Tuesday, 16 Dec 2014

Written Answers Nos. 213 - 233

Road Network

Questions (213)

Dan Neville

Question:

213. Deputy Dan Neville asked the Minister for Finance if he will include the Adare bypass, County Limerick on the Government's list for European Investment Bank funding. [47943/14]

Written answers

Minister for Finance

In September the Ecofin Council requested that a Task Force be established to develop an EU investment project pipeline. The Task Force was chaired jointly by the EIB and the European Commission and included a nominee from each Member State. The Task Force requested each Member State to submit a list of projects in accordance with its terms of reference.

Ireland's EIB Task Force's project list has been the result of coordination between my Department, the Department of Public Expenditure and the Departments with responsibility for the investment sectors specified in the Task Force's Terms of Reference. We have relied on Department's and agencies with direct policy responsibility as the source of all the projects that have been included in Ireland's input to the EU wide project list. 

The Irish project list is part of an EU wide request from the Task Force to gauge the level of available projects in the period 2015-2017 should investment resources be found. The project list is only a cross section of available projects that could commence between 2015 and 2017. The list does not involve prioritisation and does not bestow any special status on the projects themselves. It is still a matter for the Department's concerned to advance these projects or other projects such as the one you have mentioned in accordance with the Capital programme and the Department of Public Expenditure and Reform.  As of now, there is no extra funding available beyond the allocations agreed at Budget time and published in the Comprehensive Expenditure Report 2015-2017. It is also important to acknowledge that the current rules of the Stability and Growth Pact mean that even if additional resources were to become available whether they could be used for additional expenditure would depend on the impact of that expenditure on our expenditure limits and the GGB, while how they could be used would depend on competing expenditure priorities.

NAMA Property Sales

Questions (214)

Aengus Ó Snodaigh

Question:

214. Deputy Aengus Ó Snodaigh asked the Minister for Finance if his attention has been drawn to the fact that the sale by the National Asset Management Agency of occupied apartment complexes to investors, both national and international, is contributing to rent inflation as the profiteering companies seem to immediately inflate the rent on the day of the rent review, as in the case of rental properties (details supplied) in Dublin 12, which was sold recently by NAMA to a foreign investor who has hiked rents by 23% from €1,100 to €1,600; and his views on the action being taken to address this inflationary trend. [47953/14]

Written answers

Minister for Finance

In line with the purposes of the NAMA Act and NAMA's objectives, NAMA has committed to repay 80% of its senior debt by end-2016. To meet this objective, NAMA must realise assets including through the sale residential property portfolios. It is entirely incorrect to claim that the sale of assets securing NAMA's loans is contributing to rent inflation in the private residential rental market. Rent levels are determined by the interaction of supply and demand in the market. The owners of residential property, be they NAMA debtors and receivers or private investors, set rents at levels that are in accordance with what the market is willing to pay. I cannot accept the implication of the Deputy's question, namely, that there is an onus on NAMA to subsidise the rents paid by private tenants.

However, we recognise the evidence of a growing and significant under-supply of available housing units demonstrated by rising prices and rent levels in key urban areas, especially in parts of Dublin.

I can assure you that this issue is being taken seriously. The Construction 2020 initiative sets out a focused programme of action  to deliver a strong, sustainable, well-financed, competitive and innovative approach to construction and housing. This initiative is examining a number of aspects of the Irish property market with the aim of uncovering the source of any current market dysfunction and making recommendations to address these. It will develop an overall strategic approach to housing supply one that is evidence based, and that equips local and national authorities with the tools they need to detect emerging imbalances and to take the steps necessary to correct them.  We intend to ensure that renting is a secure, stable, and viable option for those who choose it.

Cycle to Work Scheme Data

Questions (215)

John Deasy

Question:

215. Deputy John Deasy asked the Minister for Finance if he will provide a breakdown by county of the number of applications received and approved under the cycle to work scheme each year since its introduction. [47968/14]

Written answers

Minister for Finance

The cycle to work scheme came into operation on 1 January 2009. With a view to keeping the scheme simple and reducing administration on the part of employers, there is no notification procedure for employers involved. Accordingly, the Revenue Commissioners do not have statistics on the uptake of the scheme and a county level breakdown is not available.

The scheme operates on a self-administration basis, and relief is automatically available provided the employer is satisfied that the conditions of their particular scheme meet the requirements of the legislation. The purchase of bicycles and associated safety equipment by employers for employees or directors is subject to the normal Revenue audit procedure with the normal obligations on employers to maintain records (e.g. delivery dockets, invoices, payments details, etc.).

It was estimated at the time of the introduction of the scheme that approximately 7,000 employees would avail of it over the first five-year period of its operation at a cost of €0.4 million in a full year. However anecdotal evidence would suggest that the scheme has been considerably more successful than this.

