Written Answers Nos. 235-248
235. Deputy Pearse Doherty asked the Minister for Finance the number of completed restructured arrangements and the figure, under the mortgage arrears resolution targets, that involved the loss of the family home. [1354/16]
View answerThe Deputy will be aware that the Central Bank of Ireland (Central Bank) publishes the Residential Mortgage Arrears and Repossession Statistics series on a quarterly basis which provides a comprehensive overview of the entire Irish mortgage market including information on arrears broken down by duration; legal proceedings and repossessions; restructure arrangements broken down by type; and the performance of restructured mortgage accounts. Data is provided by all entities that hold loans secured on properties located in the Republic of Ireland including inter alia bank and non-bank entities.
The most recent series (Q3 2015 data) was published by the Central Bank on 11 December 2015 and can be accessed at http://www.centralbank.ie/polstats/stats/mortgagearrears/Documents/2015q3_ie_mortgage_arrears_statistics.pdf. A total stock of 120,806 PDH mortgage accounts were categorised as restructured at end Q3 2015, reflecting an increase of 1.9% when compared with the previous quarter. Split mortgages and arrears capitalisations accounted for 20% and 28.1% of the total PDH restructures respectively, and showed significant increases over the quarter. Reliance on interest only arrangements and reduced payment arrangements fell further during Q3, a common trend over recent quarters. 86.6% of PDH restructures were deemed to be meeting the terms of their arrangement at end Q3 2015, an improvement on the previous quarter.
During Q3, legal proceedings were issued to enforce the debt/security on a PDH mortgage in 1,687 cases. There were 798 cases where court proceedings concluded but arrears remained outstanding. In 329 cases the Courts granted an order for repossession or sale of the property.
It should be noted that the above details relate to all entities that hold loans secured on properties located in the Republic of Ireland including inter alia bank and non-bank entities. It does not relate to information on the Mortgage Arrears Resolution Targets (MART), which were in effect from March 2013 to December 2014. Information on performance against MART was also publically reported in the Central Bank's Q3 2015 release. While the MART sustainability targets include a significant number of accounts in arrears which are part of a legal process, accounts that are the subject of a legal process are not classified as restructured within the Mortgage Arrears Statistics and arrears associated with such accounts are recorded in full in the data.
236. Deputy Pearse Doherty asked the Minister for Finance the level of competition in the motor insurance industry and the steps he is considering to prevent further increases in this area. [1355/16]
View answerAs Minister for Finance, I am responsible for the development of the legal framework governing financial regulation. The Central Bank of Ireland, as regulator, is responsible for prudential supervision of insurance companies.
I am aware of continued reports on the increasing cost of motor insurance. However, the ability of the Government to influence insurance costs is limited as insurance companies are required under European law to price in accordance with risk and neither I, as Minister for Finance, nor the Central Bank of Ireland have the power to direct insurance companies on the pricing of insurance products. The provision and the pricing of insurance policies is a commercial matter for insurance companies.
Insurance companies have to 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 this regard, it should be noted that the new prudential regime for insurers across the EU known as Solvency II, which came into force from the start of 2016, places a greater emphasis on the need to price risk appropriately, and in turn requires insurance companies to be more conscious of their pricing policy. This should benefit the consumer in many instances.
The Central Bank advises me that competitive conditions within the insurance market intensified in recent years and many firms' focus on maintaining market share provided impetus to lower premiums. Competition on premiums was subsidised by investment and other income. Recent reversals in investment markets have generated investment losses that are a drag on profitability. In the view of the Central Bank, the recent premium increases will serve to restore core underwriting profitability and to secure the financial position of the firms concerned for the longer term.
The question of the cost of insurance is a complex one involving a number of Government Departments, State Bodies and private sector organisations. I have asked my officials to examine the factors whic contribute to increasing costs of insurance. This work will continue over the coming months and will involve engagement with a number of parties, both public and private.
237. Deputy Paul Murphy asked the Minister for Finance if the tax reliefs available under the disabled drivers and disabled passengers scheme can still be availed of if the vehicle is used as a taxi, if restrictions apply, and if so, if he will outline them. [1362/16]
View answerI am informed by the Revenue Commissioners that the Disabled Drivers and Disabled Passengers (Tax Concessions) Regulations, 1994 (S.I. 353 of 1994), which provide for certain reliefs from VRT and VAT at the time of registration, do not prevent use of a qualifying vehicle as a taxi, provided that all other conditions of the Scheme are complied with.
