Written Answers Nos. 238-260
238. Deputy Michael Healy-Rae asked the Tánaiste and Minister for Social Protection her views on correspondence (details supplied) regarding income levels at pre-budget 2013 levels; and if she will make a statement on the matter. [36144/15]
View answerThe farm assist scheme provides support for farmers on low incomes and is similar to jobseeker’s allowance. Farm assist recipients retain the advantages of the jobseeker’s allowance scheme such as the retention of secondary benefits and access to activation programmes. The 2015 Revised Estimates for the Department provide for expenditure of almost €89 million on the farm assist scheme which will benefit around 9,000 farmers with around 11,000 dependants each week.
All recipients of farm assist benefitted from the Christmas Bonus in December 2014 and will do so again this December. All recipients with children are benefiting from the increase in child benefit announced in both Budget 2014 and Budget 2015.
Changes introduced in Budgets 2012 and 2013 have brought farm assist into closer alignment with the jobseeker's allowance scheme’s treatment of self-employed persons. However, farm families with the lowest income will be least affected by these changes as the headline rates of farm assist have been maintained.
The assessment of means for the farm assist scheme is designed to reflect the actual net income from farming. Income and expenditure figures for the preceding year are generally used as an indicator of the expected position in the following year. However, farm assist is a flexible payment. Account is taken of any exceptional circumstances so as to ensure that the assessment accurately reflects the current situation. Any farmer experiencing lower levels of income or cash-flow issues can ask their local social welfare/Intreo office to review the level of means applying to their claim.
There are no plans to change the current scheme criteria.
239. Deputy Finian McGrath asked the Minister for Finance if there is funding for a new business such as a Start Up Refund (details supplied); and if he will make a statement on the matter. [36549/15]
View answerStartUp Refunds for Entrepreneurs (SURE) provides for a refund of income tax paid in previous years by an employee, an unemployed person or an individual who has been made redundant recently and starts their own qualifying business.
A dedicated website www.sure.gov.ie contains a wealth of information on the scheme and an easy to use online calculator, which allows entrepreneurs to input their details in order to estimate the amount of tax refund they may be eligible to receive.
The Local Enterprise Offices (LEOs), under the aegis of the Department of Jobs, Enterprise and Innovation, promote entrepreneurship and self-help and are now the first-stop-shop for those beginning a new business, as well as those wishing to expand their existing one. The LEOs are the local hub for enterprise support, delivering a comprehensive service to local entrepreneurs and businesses, including referral to the supports of other service providers.
A number of protocols have been agreed between Enterprise Ireland (on behalf of the LEOs) and other support services to provide for a level of cooperation and information exchange with the LEOs in order to assist in the provision of an expansive range of information and assistance to LEO clients. The Protocol between Revenue and Enterprise Ireland provides for this signposting service by the LEOs, including the SURE scheme. Therefore, any individual seeking assistance with an application for the SURE scheme, should approach their LEO in the first instance.
240. Deputy James Bannon asked the Minister for Finance if he will prioritise the bringing forward of an appointment in respect of an appeal for a person (details supplied) in County Longford for a primary medical certificate disabled drivers-passengers tax concessions scheme 1994. [36588/15]
View answerThe Disabled Drivers Medical Board of Appeal have informed me that the person concerned will be seen by the Board on 28 January 2016.
Regulation 6(1)(e) of the Disabled Drivers and Disabled Passengers (Tax Concession) Regulations 1994 (S.I. 353 of 1994) mandates that the Medical Board of Appeal is independent in the exercise of its functions.
241. Deputy Brendan Griffin asked the Minister for Finance his views on correspondence (details supplied) regarding taxation of pensions; and if he will make a statement on the matter. [36146/15]
View answerFrom the limited details supplied, I am assuming that the individual in this case has an approved minimum retirement fund (AMRF) with the Life Office concerned which she wishes to access on attaining the age of 75 in 2016.
