Written Answers Nos. 54-62
54. Deputy Bernard J. Durkan asked the Tánaiste and Minister for Social Protection if partial rent supplement will be offered to a person (details supplied) in County Kildare; and if she will make a statement on the matter. [35120/15]
View answerThe client concerned should make an application to be assessed for entitlement to Rent Supplement to the Mid-Leinster Rent Unit, Po Box 11758, Dublin 24. It should be noted Rent Supplement is not payable where a person or their spouse/partner is in full-time employment of 30 hours or more per week.
55. Deputy Thomas P. Broughan asked the Minister for Finance the measures his Department is taking to ensure that diesel being sold at garages is tested as green diesel to protect motorists in this regard; the number of prosecutions of garage proprietors allegedly engaged in the sale of green diesel; and if he will make a statement on the matter. [35018/15]
View answerDiesel that is used in agricultural tractors and for certain other specified purposes is subject to a lower rate of excise duty and must contain prescribed markers, including a dye that gives it a green colouration, to distinguish it from diesel that may be used in motor vehicles. Garages and service stations may sell marked diesel provided that they are licensed to do so, in accordance with section 101, as amended, of the Finance Act 1999. I take it, therefore, that the Deputy is referring to the sale by such businesses of marked fuel from which the prescribed markers, including the green dye, have been removed illegally.
I am advised by the Revenue Commissioners, who are responsible for tackling fuel fraud, that action against illegal activities of this kind is a key priority for them. They undertake, on an ongoing basis, an extensive programme of compliance and enforcement actions to ensure adherence to the legal requirements governing the supply and sale of mineral oil and to allow action to be taken against fraud. Among the key elements of this programme is the carrying out of control and compliance inspections at critical points of the fuel supply chain, including visits to mineral oil traders to check records and to take samples of fuel for analysis.
A central purpose of the inspection visits made to the premises of mineral oils traders is to identify, through fuel sampling, any instances where laundered fuel (that is, fuel from which prescribed markers have been removed illegally) is being sold as road fuel in contravention of the law. This work is supported and facilitated by the requirement, introduced last April, that rebated fuel must contain, in addition to the existing markers, a new and more effective marking product that was identified as a result of a joint process conducted by the Revenue Commissioners in conjunction with HM Revenue and Customs in the UK.
There were two convictions in respect of the sale of laundered diesel in 2013 and four in 2014.
56. Deputy Paul J. Connaughton asked the Minister for Finance the rationale for the changes to the approved minimum retirement fund, given that many pension holders are concerned that their ability to withdraw funds will be severely curtailed; and if he will make a statement on the matter. [34962/15]
View answerFinance Act 2014 introduced changes to allow owners of approved minimum retirement funds (AMRFs) to draw-down up to 4% of the assets of such funds on one occasion in each year instead of the facility to draw-down the accrued income and gains of such funds, as had applied prior to the changes.
I should explain by way of background, that under the flexible options at retirement arrangements (the so-called "ARF option"), where an individual in a Defined Contribution pension savings arrangement is under age 75 at the time of exercising the option and does not meet the guaranteed pension income requirement of €12,700 per annum, that individual must place a maximum "set aside" amount of €63,500 (or the remainder of the pension funds if less than €63,500 after taking the retirement lump sum) in an AMRF or purchase an annuity with those funds.
Any amount of remaining pension funds in excess of €63,500 can be invested in an ARF with access to those funds at the owner's discretion (subject to tax, at the marginal rate and having regard to the imputed distribution requirements).
The purpose of the AMRF is to ensure that an individual without the minimum guaranteed pension income for life has a pension "safety-net" to provide for the latter years of his/her retirement. Up to Finance Act 2014, the capital invested in an AMRF could not be accessed until the AMRF owner reached age 75 (or meets the guaranteed pension income requirement before then) at which point the AMRF becomes an ARF with unrestricted access to the funds, subject to taxation. While the capital sum in an AMRF could not be accessed, as set out, any income, profits or gains accrued from the investment of the capital could, up to now, be withdrawn by the AMRF owner, subject to tax at the marginal rate.
I decided to change the arrangements for AMRFs so as to allow AMRF owners voluntary, tax-liable access to a maximum of 4% of their AMRF assets each year up to the point at which the AMRF becomes an ARF. This change provides AMRF owners with access to a definitive and certain level of income from their AMRF rather than the uncertain level of income which access to the accrued income, profits and gains in the AMRF provided.