238. Deputy Dara Calleary asked the Minister for Finance the discussions his Department has had with suppliers or service contractors to his Department or to agencies of his Department to ensure that employees of such suppliers and contractors are paid the living wage of €11.50 per hour; the cost of implementing this wage for these employees; and if he will make a statement on the matter. [1372/16]
View answerIn response to the Deputy's query, it is important that Ireland's statutory National Minimum Wage and the Living Wage concept are not merged together. The Living Wage is a voluntary societal initiative centred on the social, business and economic case to ensure that, wherever it can be afforded, employers will pay a rate of pay that provides an income that is sufficient to meet an individual's basic needs, such as housing, food, clothing, transport and healthcare. The Living Wage is voluntary and has no legislative basis and is therefore not a statutory entitlement and cannot be imposed on suppliers or contractors.
It is different to the National Minimum Wage which is a statutory entitlement and has a legislative basis. This Government established the Low Pay Commission to annually assess the appropriate level of the National Minimum Wage. The national minimum hourly rate of pay increased to €9.15 per hour on January 1st this year following Government acceptance of the Low Pay Commission recommendation of July 2015 to increase the rate from €8.65 per hour.
Separately, wage rates and other conditions of employment are provided for in Employment Regulation Orders for the Contract Cleaning and Security sectors. These statutory Orders came into effect on October 1st 2015 and provide for minimum rates in excess of the National Minimum Wage, with €10.75 per hour payable to workers in the Security sector and €9.75 per hour payable to workers in the Contract Cleaning sector.
Statutory minimum rates of pay may also be supplemented by social transfers such as Child Benefit, Family Income Supplement or health, education or housing assistance payments where the need arises and to reflect family circumstances.
My Department has not had any discussions with suppliers or service contractors in relation to the Living Wage. However, I can confirm that my Department adheres to all appropriate current wage legislation.
239. Deputy Catherine Murphy asked the Minister for Finance the number of deferrals on payment of property tax granted in 2015; the total amount involved; the interest rate applicable to such deferrals; the period for which deferrals were permitted; and if he will make a statement on the matter. [1420/16]
View answerI am advised by Revenue that Part 12 of the Finance (Local Property Tax) Act 2012 (as amended) provides for Deferral, and Partial Deferral (50%) schemes that can apply to liable property owners under certain conditions including, 'Income Level', 'Hardship', 'Personal Insolvency' and 'Personal Representative of a Deceased Person'.
Additionally, Revenue also recently announced that it is making the Deferral and Partial Deferral relief available for the 2016 LPT tax year to property owners whose principal private residence was flooded during the recent bad weather. The relief is available to the people affected, regardless of whether they qualify under the normal criteria, provided they are in receipt of assistance through the Department of Social Protection Humanitarian Relief Fund.
Revenue granted 29,600 Deferrals/Partial Deferrals in respect of the 2015 LPT tax year to the value of €7.1m. The deferred tax remains as a charge on the properties in question and will have to be paid before a sale or transfer can be completed. Interest is charged on the deferred amounts at a rate of 4% per annum.
In general, the duration of deferrals coincides with the valuation period, which currently extends from 1 May 2013 to 31 October 2019, arising from the recent legislative amendments. However, Revenue may consider shorter or longer periods depending on the specific circumstances of individual cases or property owners may at any time pay the deferred tax or part of the tax if it suits them to do so.
240. Deputy Billy Timmins asked the Minister for Finance further to previous Parliamentary Questions (details supplied), what the impact would be if all income under €30,000 received a basic additional income of €3,600; and if he will make a statement on the matter. [1446/16]
View answerI understand, following clarification with Deputy Timmins, that the Deputy is seeking an estimate of the cost to the Exchequer of providing a basic additional income of €3,600 to those who currently earn under €30,000.
On this basis, I am advised by the Revenue Commissioners that there are an estimated 1,232,000 income earners whose gross income is €30,000 or less. The estimated cost of increasing this cohort of income earners' gross income by €3,600 would be in the order of €4,435 million.
These figures are estimates 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 estimated by reference to 2016 incomes and are provisional and may be revised.
The number of cases reflects the number of tax units. A married couple or civil partners who have elected or have been deemed to have elected for joint assessment are counted as one tax unit.
It should be noted that cases in receipt of no income or of only certain social welfare payments do not appear on Revenue records and are therefore not included in the figures above.
241. Deputy Pearse Doherty asked the Minister for Finance the status of the liquidation process of the Setanta Insurance company; if liability with respect to the payment of all outstanding claims has been determined; and if he will make a statement on the matter. [1454/16]
View answerThe liquidation of an insurance company is a legally complex process. Setanta is a Maltese incorporated company and, therefore, the Setanta liquidation is being carried out under Maltese law.