An AMRF is essentially a special restricted type of Approved Retirement Fund (ARF), the purpose of which is to ensure that an individual who wishes to avail of an ARF, but who does not meet the minimum guaranteed pension income for life requirement (€12,700), has a pension "safety net" to provide for the latter years of his/her retirement. Prior to 2015, while the income and gains arising in an AMRF could be drawn down, the initial capital invested (a maximum of €63,500) could not be accessed (except to purchase an annuity) until the owner of the AMRF reached age 75. From 2015 onwards, an individual may draw down a maximum of 4% of the value of an AMRF annually.
When the owner of an AMRF reaches age 75 the AMRF is automatically converted to an ARF and the owner is then free to draw down the monies therein subject to taxation.
I am advised by the Revenue Commissioners that a Qualifying Fund Manager (QFM) who manages an ARF is required under section 784A of the Taxes Consolidation Act 1997, to treat a withdrawal from the fund as a payment of emoluments in the year in which the payment is made and to subject that payment to income tax under the PAYE system. The fund manager is obliged to deduct tax at the higher rate of income tax for the year in which the payment arises (40% for 2016) unless Revenue has issued a certificate of tax credits and standard rate cut-off point for the individual prior to the payment being made. USC would also be payable on any payments at the reduced rates applying to the over 70s (1% and 3% for 2016).
In this context, I am advised by the Revenue Commissioners that the individual in question should apply to her local Revenue Office for a certificate of tax credits and standard rate cut-off point in advance of withdrawing monies from her ARF. This will ensure that any such withdrawal is taxed at the individual's appropriate marginal rate of tax. To that end, she can contact Ms Suzanne Sheahan, Kerry District, Government Offices, Spa Road, Tralee, County Kerry Tel:066-7161000.
It is not possible to state with certainty what rate, or rates, of income tax will apply to amounts that this individual might withdraw from her ARF, as this will be determined by the amount of her income from all sources (including any amount withdrawn from the ARF) and her tax credits for the year or years in question. However, I am informed by the Revenue Commissioners that, for 2016, the first €33,800 of income will be taxed at 20%, with the balance being taxed at 40%.
I am advised by the Commissioners, that in the event that tax is charged in the first instance at the higher rate (in the absence of a tax credit certificate) in circumstances where the standard rate (20% for 2016) applies to some or all of the payment, a taxpayer can apply to Revenue for a repayment of any tax overpaid after the end of the tax year in question.
The individual could, of course, consider staggering the withdrawals from her ARF over a number of years so that tax is restricted to the standard 20% rate on any withdrawal. Indeed, to that end, she might also consider availing of the option to withdraw the maximum allowable 4% of the value of her AMRF in 2015 (which would be subject to tax and USC on the same basis as outlined above).
242. Deputy John Browne asked the Minister for Finance if he is aware that Irish insurers who provide Approved Retirement Funds are granted a tax advantage under the Irish-United Kingdom Double Tax Agreement which is not available to other non-insured Appointed Retirement Fund providers (details supplied); if he is satisfied that this practice accords with European Union law and does not amount to State aid; and if he will make a statement on the matter. [36165/15]
View answerI am informed by Revenue that, under the Ireland/United Kingdom Double Taxation Convention, and in common with double taxation agreements generally, a taxing right in respect of income and capital gains from immovable property is given to the Contracting State Ireland or the United Kingdom in which the property is situated. However, Article 14A of the Convention modifies this provision for income or gains from UK property paid to insurance companies in respect of their pension business: Such income will be exempt from UK tax if the income is tax-exempt in Ireland, and vice versa.
In that regard, I am advised by Revenue that subsection (5) of section 784A of the Taxes Consolidation Act 1997 specifically extends the scope of references to the pension business of insurance companies to include approved retirement funds (ARF's) provided by such companies. Subsection (2) of section 784A exempts income and chargeable gains arising in respect of assets held in an ARF from income tax and capital gains tax. These exemptions apply regardless of whether the ARF provider is an insurance company.
As regards the second part of the Deputy's question, the appropriate UK treatment under the Ireland/UK Convention of income and gains from UK property of an ARF that is not managed by an insurance company is a matter that is under consideration by her Majesty's Revenue and Customs and the Revenue Commissioners.