Under the previous access arrangements for AMRFs, the extent of any income, profit or gains would depend on the performance of the investment options taken and could, therefore, be highly volatile with the possibility of little or no gains accruing in certain years. In addition, the scale of the capital allowed for in an AMRF, at €63,500, would not always permit for investment returns of any significant scale to be made using a prudent investment policy.
The change allowing access to a specified percentage of the capital in an AMRF is primarily aimed at those individuals whose AMRF constitutes a significant part of their retirement funds and who, while not wishing to purchase a pension annuity with those funds, may require access to a portion of these funds to provide a more certain form of supplementary pension income prior to reaching age 75. This facility also ensures that an individual will have some remaining funds in the AMRF at age 75 to provide for their remaining years, assuming the individual has not purchased a pension annuity in the meantime.
Individuals whose AMRF represents a less significant part of their retirement funds and whose circumstances would allow for greater investment risk and, therefore, potentially greater investment returns will be limited to the 4% level of asset draw down. However, this draw down will also be available to them for periods when their AMRF investments make losses or returns of less than 4% of the value of their AMRF assets and where, under the previous arrangement, they would not have been able to make a draw down or a draw down of a lesser value than will now be permitted. I consider that the change will be to the benefit of AMRF owners, generally, over the medium to longer term.
57. Deputy Ruth Coppinger asked the Minister for Finance his views on the consultation paper 88 on credit unions from the Central Bank of Ireland . [34964/15]
View answer58. Deputy Ruth Coppinger asked the Minister for Finance his views that the new restrictions contained in the consultation paper 88 on credit unions from the Central Bank of Ireland will be detrimental to the credit union movement; and if he will make a statement on the matter. [34965/15]
View answer59. Deputy Ruth Coppinger asked the Minister for Finance his plans to implement regulations that will give effect to the consultation paper 88 on credit unions from the Central Bank of Ireland. [34966/15]
View answerI propose to take Questions Nos. 57 to 59, inclusive, together.
The Credit Union and Co-operation with Overseas Regulators Act 2012 (2012 Act) was signed into law by the President of Ireland on 19 December 2012. Following enactment, different parts of the 2012 Act have been commenced in tranches at different times. This approach was taken as the Department is cognisant of the fact that credit unions needed time to implement all aspects of the 2012 Act in a coherent and cohesive manner and so this has informed the timeline for implementation of the various measures on different dates.
I have not yet signed the order to commence the remaining sections of the 2012 Act which relate to the following areas: reserves; liquidity; lending; investments; savings; borrowing; systems, controls and reporting arrangements; and services exempt from additional services requirements.
I have been informed by the Central Bank that the draft regulations set out in Consultation Paper 88 (CP88), will be introduced at end December 2015. It is my intention to commence the remaining sections of the 2012 Act on 31 December 2015 in line with the introduction of the regulations. These sections of the 2012 Act, when commenced, will replace, amend or supplement existing sections of the 1997 Act.
My role as Minister for Finance is to ensure that the legal framework for credit unions is appropriate for the effective operation and supervision of credit unions.
The Registrar of Credit Unions at the Central Bank is the independent regulator for credit unions. Within her independent regulatory discretion, the Registrar acts to support the prudential soundness of individual credit unions, to maintain sector stability and to protect the savings of credit union members.
While it is important to distinguish this division of roles, it is equally important to recognise that both the Registrar of Credit Unions and myself, as Minister for Finance are working together for the safety of members' savings and the security of the credit union sector.
The introduction of the new sections into the 1997 Act by the 2012 Act will, in effect, remove some of the requirements (including limits) that currently exist in certain sections and will provide regulation making powers to the Central Bank. The new sections will also contain a number of new requirements.
The regulations will introduce a maximum individual member's savings limit of €100,000 which will ensure the protection of members' savings and continue to ensure that credit unions' funding is sufficiently diversified and is not dependent on a small number of members.
Following consultation with the credit union sector and representative bodies, the Central Bank amended the transitional arrangement for the savings regulations to provide for credit unions that have individual member savings in excess of €100,000 at the commencement of the regulations to apply to the Central Bank to retain these savings where they can demonstrate that it is appropriate and prudent for them to do so.
