a database of properties for which the Household Charge (HHC) is still outstanding but has stated at all times that the database is not 100% accurate for a number of reasons. The two main reasons are:
- The LGMA Register captured the name of the person who paid the HHC rather than the owner of the property, therefore, for example, where a son or daughter paid the HHC on behalf of a parent and particularly where the address of the property was a 'non-unique' rural address, Revenue may not have been able to match the HHC payment to the right property.
- The legislative basis for both the HHC and LPT are different. Some properties that are liable for LPT were exempt from the HHC and, unlike LPT, property owners were not actually required to make a claim for exemption from HHC. For that reason, Revenue could not identify every property that was exempt from HHC through the cross-referencing process.
In addition there are some examples where the LGMA register did not fully record situations where the HHC was paid to a Local Authority directly. In all their communications with property owners during the current compliance campaign, the Revenue Commissioners have highlighted that these inconsistencies exist and have outlined the action that owners need to take if the HHC is not due.
Revenue has provided a new online service to facilitate property owners to make payment, or to indicate that they have already paid or are exempt. Any person who has paid or is exempt from the HHC and have received a reminder letter should contact Revenue through the online LPT service at www.revenue.ie or by calling the LPT Helpline and their HHC record will be updated once contact is made online or through the Helpline service. The LPT Helpline service at 1890200255 has been open on an extended basis, to facilitate HHC queries, from 8am to 8pm since Tuesday 22 April.
For the Deputy's information, on 18 February Revenue announced a six-week period to enable those who had not paid the HHC to pay or arrange payment of the €200 charge to prevent any further interest and penalties. It carried out a significant media campaign advising people that they could check if they were on the arrears database by going online at www.revenue.ie. In the current phase of the campaign Revenue is writing to those property owners on the arrears database. This letter does four things:
- tells the property owner that per Revenue's records the property is on the arrears database,
- advises property owners who had paid the HHC or whose property was not liable for the HHC to contact Revenue to correct the database,
- advises those who are liable to pay the charge to prevent additional interest accruing, and
- advises those who do not, of the next steps that Revenue will take to collect the charge.
In no sense could this approach amount to issuing threatening letters. The letters are a necessary step in ensuring compliance with the Household Charge. Revenue has matched the vast majority of those who have paid the HHC. However, any data matching exercise of this type will not succeed in 100% matching and this is why Revenue is writing to those on the database to enable them tell Revenue that they have paid the HHC.
In relation to the Deputy's question regarding refunds of HHC, any refund claims relating to HHC arrears paid to Revenue on or after 1st July 2013 will be repaid in accordance with Section 26 of the 2012 Finance (Local Property Tax) Act (as amended). A refund will be issued where a claim is submitted to Revenue and is approved for repayment or where an overpayment is identified by Revenue.
Regarding the Deputy's reference to my Department contacting the Comptroller and Auditor General, as the Deputy will have seen from the foregoing there was no question of a lapse in oversight. There are perfectly valid reasons why Revenue has been unable to fully identify those who have paid the HHC or are exempt, or entitled to a waiver, from the charge and Revenue has stated this at all times in relation to LPT and the HHC arrears. I am very satisfied that Revenue has done an excellent job in relation to all aspects of LPT, including securing a 94% compliance rate in relation to 2013 LPT. I have no doubt that the C&AG will, in the course of its annual review of the Office of the Revenue Commissioners, examine various aspects of the introduction of LPT and Revenue will, as they always do, co-operate fully with the C&AG and will seek to constantly improve its systems and processes in light of live operational experience.
I am satisfied that Revenue has committed significant resources to compile as accurately as possible details of HHC non-compliant property owners. They have sought to fully explain why a letter may, despite their best efforts, have issued to a compliant property owner. Considering the number of property owners receiving correspondence in connection with the current compliance campaign, the level of error being reported by property owners to the LPT Branch, other than those explained by me earlier, is a very small proportion of the overall numbers.
