Written Answers Nos. 127-146
128. Deputy Clare Daly asked the Tánaiste and Minister for Foreign Affairs and Trade if representations will be made to the UK Government urging it to respect the judgment of the International Court of Justice in respect of the Chagos Islands, specifically that the UK bring to an end its administration of the Chagos Archipelago and return it to Mauritius to allow the return home of exiled Chagossians as rapidly as possible. [10807/19]
View answerThe United Nations General Assembly on 22 June 2017 adopted a Resolution put forward by Mauritius to seek an advisory opinion from the International Court of Justice on the legal consequences of the separation of the Chagos Archipelago from Mauritius in 1965, prior to Mauritian independence from the UK.
On 25 February 2019 the Court delivered its Advisory Opinion. The Court found that the separation of the Chagos Archipelago from Mauritius was contrary to the right to self-determination and that accordingly the decolonisation of Mauritius was not completed in conformity with international law.
Advisory opinions are addressed to the UN organs or agencies requesting them; in this case the UN General Assembly. It is now a matter for the UN General Assembly to consider the consequences of the Advisory Opinion and to determine how it wishes to proceed on this matter. Ireland paid close attention to the discussions leading up to the adoption of the General Assembly Resolution put forward by Mauritius. As a member of the General Assembly we will continue to pay close attention to this matter in the period ahead.
129. Deputy Niall Collins asked the Tánaiste and Minister for Foreign Affairs and Trade his views on the detention of Palestinian children in Israeli prisons; if he has raised this issue with the authorities in Israel; and if he will make a statement on the matter. [10812/19]
View answer130. Deputy Niall Collins asked the Tánaiste and Minister for Foreign Affairs and Trade if the issue of Palestinian children detained and prosecuted in the Israeli military court system has been raised at EU level including the Foreign Affairs Council; if the EU has taken action in this regard; and if he will make a statement on the matter. [10813/19]
View answer131. Deputy Niall Collins asked the Tánaiste and Minister for Foreign Affairs and Trade if he has taken action in relation to Palestinian children detained in Israeli prisons; his views on whether the human rights of Palestinian children are being violated; and if he will make a statement on the matter. [10814/19]
View answerI propose to take Questions Nos. 129 to 131, inclusive, together.
The human rights situation in Israel and the Occupied Palestinian Territory is a matter of deep concern. The manner and practices around the detention and trial of Palestinian children in Israeli prisons and the Israeli military court system continue to be unacceptable. It is my view that Palestinians who are detained, especially children, should have the same protections and conditions that Israel affords its own citizens who are subject to detention.
Ireland has recommended that Israel urgently end the admissibility of evidence in military courts of written confessions in Hebrew signed by Palestinian children, the use of solitary confinement and the denial of access to family members or to legal representation.
As a contracting party, Israel is bound by the UN Convention on the Rights of the Child (CRC) and the International Covenant on Civil and Political Rights (ICCPR). I am not satisfied that Israel is meeting its obligations under Articles 37 and 40 of the CRC and Articles 9 and 14 of the ICCPR. For example, Article 37 of the UN Convention on the Rights of the Child states that “The arrest, detention or imprisonment of a child shall be in conformity with the law and shall be used only as a measure of last resort and for the shortest appropriate period of time.”
During my visits to Israel and Palestine, I have personally raised Ireland’s concerns about the detention of minors directly with the Israeli authorities, including on the practices of night-time arrests and blindfolding. I have strongly urged the Israeli authorities to use detention only as a last resort, and for the shortest possible period of time, in the case of minors, as stipulated in the UN Convention.
More generally, I am seriously concerned by the Israeli military court system which is used in relation to Palestinians in the Occupied Palestinian Territory, including children. Palestinians do not enjoy the same legal protections as Israeli settlers in the same area. These military courts have a near-one hundred percent conviction rate, a statistic which raises serious questions about the system’s compliance with international standards of due process.
Ireland has repeatedly drawn attention to concerns regarding the treatment of Palestinian prisoners, and in particular, over recent years to issues related to the detention of minors. In the most recent UN Human Rights Council Universal Periodic Review of Israel in 2018, Ireland drew attention to concerns in this regard. Ireland also raised the issue of administrative detention and recommended that Israel ensure full respect for international human rights obligations, in particular those specified in article 9 of the ICCPR, towards all prisoners.