Tobacco Control Measures

Questions (216)

Terence Flanagan

Question:

216. Deputy Terence Flanagan asked the Minister for Finance further to Parliamentary Questions Nos. 107 to 110, inclusive, of 9 October 2014, if his Department has been consulted by the Department of Health on the issues raised in the detailed opinions submitted by the EU member states; if his Department will have input into the preparation of the Department of Health response to the European Commission; if his Department shares any of the concerns raised by the EU member states; and if he will make a statement on the matter. [48022/14]

Written answers

Minister for Finance

The Public Health (Standardised Packaging of Tobacco) Bill 2013 is a matter for my colleague the Minister for Health. The Bill was formally notified to the Commission and to Member States under the EU Technical Standards Directive (98/34/EC) and the Tobacco Products Directive (2014/40/EU) on 17th June 2014. At the same time, formal notification was made to the World Trade Organisation under the Technical Barriers to Trade Agreement under the Technical Standards process. The Commission and Member States had until 18th September to comment or provide detailed opinions on the proposed measures. Detailed opinions on the proposed measures have been received from a number of Member States. For this reason, the standstill period has increased by another three months to 18 December 2014. The legislative process cannot continue until after this standstill period.

I understand that the Minister for Health is considering Ireland's response to the Commission in relation to the issues raised, in consultation with other relevant Government Departments.

Ministerial Travel

Questions (217)

Terence Flanagan

Question:

217. Deputy Terence Flanagan asked the Minister for Finance if he will provide details of all official foreign trips he and Ministers of State in his Department plan to take between now and the end of 2015; if he will provide the names of the persons he and Ministers of State in his Department will meet on these trips; the purpose of the trips; the duration of the trips; if there are plans to use all of these trips to promote Ireland as a good place for doing business and as a destination for foreign direct investment; and if he will make a statement on the matter. [48032/14]

Written answers

Minister for Finance

In response to the Deputy I have provided details of my travel arrangements and those of the Minister of State Harris:

Minister Noonan -  Apart from the forthcoming Eurogroup/Ecofin meetings there are no confirmed Ministerial travel arrangements in place for 2015. The schedule, thus far, for Eurogroup/Ecofin meetings is

- 26th/27th January

- 16th/17th February

- 9th/10th March

- 23rd/24th April

- 11th/12th May

- 18th/19th June

 Minister Harris - The only confirmed travel arrangements in 2015 for Minister of State Harris are as follows:

- Attending Asia Finance Forum, Hong Kong, 19-20 Jan-2015. Minister Harris is travelling to this destination to promote Ireland as a hub for international financial services, to undertake an intensive round of engagements with existing and prospective IDA clients, and to explore opening new markets for EI clients both in the area of financial services and more generally.

- Attending Ecofin Budget Council, Brussels, Nov-2015

Tax Code

Questions (218)

Finian McGrath

Question:

218. Deputy Finian McGrath asked the Minister for Finance if persons with an income of more than €150,000 per annum actually earn €11 billion in total; if income groups with more than €150,000 pay more than additional tax of 4.7%; and if he will make a statement on the matter. [48067/14]

Written answers

Minister for Finance

I am advised by the Revenue Commissioners that the Commissioners publish income distribution statistics based on incomes filed in tax returns. Income Distribution Statistics are published on Revenue's statistics webpage at http://www.revenue.ie/en/about/statistics/index.html.

For example, in 2012 (the most recent year for which tax returns are filed and processed), 37,200 taxpayer units have income of €150,000 or over. These cases report income of €10.5 billion in total and paid combined Income Tax/Universal Social Charge (USC) of €3.9 billion. From the total population for 2012, these cases represent 1.8% of income earners, account for 13.2% of total income and 25.5% of Income Tax/USC paid.

Married persons or civil partners who have elected or who have been deemed to have elected for joint assessment are counted as one tax unit.

Insurance Coverage

Questions (219)

Michael McGrath

Question:

219. Deputy Michael McGrath asked the Minister for Finance if there is a facility for insurance companies to check if other insurance companies have previously had an issue with a specific customer concerning non-disclosure of a cancelled policy; if so, the way the system operates; and if he will make a statement on the matter. [48069/14]

Written answers

Minister for Finance

In my role as Minister for Finance I have responsibility for the development of the legal framework governing financial regulation. The provision of insurance cover and the price at which it is offered is a commercial matter for insurance companies and neither the Government nor the Central Bank has any influence over this matter.

Officials from my Department have consulted Insurance Ireland and they have informed us that there is no general arrangement between insurers for checking on non-disclosure. Insurance Ireland state that these cases are normally detected when a policy is being taken out and the consumer is asked if they have ever had a policy cancelled or renewal refused and, if so, the reason why. Furthermore, a previously undisclosed claim can also be discovered during a claims investigation.

Insurance Ireland operates a free Insurance Information Service for those who have queries, complaints or difficulties in relation to obtaining insurance. Their service can be contacted at [phone] or by email at [e-mail].

Finally, it should be noted that if a policyholder has a complaint about an insurance company not honouring a claim on a policy, they can refer the matter to the Financial Services Ombudsman for adjudication http://www.financialombudsman.ie/.

