Written Answers Nos. 333-350
333. Deputy Paul J. Connaughton asked the Minister for Finance given the significant increases in the cost of motor insurance in recent months and the pressure this is placing on family finances, especially in areas outside the larger cities where public transport is not available, if he will consider reducing the amount of the Government levy on motor insurance; and if he will make a statement on the matter. [22130/15]
View answerIn my role as Minister for Finance I have responsibility for the development of the legal framework governing financial regulation. Neither I nor the Central Bank of Ireland, as regulator, interfere in the pricing of insurance products. The provision of insurance cover and the price at which it is offered is a commercial matter for insurance companies and is based on an assessment of the risks they are accepting and adequate provisioning to meet these risks.
While competition in the market place acts as an effective constraint on insurance costs, insurance companies must be conscious of their prudential obligations and are required by the Central Bank of Ireland to meet their capital requirements on an ongoing basis in order to ensure the sustainability of their business. In circumstances where they are exposed to a high level of claims, it is possible that their capital position can be affected with a consequential effect on prices. In this regard, it should be noted that the new prudential regime for insurers across the EU known as Solvency II, which will come into force from the start of 2016, will place a greater emphasis than the existing regime on the need to price risk appropriately, and will in turn require insurance companies to be more conscious of their pricing policy.
Government initiatives such as the establishment of the Personal Injuries Assessment Board and legislation to improve road safety, which has reduced accidents significantly, continue to make a major contribution to keeping insurance costs at a reasonable level.
The Insurance Compensation Fund (ICF) provides for payments to meet the liabilities of insolvent insurers in certain cases where it is unlikely that claims can be met elsewhere, thus protecting policyholders who would otherwise suffer a loss. It is funded through a levy which is applied to home, motor and commercial insurance. This levy, which operates under the Insurance Act 1964, came into effect from 1 January 2012 and continues to be required give the current liability on the Fund. Under Section 6 of the Insurance Act 1964 the responsibility for deciding whether the ICF has sufficient funds available to it at any particular time is a matter for the Central Bank of Ireland. Where, in the opinion of the Central Bank, the state of the ICF is such that financial support should be provided for it, it determines an appropriate contribution to be paid to it by each insurer calculated as a percentage, not exceeding 2% of the aggregate of the gross premiums paid to that insurer in respect of policies issued in respect of risks in the State. This determination is based on a review carried out by the Central Bank annually. The last such review was carried out in October 2014 following which the Central Bank made a determination that the levy should remain at 2%.
334. Deputy Finian McGrath asked the Minister for Finance if he will support a matter (details supplied) regarding mortgage interest rates; and if he will make a statement on the matter. [22140/15]
View answerAs the Deputy is aware, I met with senior management of Ireland's six main mortgage lenders on 19th and 21st May. The meetings focused on the mortgage market and specifically the comparatively high standard variable rates currently being charged by the banks.
I outlined my view, that Standard Variable Rates being charged in the Irish market are too high. There was agreement from all lenders that customers should have access to more competitive mortgage products as per my recommendation.
The banks agreed to review their rates and products and, by the beginning of July, to have simple options to reduce monthly mortgage payments for SVR customers. Some of the potential products include lower standard variable rates for existing and new customers, competitive fixed rate products and lower variable rates taking account of loan to value for new and existing customers.
In addition to the issue of rates I also outlined the need for greater competition in the market and the need for a more active and well-resourced campaign by the individual banks. This should focus on promoting awareness of their best offering and how easy it is for customers to take up new products and switch between different institutions if they wish to avail of better rates.
The position of home owners who are in negative equity was also discussed and assurances were sought and received that these homeowners will be able to avail of options to reduce their monthly repayments.
Officials in my Department will review progress over the coming weeks and a follow up set of meetings with each of the six banks will take place in September in advance of the Budget.
The details supplied in relation to this question are similar to those supplied in representations made to me recently. I have been informed that due to different market and funding dimensions in Northern Ireland, First Trust Bank's current SVR is 4.75%. (First Trust is AIB's Northern Ireland subsidiary).