Ireland has also raised these issues at EU level. In February 2019, the Foreign Affairs Council adopted Conclusions on EU Priorities in UN human rights fora, which reaffirmed the EU’s commitment to the full implementation of the Convention on the Rights of the Child and its Protocols worldwide.
Ireland also provides financial support to Israeli and Palestinian NGOs who are active in bringing the issues related to the detention of minors to light, and combatting abuses.
My Department and I will continue to press on these issues in the relevant multilateral fora, and also, where appropriate, directly with Israel, both with the Israeli Embassy here and through our own Embassy in Tel Aviv.
132. Deputy Aindrias Moynihan asked the Minister for Finance the steps he is taking to reduce the cost of flood insurance for areas which require flood relief works as prescribed by the Office of Public Works under the CFRAM scheme but which are not included in the first tranche of works; and if he will make a statement on the matter. [10360/19]
View answerI am conscious of the difficulties that the cost of flood insurance cover can cause to homeowners and businesses, and that is one of the reasons the Government has been prioritising investment in flood defences over the last number of years.
However, you should be aware that the provision of insurance is a commercial matter for insurance companies, which has to be based on a proper assessment of the risks they are willing to accept. This assessment will in many cases include insurers own presumptions based on their private modelling and research. Consequently, neither the Government nor the Central Bank can interfere in the provision or pricing of insurance products or have the power to direct insurance companies to provide flood cover to specific individuals or businesses. This position is reinforced by the EU framework for insurance which expressly prohibits Member States from doing so.
The above mentioned limitations means that addressing the cost and availability of flood insurance must be addressed from a different angle. In this regard the core strategy for addressing areas at potentially significant risk from flooding is the OPW Catchment Flood Risk Assessment and Management ("CFRAM") Programme. The CFRAM Programme focussed on 300 Areas for Further Assessment ("AFAs") including 90 coastal areas, mainly in urban locations nationwide, identified as being at potentially significant risk of flooding. The proposed feasible measures, both structural and non-structural, identified for AFAs are outlined in Flood Risk Management Plans. The Plans set out the flood relief schemes that have already been constructed and those that are currently underway. The Plans also provide the outline of 118 proposed schemes that can protect a further 11,500 properties and the evidence to prioritise their delivery to where its benefit is greatest. OPW have informed my Department that they and Local Authorities will work closely together on all of the projects to ensure that they are implemented in the lifetime of the Programme. The OPW has also advised that they are working with Local Authorities to ensure these schemes are progressed within agreed timeframes.
Therefore, Government policy in relation to flooding is focused on the development of a sustainable, planned and risk-based approach to dealing with flooding problems. This in turn should lead to the increased availability of flood insurance.
A key part of the overall strategy is ongoing communication between the OPW and the insurance industry, in order to reach a better understanding about the provision of flood cover in marginal areas. This is facilitated by a Memorandum of Understanding between the OPW and Insurance Ireland, which provides for the exchange of data in relation to completed flood defence schemes which should provide a basis for the increased provision of flood insurance in areas where works have been completed. In this regard, the Insurance Ireland/OPW working group, which the Department of Finance attends, now meets on a quarterly basis to support the information flow and improve the understanding of issues between both parties.
Finally, you should be aware that a consumer can make a complaint to the Financial Services Ombudsman in relation to any dealings with a Financial Services or Insurance provider during which they feel they have been unfairly treated. In addition, individuals who are experiencing difficulty in obtaining flood insurance or believe that they are being treated unfairly may contact Insurance Ireland which operates a free Insurance Information Service for those who have queries, complaints or difficulties in relation to insurance.
133. Deputy Eamon Scanlon asked the Minister for Finance if the recommendations of the cost of insurance working group will be implemented as a priority; if a national claims information database and anti-fraud unit will be established within An Garda Síochána; and if he will make a statement on the matter. [10362/19]
View answerAs the Deputy is aware, the Cost of Insurance Working Group (CIWG) is chaired by the Minister of State for Financial Services and Insurance, Mr. Michael D’Arcy T.D., and has produced two primary reports, the 2017 Report on the Cost of Motor Insurance (“Motor Report”) and the 2018 Report on the Cost of Employer and Public Liability Insurance (“EL/PL Report”). Work has been ongoing on the implementation of the recommendations from these two Reports by the relevant Government Departments and Agencies and there is a commitment that the Working Group will prepare regular updates on its progress.