IBRC Operations

Questions (220)

Catherine Murphy

Question:

220. Deputy Catherine Murphy asked the Minister for Finance if he is satisfied that the Irish Bank Resolution Corporation, in its disposal of a company (details supplied) in March 2012, acted in the best financial interest of the State; if his attention has been drawn to the company being sold to a much lower bid; if so, if he sought a satisfactory answer as to the reason; the reason the company was not put into examinership or receivership; if he has questioned the reason the same legal representatives acted for both the company in question and the purchaser; and if he will make a statement on the matter. [48159/14]

Written answers

Minister for Finance

Notwithstanding the State's ownership of the bank at the time, Irish Bank Resolution Corporation operated at an arm's length capacity from the State in relation to commercial issues. It was a matter for the board and management to determine and implement such policy in their organisation. Therefore, commercial decisions in relation to IBRC were solely a decision for the bank.  I am aware that KPMG Corporate Finance and Davy Corporate Finance ran a joint sales process to sell Siteserv which was in severe financial difficulties and was unable to service or pay back its loans to IBRC. The sale process was initiated by Siteserv and overseen by a subcommittee of the Siteserv Board. The sale process involved two stages and IBRC was briefed after each stage. The Board of Siteserv, as advised by KPMG Corporate Finance and Davy Corporate Finance, recommended the successful bid as representing the best return for IBRC. I am advised that the Board of the bank at that time were satisfied that this was the case.

Tax Code

Questions (221)

Brendan Griffin

Question:

221. Deputy Brendan Griffin asked the Minister for Finance if he will reconsider previous calls for the introduction of a 9% rate of VAT on residential housing to address the housing shortage and assist job retention and creation in the construction industry; and if he will make a statement on the matter. [48175/14]

Written answers

Minister for Finance

As the Deputy is aware, Irish VAT law must comply with EU VAT law which 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.

Having said that, it is possible for us to apply the 9% VAT rate to the construction of residential properties. However, this would involve having two separate VAT rates applying to construction services, which would be difficult to administer and could lead to underpayment of VAT. However, the Deputy will be aware that the Home Renovation Incentive, which came into operation on 25 October 2013 and will run until 31 December 2015, provides tax relief 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. 

The Home Renovation Incentive has been very successful to date with works on just under 12,100 homes notified to the Revenue online system as of 14 November 2014. This represents more than €243 million worth of works involving some 3,464 contractors. The Incentive is generating significant employment in the tax compliant construction sector and increasing sales in building supplies, hardware and related businesses. 

I announced in the Budget that I am extending the Home Renovation Incentive to rental properties whose owners are liable to income tax. The aim of this amendment is to increase and improve housing supply at a time when there is strong demand for housing and insufficient supply in certain areas.

As is currently the case, the work must cost a minimum of €5,000 inclusive of VAT which would attract a tax credit of €595. Relief will be granted in respect of qualifying expenditure up to €30,000 exclusive of VAT. The maximum credit is €4,050. Qualifying expenditure is expenditure which is subject to the 13.5% VAT rate.

The credit is payable over the two years following the year in which the work is carried out. The minimum threshold does not have to be reached by each contractor, where a homeowner or landlord 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 or landlord will qualify for relief.

The scheme is administered through Revenue's online systems. Contractors are required to inform Revenue in advance of details of works to be carried and are also required to notify Revenue in relation to any payments received in respect of the works. Homeowners are able to view the information provided to Revenue by the contractor through the Revenue electronic systems and 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.

Universal Social Charge Payments

Questions (222)

Brendan Griffin

Question:

222. Deputy Brendan Griffin asked the Minister for Finance if he will review the viability of a multi-annual plan to phase out the universal social charge; and if he will make a statement on the matter. [48176/14]

Written answers

Minister for Finance

The 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. I should point out that it was never intended that the USC would be a temporary measure. The USC was designed and incorporated in to the Irish taxation system as part of its permanent structure and the revenues collected play a vital part in meeting the many expenditure demands placed on the Exchequer.

It is estimated that the income tax and USC measures introduced in Budget 2015 will cost €478 million in 2015. Although this is a sizeable amount of money it is only about one tenth of the estimated yield from USC next year. Thus any plan to abolish USC would need to be implemented over a long period and would be subject to the fiscal space available in each year. In addition, Government priorities need to be considered on an annual basis, particularly regarding tax and expenditure measures, and the annual Budget process allows Government to consider all of these aspects in the round. Therefore, I would not be in favour of tying the Government to multi-annual specific changes to only one aspect of the tax system in isolation.

The Deputy should note that the amounts raised by the new USC in 2011 were of the same magnitude as that raised from the levies that it replaced. It is estimated that USC receipts for 2014 will amount to around €4 billion, or approximately one quarter of total income tax receipts. Any scheme to abolish the USC would have to contain a credible road map as to how this revenue would be replaced, in order that vital services can continue to be funded.

The Deputy will be aware that in fulfilment of a Programme for Government commitment my Department conducted a review of the USC in 2011. As a result, I decided to raise the USC exemption threshold from €4,004 to €10,036 in Budget 2012, removing 330,000 individuals from liability to the charge entirely.

Furthermore, in Budget 2015 I extended the USC exemption threshold to €12,012, taking another 87,000 out of the charge. Budget 2015 also included a reduction in the two lower rates of USC and an extension of the threshold before which an individual is liable to the 7% rate, thereby exempting all those on the standard minimum wage from liability to the higher rates of USC entirely. Collectively the budgetary income tax and USC measures ensure that all those who pay income tax and or USC will see a reduction in their tax bill from next year.