Introductory rates are commonly offered by banks in Northern Ireland, including First Trust Bank. These exist for a relatively short period (normally 2-3 years). Up-front loan administration and arrangement fees are a feature of markets outside the Republic of Ireland, and are often charged to customers who wish to avail of these lower introductory rates. After the expiry of the discount period, the mortgage rate typically reverts to the SVR which, at 4.75%, is higher than the current AIB SVR rate in the Republic of 3.90%. Loan administration and arrangement fees are not currently charged to mortgage customers in the Republic of Ireland.
335. Deputy Eoghan Murphy asked the Minister for Finance the Revenue Commissioners' views on a matter (details supplied) regarding a redundancy situation. [22153/15]
View answerI am informed by the Revenue Commissioners that all amounts paid to an employee by an employer in connection with an employment are fully liable to income tax and this includes any specific amounts, however described, in an employment contract.
As such, where an employment contract provides specifically for the payment of a sum on termination of employment, such an amount is fully within the charge to income tax.
An ex-gratia payment made on retirement or removal from an employment is generally made outside the terms of an employment contract and benefits from favourable tax treatment.
Should the company in question introduce a specific condition into its employment contracts to provide for specified payments on terminations, such payments will be fully taxed and will not benefit from the more favourable tax treatment available for ex-gratia payments.
Were these provisions to be amended, this could lead to employers and employees amending the terms of contracts to provide for reduced salaries and higher termination payments with a view to minimising income tax payable. I therefore do not propose amending the current provisions.
In the United Kingdom the Revenue authorities may take the view that a redundancy payment is to be treated as earnings and, therefore, taxable. This will depend on the legal basis giving rise to the payment and will depend on the circumstances of each case.
336. Deputy Terence Flanagan asked the Minister for Finance the position regarding private pensions (details supplied); and if he will make a statement on the matter. [22202/15]
View answerFrom the details supplied I take it the Deputy is referring to the Pension Fund Levy.
The Pension Fund Levy is a stamp duty levy which applies to the market value, on the valuation date, of assets under management in pension funds and pension plans approved under Irish tax legislation (occupational pension schemes, Retirement Annuity Contracts and Personal Retirement Savings Accounts).
The chargeable persons for the pension fund levy are the trustees or other persons (including insurance companies) with responsibility for the management of the assets of the pension schemes or plans. The payment of the levy is treated as a necessary expense of a pension scheme and the trustees or insurer, as appropriate, are entitled, where they decide to do so, to adjust current or prospective benefits payable under a scheme to take account of the levy. It is up to the trustees to decide whether and how the levy should be passed on and who should be impacted and to what extent, given the particular circumstances of the pension schemes for which they are responsible. Should the option of reducing scheme benefits be taken, in no case may the reduction in an individual member's or class of member's benefits exceed the member's or class of member's share of the levy. Where a decision is taken by the trustees of a pension scheme to pass on the impact of the pension fund levy to scheme members as outlined then the impact on the scheme in terms of its solvency position would be neutral.
I announced in my Budget 2014 speech that the 0.6% Pension Fund Levy introduced to fund the Jobs Initiative in 2011 would be abolished from the 31st of December 2014. I did, however, introduce an additional levy on pension funds at 0.15% for 2014 and 2015. I did this to, among other things, continue to help fund the Jobs Initiative. I confirmed in my Budget 2015 speech that the additional 0.15% levy will expire at the end of 2015.
The reduced VAT rate of 9% on tourism and certain other services was one of the very significant and successful measures introduced by the Jobs Initiative. It was due to end in 2013. In my Budget 2014 speech I announced the continuation of the reduced 9% VAT rate. I also announced that the Air Travel Tax was being reduced to zero with effect from 1 April 2014. The 9% VAT rate has helped to create 15,000 new jobs as well as protecting existing jobs. Since the Budget announcement about the reduction in the Air Travel Tax, airlines have announced the opening up of new routes resulting in significant increases in passenger numbers with the associated increase in tourism activity and employment.