Progress in the liquidation of Setanta Insurance has been awaiting the outcome of legal proceedings in the case of the Law Society of Ireland versus the Motor Insurers' Bureau of Ireland (MIBI). On 4th September 2015, the High Court held that the MIBI is liable in respect of claims against the policy holders of Setanta. This decision is currently being appealed by the MIBI and the appeal hearing took place yesterday and continues to be heard today (12th & 13th January 2016). As this case is sub-judice, there are certain matters which I am not in a position to comment on at this time. Thus, I am responding to the Deputy's question as best as I can within these constraints.
The Liquidator for Setanta has informed me that:
- The number of open claims was 1,696 as at 30th November 2015.
- The claims reserves position stands at between €87.7 million and €95.2 million.
- The Liquidator is continuing to accept new claims up until May 2016, two years after the insurance policies issued by Setanta were cancelled.
- Final settlements can only be paid out after all of the company's liabilities are quantified, including claims.
- The Liquidator reports that it is proving difficult to settle claims in advance of the outcome of the MIBI appeal.
I expect to be in a better position to inform the House after the legal proceedings are concluded and the implications of the outcome have been assessed.
242. Deputy Tom Fleming asked the Minister for Finance why the banks not only charge variable rate mortgage customers a multiple of the tracker mortgage rate but also charge a multiple of other European variable mortgage rates; if he is unable to change the rate, if he will introduce a tax credit to make up the difference for borrowers; and if he will make a statement on the matter. [1509/16]
View answerFirstly, I would like to confirm to the Deputy that the lending institutions in Ireland - including those in which the State has a shareholding - are independent commercial entities. I, as Minister for Finance, have no statutory role in relation to regulated financial institutions passing on the European Central Bank interest rate change or in relation to the mortgage interest rates charged.
The mortgage interest rates that financial institutions operating in Ireland charge to customers are determined as a result of a commercial decision by the institutions concerned. This interest rate is determined taking into account a broad range of factors including European Central Bank base rates, deposit rates, market funding costs, the competitive environment and an institution's overall funding.
The current interest rates in Ireland are also determined by nationally specific features such as increased credit risk resulting from high levels of non-performing loans and lengthy and uncertain processes of collateral recovery, weak competition, and the constraints on bank profitability arising from legacy issues of the financial crisis, such as an increased regulatory requirement for capital.
Nonetheless, I have taken steps to ensure that the banks provide options for mortgage holders to reduce their monthly repayments. Last May, I requested a report from the Central Bank on the topic which was subsequently published. I also met with the six main mortgage lenders in May and outlined my view that the standard variable rate being charged to Irish customers was too high. 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.
In September I concluded a series of follow up meetings with these banks and the reality is that the majority have put options in place to allow many borrowers reduce their repayments. These options range from lower variable rates to new suites of variable rates based on loan-to-value and reductions in fixed rates. I therefore encourage borrowers to contact their bank to see what is available to them in their circumstances or consider moving to another bank, where possible, if the offer is not satisfactory. In this regard, the Competition and Consumer Protection Commission (CCPC) website www.consumerhelp.ie is a valuable source of information on the rates charged by various financial institutions. In addition, the CCPC are currently running a mortgage switching campaign and have a mortgage switching tool on their website which should allow borrowers compare rates charged across institutions. I also note that some lenders offer repayment of legal fees or cash incentives to borrowers switching mortgage provider.
I asked the banks to provide options by which borrowers could reduce their monthly repayments and I believe options have been put in place. Furthermore, I am pleased to see that new initiatives and reductions continue to take place. As recently as last week one bank introduced a 0.5% reduction on managed variable rates for new or switcher mortgages with a loan to value of 80% or less. Another bank reduced its SVR in December. These initiatives illustrate the increasing competitive dynamics in the market.
I note that the Central Bank's statistical release of 11th December 2015 stated that mortgage interest rates generally declined during the third quarter of 2015. Variable Principal Dwelling House (PDH) rates declined by 17 basis points over the second quarter with corresponding Buy-to-Let (BTL) rates falling by 14 basis points during the same period.
The Deputy will be aware that mortgage interest relief has been abolished for homes purchased since 1 January 2013. Up until 2018 however, tax relief continues to be available for interest paid on all qualifying home loans taken out on or after 1 January 2004 and on or before 31 December 2012, regardless of whether the individuals concerned are first-time buyers or non-first-time buyers.
243. Deputy Niall Collins asked the Minister for Public Expenditure and Reform why properties (details supplied) in County Limerick are vested in him under the State Property Act 1954; his plans for these properties; the property management actions he has taken in relation to these properties; and if he will make a statement on the matter. [46499/15]
View answerYou will be aware that I have recently replied to Deputy Dan Neville T.D. on this matter also (PQ 45842/15 refers).