A fair, efficient and competitive income tax system is essential for economic growth and job creation. I have long said that the burden of the income tax system in Ireland is too high and that I would seek to reduce it when the public finances would allow me to do so. The income tax measures in the Bill are the first stage of a three-year plan to reduce the marginal tax rate on low and middle income earners in a manner that maintains the highly progressive nature of the Irish tax system. However, it is not possible to be specific about the individual components of the plan for subsequent years, as each component will need to be considered in terms of its overall contribution to the total tax package delivered in each year's Budget.

Tax Code

Questions (223)

Brendan Griffin

Question:

223. Deputy Brendan Griffin asked the Minister for Finance the increase in VRT and VAT on new car sales to date in 2014 compared to 2013; and if he will make a statement on the matter. [48180/14]

Written answers

Minister for Finance

I am informed by the Revenue Commissioners that the provisional increase in VRT and VAT on new registrations from January to November 2014, compared to the same period in 2013, is €104m (+24.4% ) and €83m (+31%) respectively.  

It should be noted that the VAT figure is partially estimated and that all 2014 receipts are provisional at this time and may be subject to revision.

Bank Debt Restructuring

Questions (224)

Brendan Griffin

Question:

224. Deputy Brendan Griffin asked the Minister for Finance in view of Ireland’s challenging debt levels and further to the June 2012 agreement, if he will renew and intensify Ireland’s efforts for a deal on retrospective banking debt; and if he will make a statement on the matter. [48187/14]

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, involving the ECB, is in place and operational, the European Stability Mechanism (ESM) could recapitalise banks directly.

Last week, on the 8th December, the ESM Board of Governors approved the creation of a new Direct Recapitalisation Instrument (DRI) in accordance with Article 19 of the ESM. The operational framework for the DRI, approved on the same date, includes a specific provision in relation to the retroactive application of the instrument. The guideline states that the potential application of the instrument for this purpose should be decided on a case-by-case basis and by mutual agreement.

However, I would remind the Deputy that unlike back in 2012, the ESM is no longer the only option open to us to recover the money provided to recapitalise our banks. Investors are now willing to support Irish banks again and the market value of our investments has improved accordingly.

With respect to the State's shareholdings or ownership in the banks, Government policy remains unchanged that we do not wish to hold these investments in the banks over the long term. Subject to market conditions therefore we are willing to exit in a manner that maximises value for the taxpayer.

In the last 18 months the State has exited successfully from some debt investments with the sale of our "Cocos" and Preference Shares in Bank of Ireland in addition to the sale of Irish Life. Given the significant cash resources we hold, we are not under any immediate pressure to exit our remaining investments. However given where our national debt is, neither do we have the luxury of holding on indefinitely.

In relation to AIB, which is our largest remaining investment, we have important work and decisions to make around the bank's capital structure and how we should best reconfigure our various holdings in a way that benefits both the bank and the taxpayer. Hence we are not making any decisions around reducing our ownership of the bank now. If we can deliver on this work programme next year and everything else develops as we would like, then we may be at the point where we can consider selling some of our shares.

In relation to retrospective recapitalisation via the ESM, I would reiterate what I've said previously, that in Europe a strategic approach tends to deliver the best results and that it serves our interest to keep this on the table.

However I see no benefit in making an application to the ESM now. I believe the work we are doing in relation to our AIB investments will help us better understand what they are really worth, and ultimately which route - ESM or the markets - will be our best option.

Tax Rebates

Questions (225)

Willie Penrose

Question:

225. Deputy Willie Penrose asked the Minister for Finance the steps he will take to ensure that a person (details supplied) in County Westmeath is reimbursed a property tax deduction, which was made by the Revenue Commissioners, in respect of a property tax to which they were not liable, as they were only a tenant and not the owner of the dwelling house which they vacated approximately four years ago and now live in other rented accommodation; if this reimbursement will be made without delay; and if he will make a statement on the matter. [48213/14]

Written answers

Minister for Finance

I am advised by Revenue that a key aspect of the work undertaken in regard to Local Property Tax (LPT) was the 'building' of a comprehensive register of residential properties in the State. During the development process, some matching difficulties occurred when consolidating the various Government and non-Government data sources and as a result the information input to the Register for a relatively small number of cases was incorrect.

As part of its comprehensive communications strategy, Revenue requested that any taxpayers who received an LPT Return for a property they did not own to make immediate contact with the LPT team so that the Register could be corrected thereby preventing any unnecessary debt collection/enforcement action, including possible mandatory deduction at source (DaS) from income/pension payments.

In regard to the specific case to which the Deputy refers, the difficulties occurred because the person in question did not make contact with Revenue to confirm that she was not the liable owner of the property for which an LPT Return issued, though it is acknowledged that the various LPT notifications issued to the address of the property in question and she may not have had sight of them. A subsequent reminder issued to her at the address concerned in July 2013 advising that DaS from her income would start if she did not address the issue. Unfortunately, contact was not made with Revenue and an instruction subsequently issued to her employer to start deductions.