243. Deputy Derek Nolan asked the Minister for Finance the process required for Permanent TSB variable mortgage customers who wish to avail of the 1% cut in interest rates announced by the bank in July 2015; if there is a deadline date on this issue; and if he will make a statement on the matter. [36287/15]
View answerI have been informed by Permanent TSB that the SVR 'Switch' offering could save variable rate customers up to 80bps and not 1% as the Deputy has stated in the question. I have also been informed that there is no current deadline to avail of this offer.
As outlined in the Invite Letter which was provided to customers the process is as follows:
"To avail of this offer, customers must submit a completed application to permanent tsb to enable us to switch your current mortgage to an MVR mortgage. The application must be accompanied by a current valuation of your home and this Mortgage Rate Switch pack includes a property valuation voucher which you can use to instruct and pay your chosen local valuer selected from permanent tsb's panel of appointed valuers. The full list of appointed property valuers can be found on www.permanenttsb.ie/rateswitch or alternatively you can contact us on 1890 500 157 or visit your local permanent tsb branch."
The Deputy may also be aware that PTSB issued a press release on the 1st July 2015, which provides more detail around the potential rates available to customers based on specific pricing bands. A link to this press release is provided below:
https://www.permanenttsb.ie/about-us/news/july2015/changes-to-standard-variable-rate-mortgage-pricing/.
244. Deputy Finian McGrath asked the Minister for Finance if he will support a credit union (details supplied) in Dublin 13 with its concerns with the Consultation Paper 88 issued by the Central Bank of Ireland in November 2014; and if he will make a statement on the matter. [36329/15]
View answer283. Deputy Denis Naughten asked the Minister for Finance if he will postpone the signing of commencement orders for the Credit Unions and Co-operation with Overseas Regulators Act 2012, until the serious concerns raised by the credit union movement regarding the restrictions to be placed upon it, as outlined in the Central Bank of Ireland's Consultation Paper 88, are addressed; the time frame for the planned discussions between the Central Bank of Ireland and the credit union movement with regard to business model development within credit unions; and if he will make a statement on the matter. [36139/15]
View answerI propose to take Questions Nos. 244 and 283 together.
The Credit Union and Co-operation with Overseas Regulators Act 2012 was signed into law by the President in December 2012.
It was agreed at that time that it would be neither practical nor feasible to commence the Act in its entirety in one fell swoop. Following that, an implementation timetable for the 2012 Act was devised in consultation with stakeholders, including credit union representative bodies.
Commencement of all sections of the 2012 Act has been aligned with the credit union financial year and the introduction of the underpinning Central Bank regulations, with a view to implementation of the 2012 Act in a coherent and cohesive manner. This has provided credit unions with the time necessary to ensure that any required processes or procedures are in place prior to implementation of each tranche.
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.
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 has now contacted all credit unions inviting them to attend upcoming information seminars being held around the country from mid-November to end-November. These seminars will provide credit unions with the opportunity to engage with the Central Bank on the new regulations and to discuss development of the credit union business model, including any changes to the regulatory framework that might be required to facilitate those developments.
The purpose of the International Credit Union Regulators' Network (ICURN) review was to assess the performance of the Central Bank's performance of its regulatory functions in relation to credit unions. The review included a number of recommendations for refinements under the 3 broad areas: Supervisory Approach; Communications and Guidance; and Resources. Under the heading Communications and Guidance, ICURN also suggested that consideration be given by the relevant authority to directing a review to evaluate the implementation of the recommendations of the Commission on Credit Unions. ICURN further stated that this is not a matter for the Central Bank. As Minister for Finance I have no plans at this time to carry out such a review.
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.
