Thursday, 14 Dec 2017

Written Answers Nos 62-90

Primary Medical Certificates Eligibility

Questions (62)

Brendan Smith

Question:

62. Deputy Brendan Smith asked the Minister for Finance his plans to improve the criteria in respect of the primary medical certificate; and if he will make a statement on the matter. [53947/17]

Written answers

Minister for Finance

The Disabled Drivers and Disabled Passengers (Tax Concessions) Scheme provides relief from VAT and VRT on the purchase of an adapted car for transport of a person with specific severe and permanent physical disabilities, payment of a fuel grant, and an exemption from Motor Tax.

To qualify for the Scheme an applicant must be in possession of a Primary Medical Certificate. To qualify for a Primary Medical Certificate, an applicant must be permanently and severely disabled within the terms of the Disabled Drivers and Disabled Passengers (Tax Concessions) Regulations 1994 and satisfy one of the following conditions:

- be wholly or almost wholly without the use of both legs;

- be wholly without the use of one leg and almost wholly without the use of the other leg such that the applicant is severely restricted as to movement of the lower limbs;

- be without both hands or without both arms;

- be without one or both legs;

- be wholly or almost wholly without the use of both hands or arms and wholly or almost wholly without the use of one leg;

- have the medical condition of dwarfism and have serious difficulties of movement of the lower limbs.

I recognise the important role that the Scheme plays in expanding the mobility of citizens with disabilities. From time to time representations are received from individuals who feel they would benefit from the Scheme but do not qualify under the six criteria. While I have sympathy for these cases, given the scale and scope of the Scheme, I have no plans to expand the medical criteria beyond the six currently provided for in the Disabled Drivers and Disabled Passengers (Tax Concessions) Regulations 1994.

Tax Reliefs Costs

Questions (63, 64)

Timmy Dooley

Question:

63. Deputy Timmy Dooley asked the Minister for Finance the estimated cost of extending the VRT rebate for electric vehicle purchase until 2019 to 2023, respectively. [54080/17]

Timmy Dooley

Question:

64. Deputy Timmy Dooley asked the Minister for Finance the estimated cost of extending the VRT rebate for hybrid vehicle purchase until 2019 to 2023, respectively. [54081/17]

Written answers

Minister for Finance

I propose to take Questions Nos. 63 and 64 together.

As I informed the Deputy in the reply to PQ 50963/17 on 29 November 2017 Revenue does not have information to enable it provide an accurate forecast of the future growth of electric and hybrid vehicles. As such it is not possible to determine the cost of extending the VRT rebate to electric and hybrid vehicles until 2019 or beyond that year.

Revenue have estimated the cost of the Vehicle Registration Tax (VRT) rebate for electric vehicles and hybrid vehicles in 2017 to be €5 million and €10 million respectively, giving a total estimated cost of €15 million for the year.

Community Banking

Questions (65, 67)

Eamon Ryan

Question:

65. Deputy Eamon Ryan asked the Minister for Finance if his Department has provided a report on the Sparkassen public banking model; and his views on whether there could be a role for such a public banking system to assist small and medium enterprises. [53818/17]

Catherine Martin

Question:

67. Deputy Catherine Martin asked the Minister for Finance his views on the introduction of a public bank model, similar to the German Sparkassen model; and if he will make a statement on the matter. [53550/17]

Written answers

Minister for Finance

I propose to take Questions Nos. 65 and 67 together.

As the Deputy will be aware, my Department and the Department of Community and Rural Development, are responsible for fulfilling the Programme for a Partnership Government commitment to "thoroughly investigate the German Sparkassen model for the development of local public banks that operate within well-defined regions".

Local public banking is where a State, or other public body, has ownership of a financial institution. Local public banks in Germany are called Sparkassen. They are only permitted to operate in specific geographic regions. Their aim is also not to maximise profits, but rather promote economic development and financial inclusion in the regional area in which they operate. Additionally, the business model of Sparkassen involves building close relationships with local SMEs.

The investigation of local public banking has consisted of a consultation process with stakeholders and interested parties. There has also been analysis of a detailed proposal on the Sparkassen model and its possible implementation in Ireland. This proposal was put forward by Irish Rural Link and the Savings Banks Foundation for International Cooperation (SBFIC), the international development wing of the Sparkassen group.  There have been a number of meetings between their representatives and my officials.

Officials in my Department have been working closely together with their colleagues in the Department of Community and Rural Development. They have now finalised the report on the findings of their investigation and I have received this report and am currently reviewing and considering it.

Along with my colleague, the Minister for Rural and Community Development, Michael Ring T.D., I will bring this report to Government, for approval.

The Deputy may wish to note that there are already significant Government measures in place to support access to finance by Irish SMEs.  These include the Strategic Banking Corporation of Ireland (SBCI), the Supporting SMEs Online Tool, the Microenterprise Loan Fund, Local Enterprise Offices, the Credit Review Office and the Credit and Counter Guarantee Schemes.

Additionally, my Department is working with other Government departments to develop tailored and innovative schemes to meet the evolving needs of Irish SMEs, such as the Agricultural Cashflow Support Loan Scheme and the Brexit Loan Scheme I announced in Budgets 2017 and 2018 respectively.

VAT Rate Application

Questions (66)

Catherine Murphy

Question:

66. Deputy Catherine Murphy asked the Minister for Finance the way in which VAT is calculated on unredeemed gift vouchers; if a calculation has been done on VAT foregone; if so, the amount for 2016; and if he will make a statement on the matter. [53530/17]

Written answers

Minister for Finance

As a consumption tax, VAT is a tax that is paid by the final consumer on the purchase of a good or service. Where a gift voucher is used by a consumer as consideration in respect of or in relation to the purchase of a good or service, VAT becomes chargeable on that purchase at the rate applicable for the particular good or service supplied, which could be 0%, 9%, 23%, or no VAT if an exemption applies. No loss of VAT arises where gift vouchers are not redeemed as no supply of goods or services has taken place.

Revenue has no estimate of the amount of VAT that would accrue to the Exchequer if unredeemed gift vouchers were in fact used.

Question No. 67 answered with Question No. 65.