Revenue has confirmed to me that the person made contact with the LPT team in October 2014 and confirmed that she was not the liable owner of the property. On the basis of follow up enquiries Revenue has now updated the Property Register with the correct ownership details and the deductions taken from the person's salary in respect of the 2013 and 2014 liabilities will be refunded to her in the coming days.

Tax Code

Questions (226)

Billy Timmins

Question:

226. Deputy Billy Timmins asked the Minister for Finance the position regarding DIRT being taken from children's savings accounts; if there are institutions that do not charge children DIRT; his views on this matter; the way it impacts on encouraging children to save; and if he will make a statement on the matter. [48238/14]

Written answers

Minister for Finance

I am informed by the Revenue Commissioners that the legislation governing the operation of Deposit Interest Retention Tax (DIRT) is set out in Chapters 4 and 5 of Part 8 of the Taxes Consolidation Act 1997 (the Act).

Under Section 257 of the Act all deposit takers are obliged to deduct Deposit Interest Retention Tax (DIRT) from payments of interest made to an account unless the account qualifies as an exempt account. There is no specific exemption in the case of interest paid on deposit accounts held by children.

Certain exemptions apply from DIRT, the main ones are:

Individuals aged over 65:

Since the enactment of the Finance Act 2007, individuals are exempt from Deposit Interest Retention Tax (DIRT) on their interest income provided they or their spouse or civil partner  are aged 65 or over, and their total income in a year (including the interest) is below the annual exemption limit.  

The annual exemption limits, for 2014, are as follows

€18,000 (in the case of a single person) and

€36,000 (in the case of a married couple or civil partnership).

In order to claim the exemption the person must make a declaration, on form DE1, to the financial institution where the account is held. As part of the process, the person makes a declaration on the form DE1 that their income is less than the exemption limit and that they will notify the financial institution if this changes.

In the absence of this declaration, a financial institution must deduct DIRT at the appropriate rate from the interest income. However, in any case where tax was so deducted from interest income of an individual who otherwise qualifies for the exemption, he or she will be entitled to a refund of that tax.

Permanently Incapacitated Individuals:

Since the enactment of the Finance Act, 2007, an exemption from DIRT also applies where an individual, his or her spouse or civil partner:

I. is permanently incapacitated by reason of physical or mental infirmity from maintaining himself or herself and

II. is not liable to pay income tax because of the level of his or her income.

In order to claim the exemption, the individual must make a declaration to the Revenue Commissioners, on form (DE 2) to the effect that they or their spouse or civil partner are permanently incapacitated. Where the person qualifies for the exemption, Revenue will notify the financial institution where the deposit account is held, that they should operate a DIRT free account for the individual.

In the absence of a Revenue notification, a financial institution must deduct DIRT at the appropriate rate from the interest income. However, in any case where tax was so deducted from interest income of an individual who otherwise qualifies for the exemption, he or she will be entitled to a refund of that tax.

Companies, Pension Funds and Charities:

DIRT is not deducted from interest paid on deposits held by companies, pension funds or charities. However, Irish resident companies pay tax on investment income (including deposit interest) at 25%.

Non-Resident Account Holders:

Deposit accounts where all of the interest on the deposit is beneficially owned by a person or persons resident outside the State are exempt from the application of DIRT. However a joint account owned by an Irish resident and a foreign resident would be subject to the retention tax system.

IBRC Liquidation

Questions (227)

Pearse Doherty

Question:

227. Deputy Pearse Doherty asked the Minister for Finance if he will provide an update on the liquidation process at Irish Bank Resolution Corporation. [48247/14]

Written answers

Minister for Finance

The Special Liquidators continue to implement the orderly and efficient winddown of Irish Bank Resolution Corporation Limited (in Special Liquidation) ( IBRC ) in accordance with the provisions of the IBRC Act and the instructions issued by the Minister for Finance under the IBRC Act 2013.

As the Deputy is aware, for operational reasons, the loan assets of IBRC were divided into six portfolios: Evergreen, Sand, Rock, Salt, Stone and Pebble. In total, there were 15,734 Borrower Groups comprising 24,632 loans for sale across the 6 portfolios.

In April 2014, the Special Liquidators announced that the initial loan sales process had concluded. The sales process of the IBRC loan assets delivered a very positive result with over 90% of the loan assets (with a par value of €21.7bn) being sold.

Following instructions from the Minister for Finance, NAMA are no longer obliged to purchase the unsold IBRC assets at their independent valuation as previously envisaged, as the expected proceeds to be raised from the sale of the IBRC loan assets will be sufficient to fully repay the IBRC debt to NAMA (this debt has since been fully repaid). Therefore, the Special Liquidators devised a further sales process in respect of the unsold loan assets to maximise the return to all remaining creditors of IBRC, including the State.

The Special Liquidators have corresponded with all those remaining Borrowers of IBRC whose loan assets were not sold in the first sales process providing them with an opportunity to make written representations on the method of disposal of their loans and the criteria for determining who may bid for loan assets. Consideration was given to these Borrower representations and the Special Liquidators responded to these Borrower representations.