The eighth such Progress Update has just been published and concentrated in particular on outlining the definitive position in relation to all of the 33 recommendations from the Motor Report, as the last of the deadlines within its Action Plan passed at the end of 2018. 29 of these recommendations have either been completed, are categorised as “ongoing” and in respect of which work is continuing, or have been concluded in so far as the direct involvement of the CIWG is concerned.
In respect of the EL/PL Report, 24 out of the total of 26 action points which were due for completion during 2018 overall have been accomplished.
Taking the two specific issues highlighted by the Deputy in turn, I can confirm that the Central Bank (National Claims Information Database) Bill 2018 completed all stages in the Oireachtas on 20 December 2018 and the Act was commenced on 28 January 2019. The Central Bank of Ireland (CBI) is now making appropriate regulations in respect of this database, as provided for in the Act. The CBI will collaborate with insurance undertakings to ensure efficient data collection, and expects to publish its first report in respect of the National Claims Information Database during the second half of 2019. Once fully operational, the database will enable the CBI to publish a range of claims-related information on an annual basis to increase transparency.
Regarding the other matter raised by the Deputy, the latest Progress Update confirms that the Garda Commissioner has undertaken to further consider the establishment of an insurance fraud investigation unit within the Garda National Economic Crime Bureau (GNECB). In response to the original proposal to explore the possibility that a specific unit be set up within An Garda Síochána using funding from the insurance industry, the Commissioner indicated his preference that, in principle, An Garda Síochána should not be funded by any source other than the exchequer for the purposes of tackling insurance fraud. The Deputy will, of course, appreciate that it is the Garda Commissioner who is responsible for the allocation of resources within An Garda Síochána and neither I nor the Minister for Justice and Equality has a role in such operational matters.
It should be reiterated that an industry-funded Garda unit was a single mechanism proposed as a potential means by which to implement the intent behind the relevant recommendation, the wording of which calls for An Garda Síochána to explore the potential for further cooperation between it and the insurance sector in relation to insurance fraud investigation. In this regard, much constructive engagement has taken place through the Fraud Roundtable, which was formed by the CIWG primarily to implement Recommendation 13 of the EL/PL Report, work which culminated in the publication by An Garda Síochána of the Guidelines for the Reporting of Suspected Fraudulent Insurance Claims by Insurance Entities to An Garda Síochána in October 2018. A particularly positive ‘spin-off’ development from the Roundtable has been that the GNECB and Insurance Ireland’s Anti-Fraud Forum – which is drawn from the fraud sections of the major individual insurers – have committed to meet on a regular basis in order to discuss and act upon current and ongoing general issues which arise in the area of insurance fraud.
Finally, the Deputy should be assured that Minister of State D’Arcy and the Working Group will continue to push for the completion of all outstanding recommendations and action points, as well as seeking to put into place the relevant measures proposed by the Personal Injuries Commission.
134. Deputy Eoin Ó Broin asked the Minister for Finance the status of the progress of the Fossil Fuel Divestment Act 2018; and if he will make a statement on the matter. [10697/19]
View answerThe Fossil Fuel Divestment Act, 2018 was signed into law by the President on 17 December 2018. It became effective immediately, once enacted and prohibited the ISIF from having direct investment in any company that generates greater than 20% of its revenues from the exploration, extraction or refinement of Fossil Fuels (e.g. oil, natural gas, peat, coal or any derivative thereof intended for use in the production of energy by combustion). In the case of pooled investment vehicles, exposure to such undertakings should be 15% or less.
Within weeks of the Fossil Fuel Divestment Act being signed into law, the ISIF advised me that it had divested from all required companies within the meaning of the Act – a total €72 million of equity and debt exposures - and the ISIF has developed a wider “Fossil Fuel List” of 148 companies in which it will not invest.
135. Deputy Michael McGrath asked the Minister for Finance if there are guidelines in relation to the way in which banks treat mortgage applicants who receive their principal employment income in a non-Euro currency such as sterling; and if he will make a statement on the matter. [10218/19]
View answerThe European Union (Consumer Mortgage Credit Agreements) Regulations 2016 (which transpose the 2014 Mortgage Credit Directive into Irish law) sets out, in respect of the credit agreements which fall within the scope of the Regulations, certain particular requirements in relation to "foreign currency loans".
The Regulations define a “foreign currency loan” as a credit agreement where the credit is:
(a) denominated in a currency other than that in which the consumer receives the income or holds the assets from which the credit is to be repaid, or
(b) denominated in a currency other than that of the EEA Member State in which the consumer is resident.