The pension fund levy does not apply to public service pension schemes because they are unfunded. However, the pensions of public servants have been subject to a public service pension reduction (PSPR) since 1 January 2011. The PSPR was introduced on 1 January 2011 under the Financial Emergency Measures in the Public Interest Act 2010. The PSPR is not a levy but is a pension cut affecting public service pensions. On introduction, the PSPR was estimated as reducing public service pensions by 4% on average, with more severe effects experienced at higher pension levels due to the progressive multi-band structure of the reduction.
A change to the PSPR was made on 1 January 2012, when a 20% reduction rate (previously 12%) was imposed on pension amounts above €100,000. With effect from 1 July 2013, more changes were made to the PSPR to deliver on the Government's commitment to further reducing those public service pensions above €32,500 by between 2% and 5% in certain circumstances, including the pensions above that level of individuals who retired after end- February 2012.
While the pension fund levies have ceased and will be ceased as outlined, I have no plans to repay the pension fund levy tax collected as suggested in the details supplied. The value of the funds raised by way of the levy have been used to protect and create jobs and this has helped to create the improving financial and economic position of the State. Taxpayers to whom the impact of the levy may have been passed on by the chargeable persons for the levy will benefit from the changes which I began in Budget 2015 and which will continue in future Budgets to reduce the tax burden on low and middle income earners.
337. Deputy Michelle Mulherin asked the Minister for Finance the composition of the Special Purpose Vehicle as regards private and public investment; if a profit has been delivered over the past five years; and if he will make a statement on the matter. [22222/15]
View answerThis response takes "the Special Purpose Vehicle" to be referring to National Asset Management Agency Investment Limited ('NAMAIL'), which was clarified with the Deputy's office in advance.
The composition of the investment in the Special Purpose Vehicle, National Asset Management Agency Investment Limited ('NAMAIL'), is outlined in Note 1.1 to the NAMA Group Annual Report and Financial Statements as at 31 December 2014.
NAMAIL was incorporated on 27 January 2010. NAMAIL is the company through which private investors have invested in the Group. NAMA holds 49 million A ordinary shares of NAMAIL. The remaining 51% of the shares of the company are owned in equal proportion by three private companies (Walbrook Capital; New Ireland Assurance Co. plc and Percy Nominees Ltd., a nominee of Prescient Investment Managers).
Under the terms of a shareholders agreement between NAMA and the private investors, NAMA may exercise a veto over decisions taken by NAMAIL. As a result of this veto, the private investors ability to control the financial and operating policies of the entity is restricted and NAMA has effective control of the company. By virtue of the control NAMA can exercise over NAMAIL, NAMA has consolidated NAMAIL and its subsidiaries.
The detailed profit/loss figures for the SPV (NAMAIL) for each year over the past five years are available in its annual financial statements. The Annual Reports and Financial Statements are available on the Agency's website, www.nama.ie.
More generally, NAMA itself has reported profits after tax in each year since it was established, other than in 2010, its first full year of operation, when it incurred an impairment charge of €1.5 billion.
In 2014, NAMA also reported its fourth successive year of profit, generating profit after tax of €458m (2013: €213m).
338. Deputy Michelle Mulherin asked the Minister for Finance the financial returns per annum for the Special Purpose Vehicle since the National Asset Management Agency was set up; and if he will make a statement on the matter. [22223/15]
View answerThis response takes "the Special Purpose Vehicle" to be referring to National Asset Management Agency Investment Limited ('NAMAIL'), which was clarified with the Deputy's office in advance.
I am informed that the annual return figures for the Special Purpose Vehicle, National Asset Management Agency Investment Limited ('NAMAIL'), are available in its annual financial statements.
As the Deputy is aware NAMAIL is an investment holding company established for the purposes of complying with Eurostat rules. I presume therefore that the Deputy is referring to NAMA's overall rate of return, which is set out on page 41 of NAMA's Annual Report and Financial Statements for 2014. During 2014, the NAMA Board approved an Entity Return on Investment target benchmark of 20%. The projected return as at end-2014 was 24%.