This sales process is currently underway and the Special Liquidators are unable to quantify at this stage the total sales proceeds that will be achieved from this process. The Special Liquidators expect the sales of the remaining loan assets to be completed before 31 December 2014.

In tandem with the further sales process, the Special Liquidators have published advertisements and written to those known creditors in order to finalise their claims in the liquidation. Creditors in the UK and Ireland have until 31 March 2015 to submit their claims and those creditors in the US have until 31 May 2015.

Once all claims have been submitted, they will be reviewed in detail and adjudicated on by the Special Liquidators. In order to finalise this process, further information may be sought from some creditors in order to validate their claim.

It will be some time before the Special Liquidators will be in a position to advise on the likely dividends to be payable to creditors given:

1. The early stage in the creditor adjudication process;

2. The other contingent liabilities that may crystallise from litigation; and

3. The future receipts from the sale of the remaining assets.

IBRC Liquidation

Questions (228)

Billy Timmins

Question:

228. Deputy Billy Timmins asked the Minister for Finance if the Irish Bank Resolution Corporation junior bondholders will receive payment as part of the liquidation process; if there is a legal requirement to do so; if so, if there are plans to amend the law; and if he will make a statement on the matter. [48287/14]

Written answers

Minister for Finance

The Special Liquidators continue to implement the orderly and efficient wind down of Irish Bank Resolution Corporation Limited (in Special Liquidation) in accordance with the provisions of the IBRC Act and the instructions issued by me under the IBRC Act .

In April 2014, the Special Liquidators announced that the loan sales process had concluded. The sales process of the IBRC loan assets, including their segmentation to meet demand from international buyers, delivered a very positive result with over 90% of the loan assets (with a par value of €21.7bn) sold.

Following instructions issued by me, NAMA are no longer obliged to purchase the unsold IBRC assets at their independent valuation as previously envisaged, as it became clear that the expected proceeds to be raised from the sale of the IBRC loan assets would be sufficient to fully repay the IBRC debt to NAMA.

The Special Liquidators have therefore devised a further sales process in respect of the unsold loan assets so as to maximise the return to all remaining creditors of IBRC, including the State. This sales process is currently underway and the Special Liquidators are unable to quantify at this stage the total sales proceeds that will be achieved from this process.

As the Special Liquidators maximise the proceeds of the liquidation, it is important that they have a comprehensive view of the creditors who ultimately may be entitled to these proceeds. To this end, the Special Liquidators have published advertisements and written to those known creditors in order to finalise their claims in the liquidation. Creditors in the UK and Ireland have until 31 March 2015 to submit their claims and those creditors in the US have until 31 May 2015. 

Once all claims have been submitted, they will be reviewed in detail and adjudicated on by the Special Liquidators. In order to finalise this process, further information may be sought from some creditors in order to validate their claim.

The Special Liquidators are unable to comment at this stage both on the level of proceeds that will ultimately be generated from the liquidation and on the level of valid creditor claims that will ultimately be received in respect of the liquidation. It is the balance between the proceeds generated by the liquidation and level of valid claims received and approved that will ultimately determine the dividend to which each creditor may be entitled. The ultimate level of dividend, if any, paid to each creditor cannot be known until such time as the sales processes are complete, the total level of adjudicated creditors is finalised and the other contingent creditor claims which may crystallise, including those from litigation, are known.

It is understood that for the payment of proceeds from the liquidation, preferred creditors and senior unsecured creditors will rank in priority to the holders of subordinated debt. The priority for the distribution of assets under the Companies Acts is generally:

i. costs and expenses of the ongoing liquidation;

ii. preferential creditors, including certain taxes and employee and pension claims arising prior to the date of liquidation (these claims are certain to be paid in full)

iii amounts owing to NAMA under the Facility Deed acquired from the Central Bank which were secured by a floating charge over the banks assets (this debt is now fully repaid and so the floating charge is now released)

iv. unsecured creditors, including:

- Debts owing to the Minister/NTMA under ELG and to DGS

- Unguaranteed debt/depositors (including holders of tracker bonds etc.)

- Unknown, including:

- Local authority development bonds

- Suppliers/other normal unsecured creditors

- Employees that are not preferential creditors

- Contingent creditors and other potential costs principally relating to litigation etc 

v. subordinated creditors

vi. Members of the company - the Minister currently holds 100% of all shares and preference shares in the company.

Disabled Drivers and Passengers Scheme

Questions (229)

Paul Connaughton

Question:

229. Deputy Paul J. Connaughton asked the Minister for Finance if the adaptations to a vehicle under the disabled drivers and passengers scheme have to be 10% of the car price or if that has been discontinued; and if he will make a statement on the matter. [48295/14]

Written answers

Minister for Finance

Currently, the effect of Section 92(1)(a)(ii) of Finance Act 1989 is such that where a passenger with a disability purchases a vehicle and seeks the repayment or the remission of Vehicle Registration Tax and VAT as part of the Disabled Drivers and Passengers (Tax Concessions) Scheme the cost of the adaptation must consist of not less than 10% of the value of the vehicle excluding VAT and VRT.

However, as the Deputy will be aware, Section 61 of the Finance Bill 2014 amends Section 92 of the Finance Act 1989 to remove the 10% requirement.