As required by the Directive, the transposing Regulations provide that, where a credit agreement relates to a "foreign currency loan", a creditor must ensure that:
- the consumer has a right to convert the credit agreement into an alternative currency (if conditions specified by the creditor are met); or
- there are other arrangements in place to limit the exchange rate risk to which the consumer is exposed under the credit agreement (such other arrangements include a limit on the amount that the consumer has to pay under the credit agreement, or a risk warning where such a warning would be sufficient to limit the exchange rate risk to which the consumer is exposed).
Where the consumer has a right to convert the credit agreement into an alternative currency, such an alternative currency will be either the currency in which the consumer primarily receives income (or holds assets from which the credit is to be repaid), or the currency of the EEA Member State in which the consumer either was resident at the time the credit agreement was concluded or is currently resident. (The exchange rate at which the conversion will be carried out shall be the market exchange rate applicable on the day of application for conversion, unless otherwise specified in the credit agreement).
The Regulations also requires creditors to provide relevant information and warnings to the consumer at the commencement of the agreement (by way of the European Standardised Information Sheet) and regularly during the course of the agreement (at a minimum where the value of outstanding credit amount payable or the regular instalments varies by more than 20 per cent).
In addition, the other more general requirements of the Mortgage Credit Directive, including those which oblige lenders to obtain relevant information and to conduct a credit worthiness assessment prior to granting credit, will also apply where appropriate to "foreign currency loans".
While the Regulations (and indeed other applicable legislative and regulatory requirement) provides a framework within which creditors must operate when providing "foreign currency loans" and indeed mortgages more generally, it remains the case that the decision on whether or not to provide "foreign currency loans" (or indeed any other type of credit) remains a commercial and business decision for individual lenders.
136. Deputy Michael McGrath asked the Minister for Finance the position in relation to compensation for investors who lost significant amounts arising from their investment in a fund (details supplied); the position of the Central Bank in relation to the issue; and if he will make a statement on the matter. [10227/19]
View answerAs the Deputy will be aware this matter is the focus ongoing legal action before the courts. As such it would not be appropriate for me as Minister or for my Department to comment.
My officials contacted AIB and received the following response:
"Litigation relating to the Belfry property investment funds [the Second Belfry Properties (UK) plc, the third Belfry Properties (UK) plc, the Fourth Belfry Properties (UK) plc, the Fifth Belfry Properties (UK) plc, the Sixth Belfry Properties (UK) SA] is currently before the Courts. As the litigation is ongoing it is not appropriate for further comment to be made."
My officials contacted the Central Bank and received the following response:
“As this issue is being considered by the Courts, the Central Bank will decline to reply directly to this PQ."
The Central Bank provided the following "general contextual information" which may of use to the Deputy:
“The Investor Compensation Company (ICCL) can only begin to accept claims for compensation if a member investment firm of the Compensation Scheme has gone out of business, and, cannot return client assets or client money in accordance with legal and contractual obligations; and a Central Bank determination (decision) or High Court ruling declaring the member firm insolvent has been made under the Investor Compensation Act, 1998.”
“It is important to note that compensation cannot be claimed if the value of an investment has fallen due to market movements. Investing in shares and other investments carries a certain degree of risk. Sometimes these investments may lose some of their value. Occasionally, they lose all their value. We do not pay compensation where the value of an investment has fallen due to market movements, economic conditions or the operation of a provision in respect of the investment instrument concerned, for example, the expiry of an option.”
“The ICCL has not been advised of any Central Bank determination or High Court insolvency ruling in relation to the AIB Belfry Fund. The AIB Belfry Fund, of itself, is not a member of the ICCL operated scheme.”
137. Deputy Billy Kelleher asked the Minister for Finance the number of applications made by businesses to register for an economic operators registration and identification number to enable the import or export of goods into or out of the European Union by county,## in tabular form; and the number of letters written by the Revenue Commissioners to businesses in each county urging them to register for such a customs number which will be required to continue trading with the UK post-Brexit. [10273/19]
View answerI am advised by Revenue that there has been a significant increase in registrations for Economic Operators Registration and Identification (EORI) numbers in 2019. An EORI number is a basic requirement for businesses that wish to move goods to, from or through the UK post-Brexit.