245. Deputy Clare Daly asked the Minister for Finance the reason applicants reclaiming the personal tax credit in 2016 and 2017 following work done in their home under the home renovation incentive is conditional upon applying online as the Revenue commissioners are not accepting applications in writing; and if he will make a statement on the matter. [36334/15]
View answerThe Home Renovation Incentive was designed to be easy to apply for. Contractors can enter details of works carried out in the same manner as they already submit their tax returns, and homeowners can view details of the credit they will receive through PAYE anytime. The amount of credit due accumulates automatically as each set of works is carried out and the associated application is entered. In addition, this method of application was designed to support fully tax compliant builders and move activity out of the shadow economy into the legitimate economy, as all expenditure and relief claims have to be registered electronically. In order to provide further support for both individuals and contractors applying under the HRI, a number of guides and videos were published on the Revenue website to demonstrate the process necessary.
As of 30 September 2015, 37,992 works, carried out on 27,422 properties by 6,117 contractors have been registered on the system. To administer these claims through paper based applications would impose significant administration difficulties for Revenue.
The figures show that a number of properties have had several different qualifying works carried out, meaning that homeowners and contractors would have to complete several different applications for the credit under a paper based system. The provision of a central online register for such works means that the value of the tax relief available can be cumulated automatically for the benefit of the taxpayer.
246. Deputy Charlie McConalogue asked the Minister for Finance his plans to roll out the disabled drivers board of appeal officers to other regions given that when disabled persons are refused their primary medical certificate in the local Health Service Executive office, they are expected to travel to Dún Laoghaire for an appeal (details supplied); and if he will make a statement on the matter. [36354/15]
View answerI am informed by the Disabled Drivers Medical Board of Appeal that based on demand, clinics are held outside the Dublin area from time to time. In this regard, I am informed that one clinic per year has been held in Cork City over the past three years, and the Board plans to hold one in Cork in August or September of 2016.
Regulation 6(1)(e) of the Disabled Drivers and Disabled Passengers (Tax Concession) Regulations 1994 (S.I. 353 of 1994) mandates that the Medical Board of Appeal is independent in the exercise of its functions. Accordingly, I do not have a role in deciding where clinics are held.
247. Deputy Tony McLoughlin asked the Minister for Finance if the reduction of the rate of capital gains tax, from 33% to 20%, announced in Budget 2016 will be available to farmers forced to sell their land under compulsory purchase orders; and if he will make a statement on the matter. [36436/15]
View answerI am advised by the Revenue Commissioners that gains in respect of land acquired by way of a compulsory purchase order are chargeable to capital gains tax (CGT) at the rate of 33%. As the Deputy is aware, I announced in Budget 2016 that I am introducing a revised relief for entrepreneurs whereby a reduced rate of 20% will apply to gains on disposals of assets made on or after 1 January 2016 which have been used for the purposes of a business carried on by an individual up to an overall limit of €1m. Farmers whose land has been compulsorily acquired may qualify for the relief if they meet the conditions of the relief which will be set out in the Finance Bill to be published on 22 October.
248. Deputy Derek Nolan asked the Minister for Finance if the exemption level for inheritance tax will be applied from the date that the finalising probate is processed, as opposed to the date of the benefactor's death; and if he will make a statement on the matter. [36526/15]
View answerI am informed by the Revenue Commissioners that there are two important dates that are relevant for the taxation of an inheritance. These dates are used for different purposes and are mutually exclusive. Firstly, the date of death of a disponer is the date by reference to which the Group Thresholds and tax rates are determined. The Group Threshold is the value below which a gift or inheritance is not liable to tax in a given class of relationship such as parent to child. Therefore, whatever thresholds and rates are in force on this date apply for the purpose of taxing the value of an inheritance. These rules are based on statute and are strictly applied.
Secondly, the date on which probate or administration is granted is generally used as the 'valuation date'. This date has no effect whatever on the applicable Group Thresholds and tax rates. The valuation date is the date on which the market value of the assets/property comprising the inheritance is established. This market value is then compared to the relevant Group Threshold and the tax rate applied as appropriate on any excess of the market value over the threshold. This date also determines when any inheritance tax must be paid and a tax return must be submitted to Revenue.