NAMAIL is the company through which private investors have invested in the Group. NAMA holds 49 million A ordinary shares of NAMAIL. The remaining 51 million B ordinary shares of the company are owned in equal proportion by three private companies (Walbrook Capital; New Ireland Assurance Co. plc and Percy Nominees Ltd., a nominee of Prescient Investment Managers). Under the shareholders' agreement, the maximum return which will be paid to the private investors by way of dividend is restricted to the 10 year Irish Government Bond Yield applying at the date of the declaration of the dividend. In addition the maximum investment return to the private investors is capped under the Articles of Association of NAMAIL.
On 13 March 2014, the Board of NAMAIL declared and approved a dividend payment of €0.0302 per share (2013: €0.0424 per share). The amount of the dividend per share was based on the ten year Irish government bond yield as at 31 March 2014, and amounted to €1.54m (2013: €2.162m). The dividend was paid to the holders of B ordinary shares of NAMAIL only.
More generally NAMA, as a whole, has reported profits after tax in each year since it was established, other than in 2010, its first full year of operation, when it incurred an impairment charge of €1.5 billion. In 2014, NAMA itself reported its fourth successive year of profit, generating profit after tax of €458m (2013: €213m).
The Annual Reports and Accounts for each year since inception (2010 - 2014) are available on the NAMA website, www.nama.ie. The latest Annual Report for 2014 was published on 27th May last.
339. Deputy Terence Flanagan asked the Minister for Finance his views on correspondence (details supplied) regarding income tax; and if he will make a statement on the matter. [22228/15]
View answerI am advised by the Revenue Commissioners that the person concerned made contact with them very recently. Based on the information provided, the person's income is under the exemption limit for 2015. Consequently an amended certificate of tax credits issued to the person concerned granting the exemption.
340. Deputy Peter Mathews asked the Minister for Finance his views on Allied Irish Bank's decision to outsource work and staff from its application and development management teams within its information technology division to a third party service provider; if consideration has been given to the long-term strategic implications for the bank and the economy as a whole; and if he will make a statement on the matter. [22238/15]
View answer358. Deputy Michael McGrath asked the Minister for Finance if his attention has been drawn to plans by Allied Irish Banks to outsource the application and development management teams within its information technology division to a third-party service provider; if his approval is needed for such a decision under the relationship framework he has with the bank; and if he will make a statement on the matter. [22496/15]
View answerI propose to take Questions Nos. 340 and 358 together.
As the Deputy will be aware under the Relationship Frameworks the State does not intervene in the day to day operations of the banks or their management decisions regarding commercial matters and hence any discussions around outsourcing etc. are a matter for the bank, the staff and their union representatives. Notwithstanding this position, my officials do obviously take an active interest in how the bank's cost base evolves to ensure that the State's interests as shareholder are protected and to ensure that the Government's remuneration policy is enforced.
The bank has previously indicated that as part of its restructuring plan to reduce costs and increase efficiencies, outsourcing of certain functions would be considered in consultation with unions and affected staff. I have also been informed by the bank that there have been no compulsory redundancies as a result of its recent outsourcing activities. Any staff who transfer under outsourcing arrangements transfer under the TUPE regulations.
341. Deputy Joe Carey asked the Minister for Finance if he will extend a property tax incentive to larger towns, similar to that offered by the Living City Initiative; and if he will make a statement on the matter. [22250/15]
View answerA wide range of property-based tax relief schemes were introduced up to the mid 2000s. These included area-based tax incentives such as urban renewal, town renewal, rural renewal and the living over the shop schemes.
While many important developments were encouraged by these schemes, independent reviews concluded that the tax costs of the initiatives were high relative to the outputs achieved. Independent reviews also assessed the success of the schemes in the economic and social development and regeneration of designated areas. Following a number of reviews to assess the costs and benefits of property-based tax inventive schemes, these reliefs were wound down on a transitional basis.