Changes in technology have significantly reduced the cost of certain adaptations for vehicles, so that certain adaptations which may have been expensive in the past now fall below the 10% threshold. As a result the 10% adaptation limit has lost its efficacy and on that basis I made the decision to provide for its abolition in the Finance Bill 2014.

The removal of the 10% requirement will take effect immediately upon the enactment of the Finance Bill 2014.

Government Bonds

Questions (230)

Michael McGrath

Question:

230. Deputy Michael McGrath asked the Minister for Finance the amount of Irish Government bonds held by the European Central Bank under its securities markets programme and other market interventions; his views on the distribution of profits from the maturity or sale of these bonds; and if he will make a statement on the matter. [48325/14]

Written answers

Minister for Finance

In a press release from February of this year to mark the release of its Annual Accounts for 2013, the ECB announced that its nominal holding of Irish Government bonds under the Securities Market Programme (SMP) was €9.7 billion at end-2013.

Government Bonds

Questions (231)

Michael McGrath

Question:

231. Deputy Michael McGrath asked the Minister for Finance in view of the Central Bank statistical release, holders of Irish Government Bonds, 10 December 2014, of the €48 billion of Irish Government bonds held by credit institutions and the Central Bank of Ireland, the proportion of these that are held by the Central Bank of Ireland; and if he will make a statement on the matter. [48326/14]

Written answers

Minister for Finance

The Central Bank has advised that it is an independent entity and that it does not report on its individual investment holdings. It does report, however, on an annual basis only, on its holdings of Government bonds in its Special Portfolio, that being the portfolio of assets acquired after the resolution of IBRC and the exchange of government bonds for the promissory note held by the Bank for collateral purposes at that time. The Bank's Annual Report for 2014 will document its end-year position in this regard and is scheduled for publication in April 2015.

Wards of Court

Questions (232)

Seán Ó Fearghaíl

Question:

232. Deputy Seán Ó Fearghaíl asked the Minister for Finance his views on the issues raised in correspondence (details supplied) regarding the investment of funds for wards of court, and taxes on such moneys; and if he will make a statement on the matter. [48365/14]

Written answers

Minister for Finance

I am advised that jurisdiction in Wards of Court matters is vested in the High Court. The Courts are, subject only to the Constitution and the law, independent in the exercise of their judicial functions and, therefore, it is not open to me as a Minister to comment in any way. I understand that the Assisted Decision-Making (Capacity) Bill 2013 proposes to replace the Wards of Court system with a new legal framework that gives greater autonomy to those who need assistance in making fundamental decisions concerning their lives. If the Deputy requires further details on that Bill he should approach my colleague the Minister for Justice and Equality who is sponsoring the Bill.

For the information of the Deputy, section 189 of the Taxes Consolidation Act 1997 exempts from income tax and capital gains tax, the return arising to permanently incapacitated individuals from the investment of compensation payments awarded by the Courts, or made under an out-of-court settlement, or following assessment by the Personal Injuries Assessment Board, in respect of personal injury claims. The section applies where the return on such investment (both income and gains) is greater than 50 percent of the individual's total income and gains.

In relation to Deposit Interest Retention Tax (DIRT), Finance Act 2007 introduced new arrangements that allow a person to have any interest earned on money on deposit credited to their savings account by their Financial Institution without deduction of DIRT where they satisfy certain conditions. If a person meets these conditions, they can apply to Revenue to have the interest paid without deduction of DIRT. The conditions involved are that either the person or their Spouse or Civil Partner (if appropriate) are permanently incapacitated by physical or mental infirmity from maintaining themselves, and would be entitled to a refund of the entire amount of DIRT deducted by a Financial Institution. A trustee of a Special Trust under Section 189A of the Taxes Consolidation Act 1997, can apply for exemption from DIRT, in respect of an account held by them, where the trust was set up exclusively for the benefit of one or more specified permanently incapacitated individuals and the funds of such a trust were obtained by subscriptions from the general public. The funds in the account must be beneficially owned by the specified permanently incapacitated individual(s).

As regards exit tax, where funds which are held under the control or subject to the order of any Court are used to acquire units in an investment undertaking, payments from the investment undertaking to the Courts Service in respect of these units may be made without deduction of the exit tax. In addition the Courts Service will not be subject to exit tax in respect of a transfer of units resulting solely from the changing of investment managers. However, the Courts Service will be required to operate the exit tax when they allocate those payments to the beneficial owners.

The following persons may be entitled to repayment of exit tax provided the conditions outlined in the following sections of the Taxes Consolidation Act 1997, are satisfied

- a permanently incapacitated individual who is exempt from income tax under section 189 in respect of income arising from the investment of compensation payments in respect of personal injury claims;

- the trustees of a 'qualifying trust' within section 189A where the life policy is held as part of the trust fund (funds raised for the benefit of incapacitated individual(s) through public subscriptions) of the qualifying trust, provided that income from the trust or investment returns from investment of the trust funds is the sole or main income of the incapacitated individual;

- a thalidomide victim who is exempt from income tax under section 192 in respect of income arising from the investment of compensation payments made by the Minister for Health and Children or by the foundation Hilfswerk für behinderte Kinder.