249. Deputy Éamon Ó Cuív asked the Minister for Finance his plans to change the age of the Stamp Duty exemption for young farmers, from 35 years of age to 40 years of age, in line with the recent changes in the Common Agricultural Policy; and if he will make a statement on the matter. [36532/15]
View answerCurrently a young trained farmer is defined as being under 35 at the start of a tax year. The 2013 reform of the CAP introduced an age definition for a young farmer as a farmer under 40 years.
Any moves to bring existing measures into line with this definition will need new EU state aid approval and legislative change.
I have no plans to make any changes in this area at present. However, the matter will be kept under review with appropriate liaison between my officials and officials at the Department of Agriculture, Food and the Marine.
250. Deputy Olivia Mitchell asked the Minister for Finance his views on the request by the Irish League of Credit Unions to lift restrictions which prevent credit unions from providing broader banking services; if any changes are envisaged; and if he will make a statement on the matter. [36537/15]
View answerThe Credit Union and Co-operation with Overseas Regulators Act 2012 was signed into law by the President in December 2012.
It was agreed at that time that it would be neither practical nor feasible to commence the Act in its entirety in one fell swoop. Following that, an implementation timetable for the 2012 Act was devised in consultation with stakeholders, including credit union representative bodies.
Commencement of all sections of the 2012 Act has been aligned with the credit union financial year and the introduction of the underpinning Central Bank regulations, with a view to implementation of the 2012 Act in a coherent and cohesive manner. This has provided credit unions with the time necessary to ensure that any required processes or procedures are in place prior to implementation of each tranche.
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.
The Central Bank has informed me that it has now contacted all credit unions inviting them to attend upcoming information seminars being held around the country from mid-November to end-November. These seminars will provide credit unions with the opportunity to engage with the Central Bank on the new regulations and to discuss development of the credit union business model, including any changes to the regulatory framework that might be required to facilitate those developments.
In relation to the provision of additional services, where a credit union wishes to provide such services to its members, in addition to the services that are provided for under the Credit Union Act, 1997 (1997 Act), an application may be made to the Central Bank for approval to provide such additional services in accordance with the provisions set out in sections 48 to 52 of the 1997 Act.
The Central Bank has informed me that since 2010 it has received less than 10 applications for approval of additional services under sections 48 to 52 of the 1997 Act. These have all been received in recent months and are currently at a various stages of the approval process.
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.
251. Deputy Finian McGrath asked the Minister for Finance the amount of revenue that would be lost if Capital Gains Tax was reduced from 33% to 30%; and if he will make a statement on the matter. [36554/15]
View answerI am advised by the Revenue Commissioners that a wide range of statistical information is available on the Commissioners' Statistics webpage: http://www.revenue.ie/en/about/statistics/index.html.
In particular, in relation to the Deputy's Question, estimates for changing the rate of Capital Gains Tax are included in the Ready Reckoner on the Statistics webpage:
http://www.revenue.ie/en/about/statistics/ready-reckoner.pdf.
While the Ready Reckoner does not show the specific costings requested by the Deputy, the changes can be estimated broadly on a pro-rata (or straight-line) basis with those displayed in the Reckoner.
All estimates shown in the Ready Reckoner are provisional and subject to revision. These estimates are based upon an assumption that there would be no behavioural impact of these changes. In addition, the costs shown from decreases in taxation on assets relating to property are subject to movements in the value of such assets.
252. Deputy Jack Wall asked the Minister for Finance if there is a mechanism to claim relief for the payment of private tuition for a child, given the educational needs of the child; and if he will make a statement on the matter. [36556/15]
View answerThere is no provision in the tax code which allows for tax relief in respect of costs incurred in the provision of private tuition for a child.
Section 469 of the Taxes Consolidated Act 1997 provides for tax relief in respect of expenses incurred in the provision of health care. The Deputy may wish to note that this section provides for certain expenses which may be incurred in respect of the educational needs of a child aged under 18 years or of an adult who is in full-time education.