The Living City Initiative, which was enacted in Finance Act 2013 and commenced on 5 May 2015, was introduced following a comprehensive, independent ex ante cost benefit analysis.
This Initiative is targeting particular areas of six cities which are most in need of regeneration. I do not currently intend to extend the Initiative further to towns. However, my Department will closely monitor the progress of the Initiative in the six cities, and will keep the matter of potentially extending the relief further under review.
It is important to note that this is a targeted scheme, and is not intended as a wide-spread initiative, as it is focused at those inner city areas which are most in need of attention.
342. Deputy Michael McGrath asked the Minister for Finance if, on their appointment or at any time since, the special liquidators of Irish Bank Resolution Corporation have identified examples where the previous management of the bank entered into verbal commitments with commercial borrowers, or where such a claim was made by a borrower to the special liquidators, and which did not appear to be backed up with documentation; if he will cite the number of such cases, and outline the approach of the special liquidators in dealing with these situations; and if he will make a statement on the matter. [22252/15]
View answer354. Deputy Michael McGrath asked the Minister for Finance if, following their appointment, the special liquidators of Irish Bank Resolution Corporation changed the interest rates being charged by the bank on any commercial loans; and if he will make a statement on the matter. [22483/15]
View answer356. Deputy Michael McGrath asked the Minister for Finance if he will provide details, in respect of Irish Bank Resolution Corporation, of the procedure in place, from the date of nationalisation and, if different, from the date of the appointment of the special liquidator, for the setting and changing of interest rates on specific commercial loans; and if he will make a statement on the matter. [22485/15]
View answerI propose to take Questions Nos. 342, 354 and 356 together.
I am informed that all dealings with IBRC customers, in the first instance, whether they were restructures or amendments to facilities, were dealt with by the respective relationship management team in IBRC.
I am advised that in accordance with bank policies, particular dealings such as any change of interest rate on facilities would be expected to be brought to Credit Committee for approval.
From the date of appointment of the Special Liquidators, one of the Special Liquidators or their nominee sat as a member of the Credit Committee as set out under the corporate governance structure agreed with the Central Bank.
I am advised that from these meetings, the Special Liquidators are only aware of two instances where alleged verbal commitments with commercial borrowers were made by the previous management of IBRC. Given that this information is commercially sensitive customer information the Special Liquidators are not in a position to provide further information regarding these situations.
343. Deputy Pádraig Mac Lochlainn asked the Minister for Finance his views that it is reasonable for the Revenue Commissioners to charge an administration fee of €500 to persons seeking repayment under the vehicle registration tax export repayment scheme; and if he will seek an explanation from the Revenue Commissioners on why this fee is so high. [22260/15]
View answerAs the Deputy is aware, section 135D(4)(b) of the Finance Act 1992 currently provides that an administration charge of €500 is deducted from the amount of Vehicle Registration Tax (VRT) refunded upon the export of a passenger motor car under the VRT Export Repayment Scheme.
The VRT Export Repayment Scheme was introduced in the Finance Act 2012 to provide for a repayment of VRT upon the export of passenger motor cars from the State. Up until the introduction of this Scheme individuals exporting vehicles had no way of recouping the residual VRT contained in the vehicle. An administration charge of €500 was initially necessary in order to recoup the significant investment necessary in setting up the technological platforms for operating the refund scheme and the interface with the third party to which the export examinations have been outsourced.
However, as I have said before, now that the necessary systems are in place and the scheme is operating effectively, I believe that there is an opportunity to reconsider the level of the charge with a view to a reduction in the context of this year's Finance Bill process. I have instructed my officials to examine the level at which the administration charge is set. Any new rate at which the administration charge may be set must continue to reflect the significant ongoing administrative and enforcement costs of the Scheme.
344. Deputy Bernard J. Durkan asked the Minister for Finance if the Revenue Commissioners will facilitate further discussions in the case of a person (details supplied) in County Kildare, in order to reach an amicable agreement in respect of repayment, as this person is finding it increasingly difficult to reach the monthly repayments; and if he will make a statement on the matter. [22278/15]
View answerI am advised by the Revenue Commissioners that they will make direct contact with the person concerned to discuss how the matter of clearing the tax liabilities of the person concerned can be progressed.