Section 28(2) of the State Property Act, 1954 provides for the personal property and land vested in or held in trust by a body corporate immediately prior to its dissolution (other than personal property or land held by such body upon trust for another person ) to become the property of the State, until such time as the company is restored to the Register or the Minister for Public Expenditure and Reform waives the interest vested in him. The Commissioners of Public Works in Ireland administer applications for waivers under the 1954 Act.
I am informed by the Commissioners that the company involved in the development of the housing estate at Cois na Féile was dissolved prior to the completion of the project. A previous application was received by the Commissioners from Clúid Housing, who own 12 units in the development, seeking a waiver of the common areas of the site to enable completion of the site works and related services. The waiver was granted to Clúid Housing in June 2015.
My officials inform me that Limerick City and County Council are engaging with them on the waiver process in relation to the remaining nine vacant properties, with a view to informing the most appropriate approach to be taken. The Chief State Solicitor's Office is being consulted on the matter.
244. Deputy Michael Healy-Rae asked the Minister for Public Expenditure and Reform the status of funding for clearing the Flesk River, County Kerry (details supplied); and if he will make a statement on the matter. [46523/15]
View answerThe river referred to by the Deputy does not form part of any Arterial Drainage Scheme which would fall under the remit of the Office of Public Works (OPW) under the 1945 Arterial Drainage Act. The OPW therefore has no responsibility for the maintenance of this river.
Glenflesk is one of 300 locations nationwide that is being assessed under the OPW's Catchment Flood Risk Assessment and Management (CFRAM) Programme the purpose of which is to implement the EU Floods Directive and national flood policy. The Programme involves the production of predictive flood risk and hazard mapping for each location, the development of appropriate and viable preliminary flood risk management options and the production of flood risk management plans. Under the South Western CFRAM Study, draft predictive flood maps for Glenflesk have been produced and were the subject of a Public Consultation Day in Glenflesk on 21 October 2014. Following the conclusion on 23 December 2015 of the national statutory public consultation on the draft flood maps, the maps will be finalised in early 2016. Work on the Preliminary flood risk management options phase of the CFRAM Study is underway. In that regard, a Public Consultation Day was held in Glenflesk on 8 December 2015. Further information is available on the South Western CFRAM Study website www.southwestcframstudy.ie. Flood Risk Management Plans are expected in mid 2016 for public consultation.
Local flooding issues are a matter, in the first instance, for each Local Authority to investigate and address, and Kerry County Council may carry out flood mitigation works using its own resources. The Office of Public Works operates a Minor Flood Mitigation Works and Coastal Protection Scheme. This administrative Scheme's eligibility criteria, including a requirement that any measures are cost beneficial are published on the OPW website, www.opw.ie. It is not available for repair of damaged infrastructure or for maintenance of existing flood defence or coastal protection assets.
245. Deputy Bernard J. Durkan asked the Minister for Public Expenditure and Reform the extent to which funding will be made available to facilitate the various and ongoing flood alleviation and drainage proposals throughout County Kildare, with particular regard to the beneficial impact of the work to date and the need for a satisfactory conclusion of the programme as put forward by Kildare County Council; and if he will make a statement on the matter. [1267/16]
View answerI am advised that there are no specific outstanding flood alleviation/drainage proposals submitted by Kildare Co. Council that request funding by the Office of Public Works (OPW) at this time, other than the proposed Lower Morrell River Flood Relief Scheme, of which, the Deputy is aware. However, the OPW and KCC continue to work in close consultation on the development of the Catchment Flood Risk Assessment and Management (CFRAM) plans for areas of Kildare designated as Areas for Further Assessment or AFAs under the East CFRAM study. Those plans, due to be completed in mid 2016, will identify preferred options for flood alleviation measures as necessary. The implementation of these measures will be considered in due course by the OPW and KCC. The Government's Capital Investment Plan 2016 – 2021 includes total funding of €430m over the period of the Plan for the cost of implementing the schemes and measures that will emerge from the CFRAM process.
As the Deputy is aware, KCC, in consultation with the OPW, engaged Consulting Engineers to carry out a Full Feasibility Study, Cost Benefit Analysis (CBA), and Environmental Impact Statement (EIS) on the Lower Morrell River and the surrounding River Catchment in an effort to resolve the outstanding localised flooding issues in the Straffan area. A Steering Group which comprises representatives of KCC, OPW and the consultants, was set up to advance the project.