The services in question are either or both of the following:
1. Educational psychological assessment carried out by an educational psychologist, and
2. Speech and language therapy carried out by a speech and language therapist.
253. Deputy Michael McGrath asked the Minister for Finance further to Parliamentary Question No. 59 of 11 March 2015, which estimated the cost of extending, to the self-employed, an earned income tax credit equivalent to the Pay-As-You-Earn tax credit at €470 million, the reason the estimated cost in Budget 2016 of a €550 tax credit for the self-employed was only €18 million in 2016, and €61 million in a full year; and if he will make a statement on the matter. [36600/15]
View answer254. Deputy Michael McGrath asked the Minister for Finance the number of persons who are projected to benefit in 2016 from the introduction of an earned income tax credit; and if he will make a statement on the matter. [36601/15]
View answerI propose to take Questions Nos. 253 and 254 together.
Regarding the cost of an earned income tax credit, I am advised by the Revenue Commissioners that the €470 million estimated cost of extending the Pay As You Earn (PAYE) credit, provided in response to Parliamentary Question No. 59 of 11 March 2015 was based on extending the €1,650 credit to all non-PAYE cases including Schedule D, Proprietary Directors and assisting spouses. In addition, the estimate included cases classed as Schedule D where most of their gross income is non-PAYE. Some of these cases may have been availing of the PAYE credit. The estimate did not take into account the ability of the credit to be fully absorbed. On this basis it was estimated that the credit would be available to approximately 284,600 cases.
The estimated cost to the Exchequer of the €550 Earned Income Credit (EIC) was calculated on the basis that it would be only available to taxpayers earning self-employed trading or professional income under Cases I, II and III of Schedule D and to business owner/managers who are ineligible for a PAYE credit on their salary income. This cost is also based on an assumption that where a person may qualify for both a PAYE Credit and an EIC, the maximum credit available will be €1,650.
In addition, it should be noted that the March costing was based on estimated incomes for 2015. Pre-Budget costings are on the basis of estimated incomes for 2016. This should also be considered when comparing the two.
The Deputy may also wish to note the reply to his PQ, No. 65 of 1 October, which estimated the cost of introducing an Earned Income Credit of €1,650 for self-employed people at €137 million. For the purposes of this estimate, as specified in the response, it was assumed that the credit would only be extended to cases identified to be in receipt of Trading or Professional (Case I or Case II) income, and not currently in receipt of the PAYE credit. The estimate did not take into account the ability of the credit to be fully absorbed.
In relation to the number of persons who are projected to benefit in 2016 from the introduction of an earned income tax credit, I am advised by the Revenue Commissioners that, based on the approach outlined above to estimate the cost to the Exchequer of the €550 Earned Income Credit (EIC), it is estimated that this credit would be available to approximately 111,600 cases.
255. Deputy Michael McGrath asked the Minister for Finance the cost in 2016 and in a full year of exempting an additional 42,000 income earners from the universal social charge; and if he will make a statement on the matter. [36602/15]
View answer258. Deputy Michael McGrath asked the Minister for Finance the cost in 2016 and in a full year of reducing the 1.5% rate of the universal social charge to 1%; and if he will make a statement on the matter. [36605/15]
View answer259. Deputy Michael McGrath asked the Minister for Finance the cost in 2016 and in a full year of reducing the 3.5% rate of the universal social charge to 3% and increasing the range of income it covers; and if he will make a statement on the matter. [36606/15]
View answer260. Deputy Michael McGrath asked the Minister for Finance the cost in 2016 and in a full year of reducing the 7% rate of the universal social charge to 5.5%; and if he will make a statement on the matter. [36607/15]
View answerI propose to take Questions Nos. 255 and 258 to 260, inclusive, together.
I am informed by the Revenue Commissioners that the estimated first and full year cost to the Exchequer of exempting an additional 42,000 income earners from the Universal Social Charge (USC), is in the region of €8 million and €11 million respectively.
The estimated first and full year cost to the Exchequer of reducing the 1.5% USC rate to 1% is in the order of €89 million and €121 million respectively.