Help-To-Buy Scheme Data

Questions (68)

Kevin O'Keeffe

Question:

68. Deputy Kevin O'Keeffe asked the Minister for Finance the number of applications that have been received to date under the help-to-buy incentive scheme; and the number of applications that have been successful. [53559/17]

Written answers

Minister for Finance

I am advised that Revenue publishes a monthly update on the Help to Buy (HTB) scheme on the Revenue website.  The most recent update to 30 November 2017 in respect of applications, both approved and pending, and claims made can be found at: http://www.revenue.ie/en/corporate/information-about-revenue/statistics/tax-expenditures/htb.aspx

Revenue’s published statistics at 30 November 2017 show the number of applications received at 11,985 and the number of approved applications at 8,568 or 71.5%. Compliant taxpayers who complete their HTB application are provided with an application number and a summary of the maximum relief available to them under the incentive. Revenue encourages prospective applicants to file any necessary tax returns, and resolve any outstanding issues, before making the HTB application. This reduces processing delays when a person makes their HTB application.

When an applicant has purchased a qualifying property from a qualifying contractor, or a self-builder has drawn down the first tranche of his or her mortgage on a qualifying property, the application can progress to the claim stage. Details of claims made and approved as well as the value of approved claims are also provided in the monthly statistics referenced above. To the end of November, 4,941 HTB claims had been made, of which 4,402 had been approved.

Legislative Programme

Questions (69)

Brendan Howlin

Question:

69. Deputy Brendan Howlin asked the Minister for Finance the Acts, or parts of Acts, awaiting commencement within his area of statutory responsibility; the reason for the delay in the commencement of each; and if he will make a statement on the matter. [53568/17]

Written answers

Minister for Finance

As the Deputy is aware the Oireachtas, when enacting legislation, in many instances provides a discretion to the relevant Minister in respect of the appropriate time to commence an Act, or certain provisions of an Act.

It was not possible to provide the details for all legislative provisions on the Statute Book. However I set out in the table details of legislative provisions passed by the Oireachtas since 1 January 2000 but which are not yet formally commenced and for which I, as Minister for Finance, have lead responsibility.  

I set out in the following table details of legislative provisions passed by the Oireachtas since 1 January 2000 but which are not yet formally commenced and for which I, as Minister for Finance, have lead responsibility.

	Act	Provision	Purpose
1.	Finance Act 2016	s. 19	s. 19 relates to balancing allowances and balancing charges
		s. 28	s.28 relates to disposals of business or farm on "retirement"
2.	Finance Act 2015	s. 46	s. 46 relates to a requirement to make electronically a return or make a claim, submission or declaration for the purposes of any requirement of excise law.
		s. 76	s. 76 requires a property agent to include in a return of information the tax reference number of each property owner and the Local Property Tax (LPT) number in respect of each residential property.
3.	Finance Act 2014	s. 74	s. 74 relates to relief from stamp duty for certain leases of farmland.
4.	National Treasury Management Agency (Amendment) Act 2014	s. 5 (in part)	s. 5 relates to amendments to Acts specified in Schedule 1 and Schedule 2 to the Act.
		s. 6(a)	s. 6(a) provides for the repeal of the National Pensions Reserve Fund Act 2000 (other than s. 30).
		s. 6(d)	s. 6(d) provides for the dissolution of the Investment of the National Pensions Reserve Fund and Miscellaneous Provisions Act 2009 (other than sections 9 and 11 to 13).
		s. 50	s. 50 provides for the dissolution of the National Pensions Reserve Fund Commission.
		s. 54 (in part)	s. 54 relates to the transitional provisions in Schedule 4.
		Schedule 1	Part 2, Item (1)(b) – relates to the deletion from Schedule 2 to the Ombudsman Act 1980 of “National Pensions Reserve Fund Commission” Part 4, Items (2)(b), 2(c), (4), 7(b), 7(c), 9(b), 9(c), 10(b), 12(b), 12(c), 12(d) – relate to amendments to the Taxes Consolidation Act 1997 Part 8 – relates to the amendment of the Credit Institutions (Stabilisation) Act 2010
		Schedule 2	Part 1, Item 1(b) – relates to amendments of the Ethics in Public Office (Prescribed Public Bodies, Designated Directorships of Public Bodies and Designated Positions in Public Bodies) Regulations 2004 Part 2, Item 1(b) – relates to amendment to the Official Languages Act 2003 (Public Bodies) Regulations 2006 Part 4 – relates to amendment of the Payments (Banks, Building Societies, Credit Unions and Savings Banks) Regulations 2008 Part 6, Items 1(a), 2(b) – relates to the amendment of the Payments (Insurance Undertakings) Regulations 2011
		Schedule 4	Paragraph 15 – relating to the final accounts of the National Pensions Reserve Fund Commission Paragraph 17 – relating to the final annual report of the National Pensions Reserve Fund Commission
5.	Strategic Banking Corporation of Ireland Act 2014	s. 12	s. 12 relates to the alienation of shares in the Strategic Banking Corporation of Ireland by the Minister for Finance.
6.	Finance Act (No. 2) 2013	s. 45	s. 45 relates to entrepreneur relief
7.	Finance Act 2011	s. 49(1) (partial)	s. 49(1) relates to betting duty and was commenced only insofar as s. 49(1)(a) to (j)
8.	Value-Added Tax Consolidation Act 2010	s. 14 (partial)	s. 14 was commenced only insofar as it applies to community facilities under s. 14 (3) (a) (i) and not s. 14(3)(a)(ii).
9.	Finance Act 2010	s. 27	s. 27 relates to the Mid-Shannon corridor tourism infrastructure investment scheme
		s. 163	s. 163 relates to an Amendment of the Bretton Woods Agreements Act 1957
10.	Finance (No. 2) Act 2008	s. 6 (partial)	s. 6 relates to Benefit-in-kind: emission based calculations
		s. 21	s. 21 relates to a scheme to facilitate removal and relocation of certain industrial facilities
		s. 64	s. 64 relates to a temporary exemption from registration for vehicles
11.	Finance Act 2008	s. 26	s. 26 relates to Capital allowances for qualifying specialist palliative care units.
12.	Finance Act 2006	s. 67(1) (partial)	This section relates to Tonnage Tax and was commenced only insofar as is applies to s. 67(1)(a)(i) and (1)(f)(i)
		s. 79(b)	This section relates to rates of mineral oil tax
13.	Central Bank and Financial Services Authority of Ireland Act 2004	s. 10 (2) –(3) partial	s. 10 (2) and (3) specify certain amendments to be made as per Schedules 1 and 2.
		Schedules 1 (partial)	Items not commenced in Schedule 1: - Part 1, Item 1 insofar as it relates to s. 21(3)(b) of the Central Bank Act 1971. - Part 4, Item 15 insofar as it relates to Paragraphs 2 and 3 of the First Schedule to the Stock Exchange Act 1995. - Part 5, Item 14 insofar as it relates to paragraphs 2 and 3 of the First Schedule to the Insurance Intermediaries Act 1995. - Part 6, Item 1 insofar as it relates to s. 93(18) of the Consumer Credit Act 1995, and Item 2 insofar as it relates to s. 116(18) of the Consumer Credit Act 1995. - Part 7, Item 7 insofar as it relates to s. 99(2) of the Credit Union Act 1997, Item 8 insofar as it relates to Item 1(b) of Schedule 4 of the Credit Union Act 1997 and Item 9 which repeals Schedule 5 to the Credit Union Act 1997. - Part 8, Item 3 insofar as it relates to s. 28(3) of the Investor Compensation Act 1998, Item 4 insofar as it relates to s. 31(3) of the Investor Compensation Act 1998 and Item 5 insofar as it relates to paragraph 2(b) of Schedule 2 to the Investor Compensation Act 1998.
		Schedule 2 (partial)	Items not commenced in Schedule 2: - Part 9, Item 2 in respect of Regulation 104(7) of the UCITS Regulations 2003 (SI 211 of 2003).
		Schedule 3 (partial)	Items not commenced in Schedule 3: - Part 1, Item 1 which relates to s.3 of the Insurance Act 1936. - Part 14, Items 3-5 which relate to s. 125-127 of the Credit Union Act 1997.
14.	Central Bank And Financial Services Authority Of Ireland Act 2003	s. 12 (partial)	s.12 repeals s. 15 of the Central Bank Act 1942. The provision was commenced except insofar as it applied to s. 15 (4) of the Central Bank Act 1942 re transfer of employment within the Commission.
		s. 34(a)	s. 34(a) relates to the repeal of the Central Bank Act 1961
		Schedule 1 (partial)	Schedule 1 repeals a number of enactments. Its commencement did not include item 4 of Part 6 of the schedule which repeals s. 54 of the Central Bank (Amendment) Act 1971, or Item 2 of Part 9 of the Schedule which repeals s. 15 (5), (6) and (8) of the Central Bank Act 1989.
15.	Finance Act 2001	s. 156(2)(a)	Rates for Mineral Oil
	Insurance Act 2000	s. 8	s. 8 has not been commenced insofar as it repeals s. 47 of the Insurance Act 1989. S. 47 of that Act was repealed by Section 7 and Schedule 1 of the Investors Compensation Act, 1998 (in so far as it imposes an obligation to hold a bond).
16.	Finance Act 2000	s. 96	s. 96 relates to rebates in respect of hydrocarbon oils used in train engines