The investment undertaking or Courts Service must deduct the exit tax in the normal manner, but the individual or trust may be entitled to a repayment of the exit tax. The exit tax can be reclaimed, where appropriate, when the annual tax return is submitted to Revenue.

I assume that the stamp duty referred to in the correspondence relates to fees payable to the Courts Service and thus is outside the scope of the tax system.

An Fhoireann Rannach

Questions (233)

Éamon Ó Cuív

Question:

233. D'fhiafraigh Deputy Éamon Ó Cuív den Aire Airgeadais an bhfuil iniúchadh déanta fós ar na poist agus na réimsí oibre ina mbeidh státseirbhísigh atá inniúil sa Bhéarla agus sa Ghaeilge ag teastáil, de réir mar a thug an Roinn Caiteachais Phoiblí agus Athchóirithe treoir don Roinn a dhéanamh; má tá an t-iniúchadh déanta, cad é líon agus cad iad céimeanna na bpost atá i gceist; cén líon de na poist sin a bhfuil duine leis an gcumas cuí Gaeilge agus Béarla ann cheana féin; cén plean atá ann chun na poist eile a líonadh le daoine a bhfuil na cáilíochtaí cuí acu; cén cháilíocht Ghaeilge atá riachtanach do na poist sin; agus an ndéanfaidh sé ráiteas ina thaobh. [48374/14]

Written answers

Minister for Finance

The Department is aware of its obligations under Section 11 of the Official Languages Act 2003. This Department has set out its obligations as part of our Irish Languages Scheme 2014-2017.

Generally the Department does not provide services directly to the public but where there is a need for translation and Divisions do not have a member of staff proficient in Irish, or where such a person is not available, a designated member of staff from another Division will provide a service in Irish where required. A Language and Qualifications survey was carried out during 2014 which indicated that 7 members of staff have some proficiency in Irish. This represents some 2.3% of the current staff compliment of the Department.

As part of the 2014-2017 Irish Languages Scheme within this Department, the Department plans to carry out the following activities:

Means of Communicating with the Public/Information to the Public

In conjunction with this new Irish Language Scheme, the Department is updating its Customer Service Action Plan and Customer Charter. The revised Charter will continue to reflect the principles of Quality Customer Service and in this way ensure that persons who wish to conduct their business through Irish are facilitated as much as possible.

Correspondence

All correspondence (letters, phone calls, requests) received in Irish will continue to be logged to allow for monitoring of demand and will be responded to in Irish. In addition to fulfilling the legal obligation to reply in Irish to correspondence received in Irish, the Department will strive to correspond in Irish with those who are known to prefer correspondence in Irish. Standard messages on the Department's e-mail system, such as disclaimers of responsibility, will be both in Irish and English. Staff will be encouraged to provide automatic out of office messages in Irish and English.

Department Website and Computer Systems

While a limited version of this website is available in Irish, it will be enhanced and developed to have at least 25% of documents made available in Irish and in addition to the provision of static content, the Department will continue to build on the Irish language content on its website.

Speeches

Speeches or statements, given by the Minister in the Oireachtas or elsewhere as well as made by senior officials will continue to be made in the language in which they are delivered.

Official Invitations

The Department will ensure that invitations to official functions hosted by the Minster or Ministers for State are printed bilingually.

Publications

The Department produces a range of publications from various policy areas. The Department undertakes to provide bilingual versions of core publications (major policy statements, strategies etc.) preferably within the same cover (either hard copy or electronic publications). It is not the intention to publish bilingually all technical documents or those having a small circulation. Under Section 10 of the Official Languages Act 2003, the Department publishes the following documents in both Irish and English:

Documents setting out public policy

Annual Report

Audited Accounts

Statement of Strategy

Documents of major public importance

The Department also publishes the following documents in both Irish and English:

Annual Appropriation Accounts

Budget (summary of Budget Measures)

Finance Accounts

Irish Language Scheme

Legislation

Medium Term Economic Strategy

White Paper on Estimates of Receipts and Expenditure

Oral Announcements/Telephone Communications with the Public

In line with the principles of Quality Customer Service, the Department continues to ensure that the switchboard operators and receptionists, who are the first point of contact with the public, give

The name of the Department in Irish and English

Are familiar with basic greetings in Irish

Put members of the public in contact without delay with whatever offices or officer is responsible for offering services required through Irish

Press Releases

Over the period of the Irish Language Scheme 2014-2017 the Department intends to issue 30% of press releases bilingually. Where possible press releases in Irish will issue at the same time as English language ones but where this is not possible, Irish language versions will be provided on the website within 24 hours.

Meetings

It is the policy of the Department that, when warranted, staff proficient in Irish will continue to be provided when meeting Irish language organisations where sufficient notice is given.

Learning and Development

The Department includes Irish language awareness as part of the Induction training course, to ensure that staff understand their bilingual obligations under the Official Languages Act 2003.

Seachtain na Gaeilge

The Department is committed to promoting cultural initiatives which support and encourages the use of the Irish language. In this way, the Department supports activities organised during Seachtain na Gaeilge and will seek advice from Irish language bodies in this respect.