In the time available, Revenue has provided national level figures for the number of EORI applications. Further work is required by the Revenue IT Department to provide a breakdown by county. As soon as Revenue has a county breakdown available, I have asked them to send this information to the Deputy.
|
Year |
Number of EORI Registrations |
|
2018 |
2,976 |
|
January/February 2019 |
2,617 |
Since November 2018, Revenue has written directly to approximately 84,000 businesses, who from Revenue’s records have recently had at least some level of trade with the UK, encouraging them do a Brexit impact assessment for their business, and bringing their attention to the availability of free and dedicated customs information seminars.
The breakdown of the number of letters written by Revenue to businesses without an EORI number by county is set out in the following table.
|
County |
Number of Businesses contacted by Revenue |
|
Carlow |
799 |
|
Cavan |
1,634 |
|
Clare |
1,498 |
|
Donegal |
3,588 |
|
Galway |
3,188 |
|
Kerry |
1,994 |
|
Kildare |
2,721 |
|
Kilkenny |
1,211 |
|
Laois |
946 |
|
Leitrim |
767 |
|
Limerick |
2,091 |
|
Longford |
591 |
|
Louth |
2,227 |
|
Mayo |
1,904 |
|
Meath |
2,941 |
|
Monaghan |
1,700 |
|
Offaly |
927 |
|
Roscommon |
884 |
|
Sligo |
1,132 |
|
Tipperary |
1,989 |
|
Waterford |
1,413 |
|
Westmeath |
1,195 |
|
Wexford |
2,423 |
|
Wicklow |
2,065 |
|
Dublin City |
7,200 |
|
Dublin County |
7,517 |
|
Cork City |
1,147 |
|
Cork County |
5,036 |
138. Deputy Eamon Scanlon asked the Minister for Finance if the case of a person (details supplied) will be examined; and if he will make a statement on the matter. [10354/19]
View answerI am advised by Revenue that it has reviewed the person’s tax situation and is satisfied that the position regarding their tax credits and rate band entitlements for 2019 is correct and is not related to the issues that occurred in 2018.
The reduction in the person’s tax credits for 2019 was correctly applied to take account of the tax liabilities on a full year payment of the State Contributory Pension by the Department of Employment Affairs and Social Protection (DEASP) to their spouse. The person’s spouse only received the State Contributory Pension from May 2018, which resulted in a smaller reduction in their tax credits for that year. In situations where a couple has both an employment income and a State Pension from DEASP, the tax due on the pension is collected by reducing the tax credits on the employment income.
139. Deputy Aindrias Moynihan asked the Minister for Finance if he is satisfied that homesteads that have flood defences in place can secure home insurance; and if he will make a statement on the matter. [10357/19]
View answerI am conscious of the difficulties that the absence or withdrawal of flood insurance cover can cause to homeowners and businesses, and that is one of the reasons the Government has been prioritising investment in flood defences over the last number of years.
However, you should be aware that the provision of insurance is a commercial matter for insurance companies, which has to be based on a proper assessment of the risks they are willing to accept.
Consequently, neither the Government nor the Central Bank can interfere in the provision or pricing of insurance products or have the power to direct insurance companies to provide flood cover to specific individuals or businesses.
Government policy in relation to flooding is focused on the development of a sustainable, planned and risk-based approach to dealing with flooding problems. This in turn should lead to the increased availability of flood insurance. To achieve this aim, there is a focus on:
- prioritising spending on flood relief measures by the Office of Public Works (OPW) and relevant local authorities;
- development and implementation of plans by the OPW to implement flood relief schemes; and,
- improving channels of communication between the OPW and the insurance industry, in order to reach a better understanding about the provision of flood cover in marginal areas.
The above approach is complemented by a Memorandum of Understanding between the OPW and Insurance Ireland, which provides for the exchange of data in relation to completed flood defence schemes which should provide a basis for the increased provision of flood insurance in areas where works have been completed. In this regard, the Insurance Ireland/OPW working group, which the Department of Finance attends, now meets on a quarterly basis to support the information flow and improve the understanding of issues between both parties.
Finally, you should be aware that a consumer can make a complaint to the Financial Services Ombudsman in relation to any dealings with a Financial Services or Insurance provider during which they feel they have been unfairly treated. In addition, individuals who are experiencing difficulty in obtaining flood insurance or believe that they are being treated unfairly may contact Insurance Ireland which operates a free Insurance Information Service for those who have queries, complaints or difficulties in relation to insurance.