Help-To-Buy Scheme Eligibility

Questions (70)

Michael McGrath

Question:

70. Deputy Michael McGrath asked the Minister for Finance further to Parliamentary Question No. 149 of 5 December 2017, if the help-to-buy scheme applies in this instance (details supplied). [53577/17]

Written answers

Minister for Finance

I am advised by Revenue that while the details supplied indicate that the property in question was a new building which was not used as a dwelling prior to 19 July 2016, it is not clear if it was suitable for use as a dwelling prior to that date. If the property was suitable for use as a dwelling prior to the relevant date, it will not qualify under the Help to Buy (HTB) scheme.

I am further advised by Revenue that, whilst they can provide general information in relation to the Help to Buy scheme, the question as to whether the specific individuals in respect of whom the Deputy’s Question refers qualify for the HTB on the property that they purchased in October 2017 is a matter to be determined by the Revenue office dealing with the tax affairs of those individuals following a claim from those individuals in respect of the property in question.  On foot of such a claim, the relevant Revenue office will examine matters and make a determination based on the specific circumstances of the case.

Legal Proceedings

Questions (71)

Michael McGrath

Question:

71. Deputy Michael McGrath asked the Minister for Finance the status of legal proceedings in which he and the Attorney General are cited as the defendants (details supplied); and if he will make a statement on the matter. [53581/17]

Written answers

Minister for Finance

The proceedings to which you refer, are currently the subject of an appeal to the Court of Appeal by the Plaintiff and are listed before the President of the Court of Appeal on 14 December 2017 to fix a date for the hearing of the appeal. As these proceedings are before the Courts at present, I cannot comment on same.

Stamp Duty

Questions (72)

Michael McGrath

Question:

72. Deputy Michael McGrath asked the Minister for Finance his plans to compensate private pension holders that had a pension levy imposed on their pension funds for a number of years as part of the jobs initiative of 2011; if his attention has been drawn to the fact that this levy resulted in permanently reduced pensions for many current and future pensioners; and if he will make a statement on the matter. [53584/17]

Written answers

Minister for Finance

I take it the Deputy is referring to the stamp duty levies applying to the assets of funded pension arrangements introduced in 2011 to pay for the Jobs Initiative, the chargeable persons for which are the trustees of pension schemes and others responsible for the management of pension fund assets.

The stamp duty levy on pension schemes was introduced in the wake of the financial crash and at a time when the economy was in very serious difficulties. Something had to be done to preserve and boost jobs and it is an unavoidable fact that difficult economic situations require hard and very often unpopular decisions. All sectors of the economy had to contribute to the recovery plan and the levy was designed to claw back a small amount of the very generous tax reliefs that those contributing to pension arrangements had benefitted from over many years.

The original 0.6% stamp duty levy on pension fund assets ended in 2014. The additional levy of 0.15% which my predecessor introduced for 2014 and 2015, mainly to help continue to fund Jobs Initiative, also ended in 2015.

The position is that the equivalent value of all of the money raised from the stamp duty levy has been used to fund the wide range of measures introduced in the Jobs Initiative to protect existing jobs and to help create new jobs and the Initiative has been a success in this regard. The measures introduced include expenditure measures such as the JobBridge and Springboard schemes, as well as a number of tax and PRSI incentives such as the reduction in the VAT rate from 13.5% to 9% for the tourism and hospitality sectors and the temporary halving of the lower employer PRSI rate.