As outlined in the Central Bank's feedback statement on CP88, as part of the consultation process I proposed that in the interests of clarity and fairness, credit unions are provided with details of the process of applying for a retention of savings above the limit amount. I have been informed by the Registry of Credit Unions that all credit unions have been contacted giving further information on its application criteria for the retention of savings in excess of €100,000. The Registry of Credit Unions intends to engage with the representative bodies and to invite comments from them prior to finalisation of the application process. When the application process is finalised, the Registry will provide an application form and explanatory notes in order to assist credit unions. It is anticipated that application forms will be available during December 2015. It is envisaged that applications will be accepted in the first quarter of 2016 and that applicant credit unions will be informed by the end of the second quarter of 2016 on the outcome of the process, which is well within the 12 month transitional period. Where a credit union has demonstrated that it meets the criteria, it will be in a position to retain members' savings in excess of €100,000 held at the commencement of the regulations.
I welcome the steps that have been taken to provide clarity for credit unions on the criteria for the retention of savings over €100,000 and also welcome the proposed engagement with the representative bodies to seek their comments on the application process.
The Central Bank has also informed me that it is committed to undertaking a review of the continued appropriateness of the savings limit, once the impact of the restructuring process can be assessed. It is envisaged that this review will commence within three years of the introduction of the regulations. The Central Bank has agreed to provide regular updates to my Department on developments in this matter.
The Central Bank has further informed me that it is open to working with the credit union sector to ensure that prudent and appropriate business development can be facilitated within the regulatory framework. As set out in the feedback statement on CP88, the Central Bank intends to invite interested parties to discuss business model development in the coming months.
The Government's priorities remain the protection of members' savings, the financial stability of credit unions and the sector overall and it is absolutely determined to continue to support a strengthened and growing credit union movement.
60. Deputy Jack Wall asked the Minister for Finance if a person (details supplied) in County Kildare is due a tax rebate; and if he will make a statement on the matter. [34973/15]
View answerI have been advised by the Revenue Commissioners that they do not have sufficient information to establish if the person concerned is entitled to a repayment of tax. Revenue has written to the person concerned and on receipt of a response they will be in a position to determine if a refund of tax is due.
61. Deputy Terence Flanagan asked the Minister for Finance the amount paid through pension levy payments; if these have been discontinued; the number of existing pensioners whose pensions have been reduced because of the levy; and if he will make a statement on the matter. [34986/15]
View answerThe yield from the stamp duty levies introduced in 2011 to fund the Jobs Initiative amounts in total to €2,383 million to end- September 2015. The equivalent of the funds raised from the levies has been used to fund the various tax reductions and expenditure measures introduced by the Jobs Initiative which has been successful in helping to maintain and create employment.
The original 0.6% stamp duty levy on pension fund assets ended last year. The additional levy of 0.15% which I introduced for 2014 and 2015, mainly to help continue to fund Jobs Initiative, will also end after this year.
The chargeable persons for the levy are the trustees or other persons (including insurance companies) responsible 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 needed 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.
I have no detailed information on the decisions made by pension fund trustees or others in relation to the passing on of the full or a partial impact of the levy to the current, deferred or former (retired) members of pension schemes. I am not in position to say therefore how many pensioners have had their pensions reduced on foot of the levy. I am aware, however, that in certain cases where trustees have made the decision to pass on the impact or part of the impact of the levy to pensioners, that a smaller reduction in pension payments over the lifetime of the pension have been made in preference to a larger reduction over a shorter period.
62. Deputy Terence Flanagan asked the Minister for Finance his views on correspondence (details supplied) regarding the universal social charge; and if he will make a statement on the matter. [34990/15]
View answerSince coming into government, I have made several significant changes to the Universal Social Charge which have increased its fairness. As a result of a Review of USC by my Department, the Government decided in Budget 2012 to increase the entry point to the Universal Social Charge from €4,004 to €10,036 per annum. This removed an estimated 330,000 individuals from the charge in that year.
In Budget 2015 I further extended this exemption threshold to €12,012, to apply from 1 January 2015 onwards. This exempted a further 87,000 individuals from the charge. This means that 28% of all income earners are not liable for any Universal Social Charge at all. Furthermore, I also reduced the two lower rates at which USC is charged and extended the threshold before the 7% rate becomes chargeable. These measures, together with the introduction of a new 8% rate on income over €70,044, further enhanced the existing progressive nature of the USC.
The USC was designed and incorporated into the Irish taxation system to replace two other charges, namely the Health and Income Levies. It has played a vital part in meeting the many expenditure demands placed on the Exchequer.
Notwithstanding this, as a result of the changes to income tax and USC in Budget 2015, all those who currently pay income tax and/or USC have seen a reduction in their tax bill this year compared to 2014 where incomes are equal. Furthermore, the Government has committed to continue to reduce the tax burden on low and middle income earners in the coming years, contingent on having the fiscal space to do so.