345. Deputy Thomas P. Broughan asked the Minister for Finance his views on the current regulation of gift cards, and with the charges of one particular brand of gift card from a company (details supplied); the value of unclaimed funds on these gift cards in 2013, 2014 and to date in 2015; if these unclaimed funds could be utilised for positive social purposes; and if he will make a statement on the matter. [22415/15]
View answerThe Electronic Money Directive 2009/110/EC was transposed into Irish law via the European Communities (Electronic Money) Regulations 2011 (S.I. No. 183 of 2011). These regulations deal with the taking up, pursuit and prudential supervision of electronic money institutions and the issuance and redeemability of electronic money. The Central Bank of Ireland are designated as the competent authority in order to ensure effective supervision and the implementation of the E-money Regulations in Ireland and I have no direct role in the matter.
Gift cards which meet the definition of electronic money are subject to regulation under the E-Money Regulations 2011. While I am satisfied with the current E-Money Regulations, I welcome moves by the Minister for Jobs, Enterprise and Innovation under the proposed Consumer Rights Bill aimed at strengthening the rights of consumers who purchase gift cards. I note that in accordance with the E-Money Regulations the consumer is to be informed, in advance of entering into a contract, of the conditions for redeeming the e-money, including any fees. Furthermore these fees must be proportionate and commensurate with costs actually incurred by the e-money issuer.
346. Deputy Thomas P. Broughan asked the Minister for Finance the current taxable status of the salaries of retained firefighters; the tax take received from the pension levy on this group in the years 2012 to 2014 and that expected in 2015; their ineligibility for pensions from their local authorities; and if he will make a statement on the matter. [22416/15]
View answerI am informed by the Revenue Commissioners that the salaries of retained firefighters are taxable and within the scope of the PAYE system.
The Deputy's query with regard to the pension levy is a matter proper to the Department of Public Expenditure and Reform. The query with regard to pension eligibility is a matter for the Department of the Environment, Community and Local Government. The Deputy may wish to refer these aspects of his question to the relevant Ministers.
347. Deputy Thomas P. Broughan asked the Minister for Finance the current tax take from the RCT sector in 2012, 2013, 2014 and the expected tax take for 2015; and if he will make a statement on the matter. [22417/15]
View answerI am informed by the Revenue Commissioners that the annual tax take from sectors to which Relevant Contracts Tax (RCT) is applicable (ie the 'Agriculture, forestry & fishing', 'Manufacturing' and 'Construction' sectors), in 2012 and 2013 (the latest year for which a sectoral breakdown is available) is €4,291 million and €4,104 million respectively. I am also advised by the Revenue Commissioners that breakdown by tax of these figures is available on their statistics website in the 'Revenue Net Receipts by Sector' section at www.revenue.ie/en/about/statistics/net-receipts-by-sector.pdf.
348. Deputy Billy Timmins asked the Minister for Finance his views on the comments of the Irish Fiscal Advisory Council on the Government's spring statement and stability programme update submission to the European Union Commission; and if he will make a statement on the matter. [22454/15]
View answerThe Fiscal Assessment Report published by the Council last week, the eighth such report since its inception in 2011, is being considered by my officials.
As with all their reports to date, the Fiscal Council has asserted its independence and produced some interesting pieces of analysis, not all of which I agree with. As is normal, a comprehensive response to all of the pertinent issues will be published in due course. I will however, give my initial views on the most significant issue raised by the Council.
The Fiscal Council stated that the fiscal projections contained in the Stability Programme Update did not show Ireland complying with our requirements under the Stability & Growth Pact, ie. the improvement in our structural balance was not the required minimum.
It is important to note that the European Commission will judge compliance with the fiscal rules on the basis of two assessments. First is the minimum annual improvement in the structural balance and the second is compliance with the expenditure benchmark. The minimum improvement in the structural balance and the expenditure benchmark are designed to be complementary.