Under the legislation, 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 or insurer to decide whether, when and how the levy should be passed on and to what extent, given the particular circumstances of the pension schemes for which they are responsible. However, the legislation also includes safeguards aimed at ensuring that should the option of reducing scheme benefits be taken, it must be applied in an equitable fashion across the different classes of scheme members that could include active, deferred and retired members. 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 pension scheme trustees or an insurer took the decision to treat the levy as an expense of the pension scheme, they would have adjusted current or prospective benefits payable to members under that scheme. The consequence of this treatment by the trustees or insurer could be a permanent reduction in members' benefits.

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 responsible for the payment of the levy (the pension scheme trustees, etc.) will benefit from the changes which my predecessor began in Budget 2015 and which have continued in subsequent Budgets to reduce the tax burden on low and middle income earners.

Fiscal Data

Questions (73, 74, 75, 76, 77, 78, 79, 80)

Michael McGrath

Question:

73. Deputy Michael McGrath asked the Minister for Finance further to Parliamentary Question No. 74 of 30 November 2017, if the figures given for net fiscal space for 2019, 2020 and 2021 include the changes announced in budget 2018; the amount by which they impacted on the net fiscal space from budget 2018 in the each of three years; and if he will make a statement on the matter. [53732/17]

Michael McGrath

Question:

74. Deputy Michael McGrath asked the Minister for Finance further to Parliamentary Question No. 74 of 30 November 2017, if the figures given for net fiscal space for 2019, 2020 and 2021 include the public pay agreement; the amount by which they impacted on the net fiscal space from the public pay agreement in each of the three years; and if he will make a statement on the matter. [53733/17]

Michael McGrath

Question:

75. Deputy Michael McGrath asked the Minister for Finance further to Parliamentary Question No. 74 of 30 November 2017, if the figures given for net fiscal space for 2019, 2020 and 2021 include the changes announced in mortgage interest relief; the amount by which they impacted on the net fiscal space from the changes in the three years; and if he will make a statement on the matter. [53734/17]

Michael McGrath

Question:

76. Deputy Michael McGrath asked the Minister for Finance further to Parliamentary Question No. 74 of 30 November 2017, if the figures given for net fiscal space for 2019, 2020 and 2021 include indexation measures; the amount by which they impacted on the net fiscal space from indexation measures in the three years; and if he will make a statement on the matter. [53735/17]

Michael McGrath

Question:

77. Deputy Michael McGrath asked the Minister for Finance further to Parliamentary Question No. 74 of 30 November 2017, if the figures given for net fiscal space for 2019, 2020 and 2021 include the capital envelope of €4.3 billion outlined in Exchequer capital envelopes 2018 to 2021; if these effects have been smoothed over the four years; and if he will make a statement on the matter. [53736/17]

Michael McGrath

Question:

78. Deputy Michael McGrath asked the Minister for Finance further to Parliamentary Question No. 74 of 30 November 2017, if there are outstanding costs in relation to Irish Water that will affect the net fiscal space for 2019, 2020 and 2021; if changes made in 2017 in relation to Irish Water and water provision have been factored into the base for the net fiscal space; and if he will make a statement on the matter. [53737/17]

Michael McGrath

Question:

79. Deputy Michael McGrath asked the Minister for Finance further to Parliamentary Question No. 74 of 30 November 2017, if demographic effects have been factored into the base for the calculation of the net fiscal space for 2019, 2020 and 2021; the amount of these effects; and if he will make a statement on the matter. [53738/17]

Michael McGrath

Question:

80. Deputy Michael McGrath asked the Minister for Finance further to Parliamentary Question No. 74 of 30 November 2017, the way in which local property tax is accounted for in the base calculation of net fiscal space; the impact in each of the years 2019, 2020 and 2021 from local property tax; if the impact incorporates the revaluation of properties expected to take place; and if he will make a statement on the matter. [53739/17]

Written answers

Minister for Finance

I propose to take Questions Nos. 73 to 80, inclusive, together.

As I stated in my reply to PQ number 74 of 30/11/17, the Summer Economic Statement (SES) 2016 set out estimates of gross and net fiscal space over the forecast horizon. SES 2016 also presented an indicative split between expenditure and taxation uses of these amounts as well as the provision for contributions to the Rainy Day Fund (RDF). This was subsequently updated in the SES 2017 to take account of the decision to increase capital expenditure in 2019, 2020 and 2021 by €500m by reducing the planned contributions to the RDF by the same amount. The figures given were adjusted to take into account the arithmetic set out in the Budget 2018. 

The current forecasts of general government revenue and expenditure include this allocation of fiscal space along with the measures introduced in Budget 2018.

The detailed estimates of gross and net fiscal space updated in SES 2017 resulted in additional unallocated fiscal space in each of 2019, 2020 and 2021, which was described as the margin of compliance. Based on Budget 2018 forecasts, indications are that the margin is expected to increase when the estimates of fiscal space are updated in the SES 2018 following the publication by the European Commission, in May of next year, of the reference rate, convergence margin and GDP deflator to be used for the calculations in relation to 2019. 

Net fiscal space also takes account of discretionary revenue measures that increase or decrease general government revenue such as, for example, mortgage interest relief. Further, the additional revenue generated from a political decision not to proceed with indexation of the tax bands is included in the discretionary revenue measures. The amounts set out in my previous response are inclusive of these.

Before addressing the specific issues raised, I want to stress the importance of the fiscal stance rather than the fiscal space. The economy is performing very strongly at present and full employment is now within sight. In these circumstances, it would be completely inappropriate to adopt pro-cyclical budgetary policies that simply add fuel to the fire. So, regardless of what fiscal space is available, it is my intention to do what is correct for the economy and I will not repeat the mistakes of the past.  Steady, sustainable improvements in public services are what is required, not boom and bust.

Now, turning to specific issues.

Changes announced in Budget 2018 that are recognised in 2018 go into the expenditure and revenue base and have no further effect on fiscal space. However, as set out in Table 7 of the Expenditure Report 2018, the carryover impact of Budget 2018 measures is estimated at approximately €192 million. These costs would have to come out of the unallocated fiscal space in the 2019 forecasts. Tax carryover is €14m and would need to be met out of the €590m fiscal space available for tax reductions in 2019.