In relation to reducing the 3.5% USC rate to 3%, the estimated first and full year cost to the Exchequer is in the order of €49 million and €66 million respectively.
In response to the question of reducing the 7% USC rate to 5.5%, the estimated first and full year cost to the Exchequer is in the order of €397 million and €546 million respectively.
The Deputy will note that these costings do not take into account the full range of changes to the USC announced in Budget 2016.
All figures provided above are based on the pre-Budget 2016 USC structure, including band thresholds, and are estimates for 2016 incomes from the Revenue tax forecasting model using latest actual data for the year 2013, adjusted as necessary for income, self-employment and employment trends in the interim. They are provisional and may be revised.
256. Deputy Michael McGrath asked the Minister for Finance the reason the Government did not fulfil the commitment, made at the time of the Spring statement, to exempt an additional 90,000 income earners from the Universal Social Charge; and if he will make a statement on the matter. [36603/15]
View answerI announced in my Budget speech last week that the entry point to the Universal Social Charge (USC) is being increased to €13,000 per annum from 1 January next. It is estimated that over 700,000 income earners will not be liable for USC at all from next year. The entry point to the USC was €4,004 when I came into Government and this is my third occasion to increase the entry point - it was increased to €10,036 with effect from 2012, and to €12,012 from the tax year 2015.
The increase in the entry point was just one element of a package of measures designed to reward work.
The reform of the USC system which saw the bottom three rates reduced by between 0.5 and 1.5 percentage points, the decision to accept the proposals of the low pay commission and increase the minimum wage by 50 cent per hour from the 1st of January, the increase of the Family Income Supplement, the introduction of the PRSI credit for low earners and the increase in Child Benefit were key elements of this package of measures.
Looking at the package as a whole, I think that we struck the correct balance and that keeping 700,000 individuals, or 29% of income earners, exempt from the charge was appropriate.
As the Deputy will be aware, the numbers liable to USC are not constant and are affected by economic conditions generally. As the economy continues to improve, incomes increase and new jobs are created. These factors have the effect of increasing the numbers earning in excess of the entry point to the USC, and thus more income earners are brought within the scope of the USC.
The changes announced in Budget 2016 will see all those who pay USC in 2015 benefitting from a reduction in their USC bill next year for the same level of income.
257. Deputy Michael McGrath asked the Minister for Finance if his Department has estimated the number of persons who are entitled to the Home Carer tax credit, but who have not applied for it; how awareness of the tax credit can be increased; and if he will make a statement on the matter. [36604/15]
View answerThe Home Carer Tax Credit may be claimed by a married couple or civil partners where one spouse or civil partner (the 'Home Carer') cares for one or more 'dependent persons'.
I am advised by Revenue that ordinarily a claim for the credit must be made by the individual, either by claiming it on-line using Revenue's PAYE Anytime service, or by completing a claim form or in the person's annual tax return. However in the case of PAYE taxpayers, Revenue has, for a number of years, taken steps to automatically allow the credit without the person having to make a claim, wherever possible. For example, Revenue uses data it receives from the Department of Social Protection in relation to child benefit, together with other data from Revenue's own records, to automatically grant the credit each year. In 2015, I am advised that Revenue gave the relief automatically to approximately 81,000 taxpayers on this basis. Revenue also pre-populates the annual tax returns of self-assessed taxpayers with the Home Carer Tax Credit where it was claimed in the previous year. As regards the increase in the Home Carer Tax Credit announced by me in last week's Budget, this information is included in Revenue's Summary Budget leaflet published on its website.
I am further advised by Revenue that it has no information in relation to numbers of cases who have not applied for the credit. However, a wide range of statistical information is available on the Revenue Statistics webpage at http://www.revenue.ie/en/about/statistics/index.html. There is a section of that webpage dedicated to Tax Expenditures at http://www.revenue.ie/en/about/statistics/index.html#section9, where the table titled "Costs of Tax Expenditures (Credits, Allowances and Reliefs)" includes information in relation to the numbers availing of, and costs of the credit. The most recent figures relate to 2013 and updates will be published in due course.