The fact that the estimated structural improvement was less than required was explicitly addressed in the Spring Economic Statement. Indeed, based on my Department's estimates at that point in time, compliance with one assessment, the expenditure benchmark, results in not meeting the other assessment, the annual improvement in the structural balance. This somewhat counter intuitive outcome emphasises the material problems posed by some of the technical aspects the rules can generate.
While on the basis of the forecasts contained in the SES, Ireland is not projected to meet the minimum structural adjustment required under the preventive arm of the SGP, in general, Commission assessments of the fiscal stance have taken a pragmatic approach to some of these country specific aberrations and it is not expected to be a substantive issue for Ireland.
It should also be noted that the assessment of the SPU by Commission staff found that, assuming execution of the fiscal measures set out in the SPU, the outlook for 2016 is indeed compliant with the structural pillar under the Budgetary Rule.
While I will address other issues comprehensively in my formal response to the Council, I would strongly make the point that when formulating Budget 2016, the Government are acutely aware of the importance of adhering to the fiscal rules and our fiscal policy will reflect this.
349. Deputy Pearse Doherty asked the Minister for Finance his plans to alter the qualifying criteria for accession to the disabled drivers and disabled passengers scheme, for persons with disabilities; his plans which would provide for additionality to the scheme, to allow for applicants with other conditions to access the scheme; if he has considered how extending the criteria would benefit those whose mobility is greatly challenged by certain conditions not currently included as part of the scheme; and if he will make a statement on the matter. [22456/15]
View answerThe Drivers and Passengers with Disabilities (Tax Concessions) Scheme provides relief from VAT and VRT (up to a certain limit) on the purchase of an adapted car for transport of a person with specific severe and permanent physical disabilities, assistance with fuel costs, and an exemption from Motor Tax.
As the Deputy will be aware, to qualify for the Scheme, an applicant must have a permanent and severe physical disability within the terms of the Disabled Drivers and Disabled Passengers (Tax Concessions) Regulations (S.I. 353 of 1994) and satisfy one of the six qualifying criteria outlined in the Regulations.
The Scheme represents a significant tax expenditure. Between the Vehicle Registration Tax and VAT foregone, and the assistance with fuel costs used by members of the Scheme, based on provisional figures the Scheme represented a cost of €48.6 million to the Exchequer in 2014, an increase of €5.1 million on the 2013 cost. This figure does not include the revenue foregone to the Local Government Fund in the respect of the relief from Motor Tax provided to members of the Scheme.
I regularly receive correspondence from individuals with disabilities that do not meet the criteria but who believe they would benefit from the Scheme. While I have sympathy with those who do not qualify for Scheme, I cannot, given the scale and scope of the Scheme, expand it further within the current context of constrained resources.
350. Deputy Seán Kyne asked the Minister for Finance if the home renovation incentive scheme is being reviewed with a view to extending its life-span beyond 2015; and if he will make a statement on the matter. [22458/15]
View answerAs the Deputy is aware, the Home Renovation Incentive (HRI) was introduced in Budget 2014 and will run until the end of December this year. The incentive provides 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 Budget 2015 I extended the scheme to include rental properties, whose owners are subject to income tax.
Qualifying expenditure is expenditure subject to the 13.5% VAT rate. The work must cost a minimum of €4,405 (exclusive of VAT) which would attract a credit of €595. 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.
The aim of the incentive is to stimulate increased activity in the construction sector and boost employment. It is aimed at supporting fully tax compliant builders and moving activity out of the shadow economy into the legitimate economy as all expenditure and relief claims have to be registered electronically with the Revenue Commissioners.
In relation to the Deputy's query as to whether the HRI will be extended beyond 2015, it is a longstanding practice of the Minister for Finance not to comment in advance of the Budget on any tax matters that might be the subject of Budget decisions. However, as with all tax reliefs, the HRI will be considered as part of the forthcoming Budget and Finance Bill and any announcements will be made on Budget Day.