The Public Service Stability Agreement (PSSA) has been ratified and the costs are included in the forecasts. The amounts are €370m in 2019, €340m in 2020, and €230m in 2021.

The tapering of mortgage interest relief (MIR), decided in Budget 2018, results in a revenue yield to the Exchequer that represents a positive discretionary revenue measure, increasing fiscal space, of €46m in 2019, €41m in 2020, and €37m in 2021. This is already included in the tax revenue forecasts.   

The existing forecasts make provision for tax reductions of €590 million, €620 million and €610 million for 2019 – 2021 respectively.

If a decision is taken to index the income tax bands then the revenue reductions included in the forecasts could be utilised for this purpose without impacting the tax forecasts for fiscal space. If social welfare payments were to be indexed then the unallocated fiscal space within the current forecasts could be utilised in the first instance.

The capital envelope is included in the baseline forecasts. As such, when calculating fiscal space, the provision for smoothing of gross fixed capital formation applies.

Irish Water’s planned expenditure as per its 2015 business plan was incorporated in the general government forecasts for 2015-2021. The reform of the funding of Irish Water due to the Water Services Act 2017 is neutral in overall general government terms and thus has no impact on calculations of fiscal space in the years 2019 – 2021. Further details on these changes were set out in chapter 7 of the Economic and Fiscal Outlook document as part of Budget 2018.

The baseline forecasts include demographic effects. These amount to €500m in 2019, €480m in 2020, and €480m in 2021.

With regard to Local Property Tax (LPT), this policy is not settled and the revaluation date has been postponed to 2019.  The position in 2019 and beyond is a matter of active consideration by Government.  In that context, my Department and the Department of Housing, Planning and Local Government in conjunction with the Revenue Commissioners will consider issues relating to the implementation of the recommendations in the Report prepared by Dr Don Thornhill.  The Government will make its position clear so that households will know well in advance what its plans are for LPT. In that regard, the forecast for LPT as set out in Budget 2018 of €470 million for 2017 remains unchanged over the forecast horizon.

As a result, there are no discretionary revenue measures relating to LPT policy changes in 2018 and no assumptions can be made in this regard for 2019 and subsequent years until the policy process described above is completed.  Accordingly, the impact of potential LPT changes on the forecasts of fiscal space out to 2021 is not included.

State Claims Agency Data

Questions (81)

Michael McGrath

Question:

81. Deputy Michael McGrath asked the Minister for Finance the number and value of claims paid out by the State Claims Agency in each the past five years; the number and value of claims that were settled out of court; the number and value of claims settled as a result of a court decision; and if he will make a statement on the matter. [53740/17]

Written answers

Minister for Finance

As the Deputy will be aware, the NTMA is designated as the State Claims Agency (SCA) when performing the claims management and risk management functions designated to it under the National Treasury Management Agency Act 1990, as amended.

In answer to the Deputy's question, I refer to material provided by the SCA and which is outlined in the tables. The material provided by the SCA covers the claims during the relevant period, and the report is correct as of 12 December 2017.

This information has been extracted from the National Incident Management System (NIMS). In reviewing the material the Deputy should note that:

- Table 1 shows the overall transactional cost of managing ongoing active claims and finalising claims from 2012 to 2016.

- Table 2 shows claims finalised for all State Authorities under the remit of the State Claims Agency (SCA) from 01/01/2012 to 31/12/2016 under the following case outcomes: Settlement Agreed, Case Discontinued/Claim Statute Barred, Indemnity Received, Outside SCA Remit, Case Dismissed and Court Award

Table 1: Overall transaction payments 2012 - 2016*

Transaction Payments (€'000)

2012	2013	2014	2015	2016
100,726	139,218	131,622	224,229	251,513

*Transactions payments relate to the ongoing cost of the entire claims portfolio, regardless of the status of the claim. 

Table 2: Claims Finalised and Paid Total 2012 – 2016

                                  Number of Claims Finalised             Paid Total (€’000)

Case   Outcome	2012	2013*	2014	2015	2016	2012	2013*	2014	2015	2016	Claims Total	Paid Total
Settlement   Agreed	735	887	904	968	1,083	66,029	75,659	87,966	95,156	114,366	4,577	439,176
Case   Discontinued/Claim Statute Barred	993	689	702	633	743	1,246	1,170	792	2,568	984	3,760	6,760
Indemnity   Received	104	116	195	147	328	633	650	667	480	236	890	2,666
Outside   SCA Remit	47	54	68	60	63	11	2	0	5	3	292	20
Case   Dismissed	30	47	29	33	36	459	1,010	€681	633	1,976	175	4,759
Court   Award	17	16	20	15	22	3,910	2,999	4,294	1,717	2,903	90	15,823
Total	1,926	1,809	1,918	1,856	2,275	72,286	81,490	94,401	100,559	120,467	9,784	469,203

*Please note that in 2013 there was one case that was “Settlement Agreed” after a Court Award appeal

  Case Outcome Definitions:

Settlement Agreed: A negotiated settlement has been agreed with the Plaintiff for damages or an Injuries Board award accepted. This category includes some claims that go to court and are either settled on the steps of the court or are settled during the court case but before the case concludes.

Indemnity Received:   The SCA obtained a full indemnity, in respect of the claim, on behalf of the relevant State Authority from the Insurers of a negligent Third Party motorist.

Case Discontinued/Statute Barred:   The claim against the State Authority was discontinued and/or withdrawn by the Plaintiff, or the Statute of Limitations rendered the claim Statute Barred and prevented the claim from proceeding.

Outside SCA Remit:   These claims were not managed by the State Claims Agency.

Case Dismissed: A judge has dismissed a Plaintiff’s claim at the conclusion of the trial.

Court Award: A judge has made an award of damages to the Plaintiff at the conclusion of the trial.

Other Definitions:

National Incident Management System (NIMS)

Incidents (which include claims) are reported using the “National Incident  Management System”. This is hosted by the State Claims Agency (SCA) for the HSE, other Healthcare enterprises and Delegated State Authorities. An incident can be a harmful Incident (Adverse Event), no harm incident, near miss, dangerous occurrence (reportable circumstance) or complaint. An Incident can relate to a person, property, crash/collision, dangerous occurrence or complaint.