KCC and their consultants submitted a Draft Options Report /Feasibility Study to the OPW outlining possible flood relief measures for the Lower Morrell River Catchment in 2014. Following consideration of the draft report by the OPW, it was agreed by the Steering Group that the consultants would carry out a more detailed review of the proposed scheme with further analysis of the various options considered to assess the benefits of the current works proposals as they have evolved. The review would also investigate if there are additional or alternative and more cost effective measures that can be put in place to alleviate flooding in the area. Any changes identified by the review process would need to be incorporated into the Cost Benefit Analysis and Environmental Impact Statement before the scheme can be advanced.
I am advised that the consultants have completed the review process and KCC has submitted their findings to the OPW for consideration. The OPW and KCC will meet later this month with a view to finalising the Feasibility Report. Once the Feasibility Report has been finalised, and provided the scheme is still economically and environmentally viable, KCC and the OPW will decide on how best to advance the proposed works. The OPW has included provision for the cost of the proposed works in its financial profiles in the period up to 2018.
246. Deputy Thomas P. Broughan asked the Minister for Public Expenditure and Reform if any future forecasting will include tidal flooding as well as river flooding; if future forecasting will include areas of past flooding; and if he will make a statement on the matter. [1396/16]
View answerThe Government has agreed to the establishment of a flood forecasting and warning service.
A Flood Forecasting and Warning Service is regarded as an important non-structural flood mitigation measure. It will provide early warning that will allow the general public and local authorities to take more effective preventive action to mitigate the impacts of an impending flood.
The Office of Public Works (OPW) commissioned the Report of the Strategic Review of Options for Flood Forecasting and Flood Warning in Ireland that has set out a range of options and possible approaches for the development of a National Flood Forecasting and Warning Service. This Report confirms international experience and indicates that the provision, operation and maintenance of forecasting and warning services is resource-intensive, complex and has a relatively long development timeline.
The Flood Forecasting and Warning Service would be a new operational unit within Met Éireann with guidance for standards and performance independently overseen by the OPW.
The intention is that a Steering Group will be convened, including representatives from the OPW, the Department of Environment, Community and Local Government, Met Éireann, Local Authorities to steer, support and oversee the establishment of the new service over the coming years, as well as maintaining the current arrangements until the new service is in place. The service will be nationwide and it is expected that flooding from tidal (coastal) sources will form part of the early discussions of this Steering Group.
247. Deputy Jack Wall asked the Minister for Public Expenditure and Reform the status of the catchment flood risk assessment and management proposal for a town (details supplied) in County Kildare; and if he will make a statement on the matter. [1482/16]
View answer248. Deputy Jack Wall asked the Minister for Public Expenditure and Reform the status of the catchment flood risk assessment and management proposals for County Kildare, including the locations they relate to; and if he will make a statement on the matter. [1483/16]
View answerI propose to take Questions Nos. 247 and 248 together.
Good progress is being made on the national Catchment Flood Risk Assessment and Management (CFRAM) Programme which is the principal vehicle for implementing the EU Floods Directive and forms the strategic focus of national flood risk management policy. Engineering consultants have been appointed by the Office of Public Works (OPW) to implement the Programme, through six regional studies. Local authorities and other stakeholders are involved, in partnership with the OPW, on Steering Groups and Progress Groups across the six study areas.
The Programme is focusing on 300 Areas for Further Assessment (AFAs), including 90 coastal areas, identified as being at potentially significant risk from flooding. Two CFRAM studies, the Eastern and the South Eastern, cover the 15 AFAs within Co. Kildare namely Celbridge, Clane, Johnstown Bridge, Kilcock, Leixlip, Maynooth, Naas, Newbridge, Turnings/Killeenmore (Morrell Scheme), Allenwood, Athy, Castledermot, Monasterevin, Rathangan and Suncroft.
The Programme involves the production of predictive flood hazard and risk mapping for each location, the development of preliminary flood risk management options and the production of Flood Risk Management Plans. The Plans will be used to determine national priorities for State investment in flood defences, on a systematic and objective basis taking into account social, environmental and economic factors.
Under the CFRAM Programme to date, draft flood maps have been produced and were the subject of a series of local Public Consultation Days which concluded in April, 2015. The draft flood maps will now be finalised following the conclusion of the national statutory public consultation on 23 December, 2015. Work on the next phase, assessment of preliminary flood risk management options is underway. In this regard, a series of Public Consultation Days will be held over the coming months, including one in Athy, to allow the public to view the preliminary options available and provide feedback on them.
Following the finalisation of the flood mapping and the identification of appropriate and viable preliminary flood risk management options, the final output from this important project will be integrated Flood Risk Management Plans containing specific measures to address in a comprehensive and sustainable way the significant flood risks identified. Further information is available on the individual project websites accessible via www.cfram.ie.