Claim

A claim refers to notification of intention to seek compensation for personal injury and/or property damage where it is alleged the State was negligent. The application may be in the form of a letter of claim, an InjuriesBoard.ie application, or a written/oral request.

Paid total

Figures in respect of paid totals relate to the amount of money paid on a claim over its lifetime. This may include payments made in previous years . It includes damages, legal costs and other expert costs.

Claim Finalised

This refers to when a claim and all other matters associated with it have been agreed e.g. costs. There may still be some associated payments and reimbursements outstanding on finalised claims.

State Banking Sector

Questions (82)

Michael McGrath

Question:

82. Deputy Michael McGrath asked the Minister for Finance his strategies for returning each of the State-supported banks fully to the private sector; the timeframe for the full privatisation of each of the banks; the individual value of the State’s shareholding in each of the banks; the specific parameters that have to be met before further share sales take place; if he will be informing Dáil Éireann before proceeding with such sales; and if he will make a statement on the matter. [53741/17]

Written answers

Minister for Finance

As the Deputy will be aware, the State currently owns c. 71% of the shares in AIB, 14% of the shares in Bank of Ireland, and c. 75% of the shares in Permanent TSB. Following the IPO of AIB earlier this year all three of our bank investments are now listed on the main markets of the Irish and London stock exchanges, providing improved liquidity and marketability for the State's shares.

The valuation of the State's stake in each of the banks at the close of business 11 December 2017, was:

Bank	Valuation
AIB	€10,468 million
Bank of Ireland	€1,041 million
Permanent TSB	€784 million

Officials in my Department continue to monitor the performance of the banks, their share prices and equity markets more generally to determine the next sensible opportunity to realise value from our investments. It is important to point out that exiting our investments in a measured way that will optimise value for our citizens, will take a number of years, but I do not propose to set out a rigid timeline for disposal. To do so would potentially impact the value we can achieve. However as I have said before I believe that over the medium term we will recoup all of the money that we invested in these banks during the financial crisis. 

In order to proceed with another sale of bank shares, I would need to be satisfied that the market was prepared to put a fair and reasonable value on the bank's equity, bearing in mind its current performance, future prospects and the outlook for the economy, and I would do so on the advice of officials in my Department.

Unlike with the IPO of AIB earlier this year, any future sale of shares in any of our three banks, would likely be in the form of a "block" trade or accelerated book build as it is known in the markets. This is where a certain quantum of shares is sold into the market effectively overnight with very little advance notice given to investors. In these circumstances, signalling our intention to trade in advance could jeopardise the State's ability to achieve the best price on the day.

Clearly in the case of AIB, in order for me to proceed with another disposal next year I would need to obtain Cabinet approval as there is a restriction in the 'Programme for a Partnership Government', preventing any further sales of shares in that bank before the end of 2018.

Employment Investment Incentive Scheme Data

Questions (83, 84)

Michael McGrath

Question:

83. Deputy Michael McGrath asked the Minister for Finance the number of entities availing of the EIIS; the number of which are private investors, SMEs and microenterprises; the average annual relief for each private investor, SME and microenterprise; the annual cost of the scheme; the number of persons employed as a direct result of the scheme; and if he will make a statement on the matter. [53742/17]

Michael McGrath

Question:

84. Deputy Michael McGrath asked the Minister for Finance the number and value of EIIS claims made each month for the past 24 months; the number and value of claims left outstanding each month for the past 24 months; the average time taken to process each claim; the way in which the EU state aid rules have affected the number of claims under the EIIS; and if he will make a statement on the matter. [53743/17]

Written answers

Minister for Finance

I propose to take Questions Nos. 83 and 84 together.

The Employment and Investment Incentive (“EII”) applies to financing raised by micro, small and medium sized enterprises (being the company seeking to raise financing and all other associated companies). Where the enterprise and the investment meet certain conditions, it can raise financing from individual investors, who can claim tax relief in respect of the amount invested. Relief is granted in two tranches: the first portion of the relief (currently 30/40 and previously 31/41) is given at the time of investment while the second portion (currently 10/40 and previously 11/41) is given if, after 3 years, the company has increased employment or spent all of the money on qualifying research and development.  

Details on EII from its introduction to 2016 are as follows:

Year	Cost of EII €m	Number of companies	Number of investors	Average investment per company €	Average investment per investor €
2012	4	78	352	172,100	35,700
2013	12.7	190	1,028	222,800	37,100
2014	18.8	239	1,395	261,900	37,900
2015	22.2	279	1,530	265,500	40,600
2016	32.5	261	1,768	415,900	49,700
TOTALS	90.2	1,047	6,073

Details on the size of investments made under EII from its introduction to 2016 are as follows:The most recent complete figures for the EII scheme are for 2016. I am informed by Revenue that, in the year to the 30 November 2017, the scheme is seeing broadly the same levels of applications as 2016.  

Amount Invested €	2012	2013	2014	2015	2016
0-10,000	122	320	464	432	475
10,001-20,000	57	216	353	345	384
20,001-30,000	77	236	248	378	487
30,001-40,000	16	72	108	102	100
40,001-50,000	41	128	203	229	289
50,001-60,000	18	32	46	47	52
60,001-80,000	12	55	66	86	110
80,001-100,000	10	30	73	92	115
100,001-125,000	23	11	15	25	26
125,001-150,000	0	15	44	61	85
150,001-250,000	0	12	22	17	23
>250,000	0	15	12	13	40
TOTALS	376	1,142	1,654	1,827	2,186

The changes made to EII by section 18 Finance Act 2015, to align the incentive with the Commission Regulation (EU) No 651/2014 of 17 June 2014, known as the General Block Exemption Regulation (“GBER”) increased the complexity of the scheme. In some respects, it broadened the category of companies who are eligible while in others it narrowed it; it introduced the requirement to consider all associated companies rather than the applicant company on a stand-alone basis; it introduced the requirement that relief under EII is only given for investments made on foot of a viable business plan and that follow-on investments are only eligible for relief where they were foreseen in the business plan first used to raise EII supported financing. This increase in complexity means that there are additional checks which must be carried out by Revenue prior to approving the relief.

The volume of claims (including claims for both the first and second tranches of relief and outline applications) dealt with in the last 24 months is:

EII 1 / EII 1A / EII outline applications received

	2015	2016	2017	Total for three years.
January	N/A	52	69
February	N/A	68	47
March	N/A	54	60
April	N/A	62	56
May	N/A	64	64
June	N/A	75	60
July	N/A	59	66
August	N/A	59	50
September	N/A	72	58
October	N/A	82	72
November	N/A	66	74
December	41	46	-
Totals	41	759	676	1,476
Processed	41	748	516	1,305
Rejected	4	65	77	146
On hand at year end	0	11	171

It is not possible to give an average time taken to issue a decision. Where a full application is received with all supporting documentation, a decision will issue more quickly than a case where additional information and clarifications must be sought. Equally, it takes less time to carry out the level of examination required in respect of a claim by a company with a simple corporate structure than a claim in respect of a complex corporate grouping. At present, in respect of the more complex cases, it can take up to three months for a reply to issue. A revised outline application form is now in use which should ensure that all applications received are accompanied by all supporting information required, and a revised EII claim form will be published, once it is translated into Irish.  These two new forms should reduce the time taken to process each application.

I am also advised by Revenue that, as relief is granted at the taxpayer’s marginal rate of tax, the tax value of the amount invested depends on the circumstances of each the individual investor. As the tax relief is claimed in individual tax returns which are filed in October / November each year, it is not possible to calculate the cost per month.

I am further advised by Revenue that as the claims processed include a mixture of outline applications and actual claims, it is not possible to determine the value of these claims. While outline claims, for example, may include an indication of the amount of capital to be raised, this is only an indication and the actual value of the claim can only be determined when the actual claim is made.  As such, Revenue does not record this information in relation to applications.

Companies in respect of which claims for relief under EII were first made in 2012 and 2013 that either increased employment or spent all of the funds raised on qualifying research and development are in a position to claim the balance of relief (the 11/41s in respect of those years). To date, Revenue have processed claims by 25 companies showing an additional 200 employments (with a mean increase of 8 employments for these companies) and by 19 companies who expended the full amount raised on qualifying research and development.  These are preliminary figures as companies may still submit claims in respect of these periods.

Finally, as the Deputy will be aware from the recent debates during the passage of Finance Bill 2017, I indicated that a review of the EII scheme would be carried out in the course of 2018 to ensure, among other things, that the incentive continues to meet its objectives within the context of my Department's Guidelines on Tax Expenditures and EU state-aid rules.

Mortgage Interest Relief Application

Questions (85, 86)

Michael McGrath

Question:

85. Deputy Michael McGrath asked the Minister for Finance the number of mortgage holders availing of mortgage interest relief, MIR; the number of mortgages availing of MIR; the cost in 2017 of MIR; and if he will make a statement on the matter. [53744/17]

Michael McGrath

Question:

86. Deputy Michael McGrath asked the Minister for Finance the number of mortgage holders that will still avail of MIR on 1 January 2018 in view of the changes announced in budget 2018; the number of mortgages that will still avail of MIR; the projected cost of MIR in 2018; and if he will make a statement on the matter. [53745/17]

Written answers

Minister for Finance

I propose to take Questions Nos. 85 and 86 together.

In Budget 2018, in fulfilment of a Programme for Government commitment, I provided for the extension of Mortgage Interest Relief (MIR) into a further three-year phase-out period for the remaining recipients of the relief.

The process of phasing out MIR for homeowners has been under way since 2009. Relief has expired for qualifying mortgages taken out prior to 2004 and, with some limited exceptions, the relief ceased for new borrowings with effect from January 2013.  Prior to Budget 2018, MIR was scheduled to cease entirely at the end of 2017 for all remaining relief holders.  

The time-limited, tapered extension of MIR will allow mortgage holders time to adjust to the change in their mortgage repayments as the relief is gradually withdrawn over the next three years. Budget 2018 provides for the continuation of 75 per cent of the existing relief into 2018, 50 per cent into 2019 and 25 per cent into 2020.

I am advised by Revenue that, to date in 2017, there are 417,834 individuals availing of MIR across 286,325 loans. It is estimated that MIR will cost around €175 million in 2017.

The Budget 2018 changes to MIR act to extend the relief for all current recipients on a tapered basis.  Therefore, the number of recipients in 2018 will be broadly similar to the number in 2017, with a slight downward trend as some qualifying mortgages are redeemed each year. It is projected that the cost of MIR in 2018 will be approximately €124 million.

Ireland Strategic Investment Fund Investments

Questions (87)

Michael McGrath

Question:

87. Deputy Michael McGrath asked the Minister for Finance the annual return from ISIF in each of the years since its creation including 2017; the annual return from the global portfolio, domestic portfolio and directed portfolio respectively in each of the years; and if he will make a statement on the matter. [53746/17]

Written answers

Minister for Finance

The NTMA have supplied the information requested by the Deputy in the form of the following table:

	Directed	Total Discretionary	Irish	Global
2015*	16.6%	1.5%	12.3%	0.1%
2016	-7.9%	2.9%	6.5%	2.2%
YTD   Sep 2017	14.7%	3.0%	3.4%	2.9%
Annualised since inception	8.0%	2.7%	7.9%	1.9%
*Inception 21 Dec 2014 to end 2015

Notes:

The Discretionary Portfolio seeks to generate a return, over the long term, in excess of the cost of Irish Government debt and has set a performance objective of +4% per annum. Over the limited time since inception, the annualised return of the Discretionary Portfolio has slightly trailed its target return. This is in line with expectations during the deployment phase of the Fund.

The Discretionary Portfolio contains a number of elements (treasury management, currency management etc.) that are shared between the Global and Irish sub-portfolio. The Global and Irish sub-portfolio components of the total Discretionary Portfolio return are therefore approximate.

The significant return generated in the first two years of the Irish portfolio was driven by some mature legacy Irish assets transferred from the ISIF’s predecessor, the National Pensions Reserve Fund (NPRF).

During 2015, the NTMA transitioned the legacy assets from the NPRF to the ISIF, and the Global Portfolio was managed on an extremely prudent basis whilst the NTMA restructured the assets to reflect the Fund’s new mandate and investment horizon.

Tax Data

Questions (88)

Michael McGrath

Question:

88. Deputy Michael McGrath asked the Minister for Finance the annual cost of the research and development tax credit in each year since 2012, including 2017; the number of multinationals claiming the credit in each of these years; the taxable profits of the multinationals that claimed the research and development credit in each of these years; the number of SMEs claiming the credit in each of these years; the taxable profits of the SMEs that claimed the research and development credit in each of these years; and if he will make a statement on the matter. [53747/17]

Written answers

Minister for Finance

I am advised by the Revenue Commissioners that information in respect of the annual cost of the Research and Development (R&D) credit and the number of companies availing of the scheme is as follows:

Year	2015	2014	2013	2012
€m	707.9	553.3	421.4	281.9
No. of Companies	1,535	1,570	1,576	1,543

This information is available at www.revenue.ie/en/corporate/documents/statistics/tax-expenditures/costs-tax-expenditures.pdf for all years up to 2015. Information in respect of 2016 is not yet available as the bulk of the returns have only recently been filed and will be analysed in the coming months.

The available data in respect of foreign owned multinational companies and SMEs (defined as companies with less than 250 employees) claiming the R&D credit in respect of taxable profits, and number of claimants, is as shown in the following table:

Foreign Owned Multinational Claimants of Research & Development Credit

Year	Number	Taxable Profits €m
2012	123	15,000
2013	116	11,723
2014	244	14,199
2015	244	19,516

SME (with less than 250 employees) Claimants Research & Development Credit

Year	Number	Taxable Profits €m
2012	1,360	879
2013	1,460	3,489
2014	1,431	1,967
2015	1,392	2,455

Ireland Strategic Investment Fund Investments

Questions (89)

Michael McGrath

Question:

89. Deputy Michael McGrath asked the Minister for Finance the amount invested by Activate Capital in 2017; the average interest charged on the finance provided; the number of homes completed in each of the years since its creation including 2017; the way in which the rate of interest will compare to the new Home Building Finance Ireland rate; and if he will make a statement on the matter. [53748/17]

Written answers

Minister for Finance

The ISIF have informed me that the Activate Capital is a €500 million fund, which is financed through a €325 million loan note from the Ireland Strategic Investment Fund (ISIF) and a €175 million loan note provided from KKR.  It became operational in January 2016 with funding provided by Activate for 3,600 houses as at September 2017. As Activate's purpose is to provide funding for development but not to act as developer itself, ISIF can only share information on funding committed, not homes completed. The amount invested by Activate in 2017 is commercially sensitive and cannot be disclosed.  

The Activate base lending rate depends on the extent of leverage advanced and the risk characteristics of each specific project and would typically range from 6% to 10%.  Activate may provide up to 90% of the funding requirement for an individual project, and this may be reflected in the lending terms, including the interest rate.  As would be expected for projects of this nature, there may be a small participation in equity upside if projects are successful so that Activate, and by extension taxpayers, share in any gains alongside the project promoter. 

Given Activate Capital has private shareholders, it would not be appropriate to disclose the Fund’s commercially sensitive information, including the interest rates charged on specific projects or the amount of drawdown in 2017. This approach is in line with standard commercial confidentiality principles applying to all private companies.

In relation to the rate of interest charged by Home Building Finance Ireland (HBFI), I am not in a position to confirm specific product terms and conditions, as these will be set by the board of HBFI in due course. I can confirm that HBFI will be lending on commercial, market-equivalent terms and conditions, which would depend on the risk profile of each individual project, the quality of collateral and the creditworthiness of the borrower.

Tax Data

Questions (90)

Michael McGrath

Question:

90. Deputy Michael McGrath asked the Minister for Finance the reason for the shortfall in income tax compared with target as outlined in the November 2017 fiscal monitor; if he will provide an outturn versus target breakdown of income tax, by PAYE, self-assessment income tax, universal social charge and other classifications of income tax in 2017; and if he will make a statement on the matter. [53749/17]

Written answers

Minister for Finance

The position is that at end-November 2017, cumulative income tax receipts of €18,283 million were marginally down 1.4 per cent or €251 million against profile.   This represents strong annual growth of 4.2 per cent or €738 million. Furthermore, it is also worth pointing out that there were significant one-off income tax payments in the comparable period last year, amounting to c. €300 million.  Excluding, these the underlying income tax position is showing a year-on-year increase of 6.0 per cent or €1.0 billion. 

The shortfall against target is across a range of income tax components. It is important to point out that the key income tax component, i.e. PAYE income tax, which accounts for around 65 per cent or €13.1 billion of total income tax receipts is broadly in-line with target at end-November, down just €34 million or just under 0.3 per cent.  This represents robust year-on-year growth of 8.8 per cent or €957 million which reflects solid wage growth and continued strong increases in full time employment.   

In relation to USC, overall receipts are on target at end-November.   

Of the remaining components of income tax, some relate to unearned income and are not directly impacted by employment or wage developments (e.g. Deposit Interest Retention Tax and Life Assurance Exit Tax).  The majority of these components are below target at end-November, and therefore having a ‘drag’ on overall income tax receipts at end-November 2017.

The other main contributing factor to the overall shortfall is the Schedule D income tax provisional receipts, which are €119 million or 6.6 per cent below target but up 2.3 per cent in year-on-year terms. 

The position is that the final Schedule D returns in respect of 2016 incomes were only due to be filed in November this year and Revenue is still in the process of reviewing these.  

Schedule D income earners were also required to pay preliminary tax in respect of 2017 in October/November this year.  However, the associated final returns are not required to be filed until October/November 2018.  It will only be then that Revenue can fully advise why receipts from this cohort of income earners was below expectations. 

The table provides a breakdown of the various income tax components on a Revenue net receipts basis at end-November against provisional collection targets.  It is important to point out that the “Revenue net receipts” reported by the Revenue Commissioners represent matured tax liabilities and this reporting arrangement is more of an accounting concept. As a result, tax receipts reported on an Exchequer cash basis can differ from Revenue’s “net receipts” at any given time for accounting and timing reasons.

Tax-head	End-November 2017 Outturn €m	End-November 2017 Target €m	Excess/Shortfall €m	Excess/Shortfall %
Income   Tax (PAYE)	11,876	11,910	-34	-0.3
USC   (PAYE & Schedule D)	3,430	3,430	0	0.0
Income   Tax (Schedule D)	1,666	1,785	-119	-6.6
Life   Assurance Exit Tax /DIRT	302	413	-111	-26.9
Other	1,035	987	+48	+4.8