140. Deputy Clare Daly asked the Minister for Finance if he has received a report (details supplied). [10361/19]
View answerI wish to inform the Deputy that I received a detailed response from the Office on 30th August 2018. I am advised further that a copy of the response was also sent by that Office to the Committee of Public Accounts.
141. Deputy Jackie Cahill asked the Minister for Finance the way in which a contributory old age pension is treated for taxation for a person that is paying class S PRSI; and if he will make a statement on the matter. [10404/19]
View answerAs the Deputy will be aware, for individuals to qualify for the Contributory State Pension they must be over the age of 66. If an individual is over the age of 66, they are exempt from paying PRSI on their income.
However, in relation to the tax treatment of the State Contributory Pension and the taxation of self-employed persons in the context of the question asked by the Deputy, I am advised by Revenue that the position is as follows.
The State Contributory Pension is chargeable to income tax under Schedule E by virtue of section 19 of the Taxes Consolidation Act 1997. The Department of Employment Affairs and Social Protection advise Revenue of individuals who are in receipt of the State Contributory Pension and the amount of the pension paid. Where Revenue has this information, it will automatically show on the individual’s pre-populated income tax return.
Generally, individuals who are self-employed, and under the age of 66, pay Class S PRSI. Self-employed individuals are required to file an annual income tax return. The annual income tax return must be filed no later than 31 October following the end of the tax year in the case of those taxpayers who file a paper return and not later than mid-November following the end of the tax year in the case of those taxpayers who file their return using Revenue’s Online Service (ROS). Details of any taxable payments received from the Department of Employment Affairs and Social Protection should be either included or confirmed on the annual income tax return. Any tax due in respect of such payments is payable at the same time as the annual tax return is required to be made.
142. Deputy Joan Collins asked the Minister for Finance the impact Brexit or a crash out will have on Irish persons who## are paying into private pensions in the United Kingdom. [10486/19]
View answerI am assuming that the question is in reference to occupational pension schemes.
In that context I would like to clarify that the Department of Employment Affairs and Social Protection (DEASP) is responsible for occupational pensions policy. Additionally, the Pensions Authority (PA), which is a body under the aegis of DEASP is responsible for regulating Institutions for Occupational Retirement Provision (IORPs) under the IORP Directive, which governs the operation of cross-border IORPs. The PA also supervises Personal Retirement Savings Account (PRSA) providers in relation to their approved PRSA products.
Firstly, regarding Irish persons paying into approved private pension schemes in the UK, tax relief is available on contributions into and on the growth of the investment under our Exempt, Exempt, Taxed (EET) system which is set out in the Taxes Consolidation Act 1997. Provisions to maintain this in the event of a hard Brexit are included in the Withdrawal of the United Kingdom from the European Union (Consequential Provisions) Bill 2019, the so called Brexit Omnibus Bill, which is currently going through the Houses.
The question of whether or not a UK Company Scheme Pension will be paid into an Irish bank account post-Brexit is a matter for the relevant scheme provider. If the pension provider is an insurance company that has not yet established in an EU/EEA as part of their contingency preparations this contract would be covered under the legislative amendments to the EU Insurance and reinsurance regulations, contained in Part 8 of the draft legislation. It may be beneficial for any concerned party to contact their personal pension provider in the first instance to clarify what contingency plans have been put in place.
In relation to the making of or receiving financial payments. SEPA is the Single Euro Payments Area which enables payment transfers in euro between accounts in SEPA countries. The UK Government has committed to keeping its payment rules in line with SEPA in order to continue its access post Brexit. As stated on its website: 'There is nothing in UK private occupational pensions legislation that prevents occupational pension schemes from making pension payments overseas, We do not expect that this will change as a result of Brexit.'
In the event that the UK is excluded from SEPA some additional costs may arise for transfers in euro moving between accounts in the UK and accounts in the EU, and they may take longer than they currently do. Customers should contact their finance provider where they have specific queries.
Finally, the impact of Brexit, and in particular a hard Brexit, on markets and the euro/sterling exchange rate is difficult to estimate with any certainty but may have an impact on the beneficiaries of occupational pension schemes.
143. Deputy Pearse Doherty asked the Minister for Finance the legal framework that applies for the establishment of a mutual insurance fund; when this process was last reviewed; and if he will make a statement on the matter. [10502/19]
View answerAt the outset the Deputy should note that, as the term ‘mutual insurance fund’ is not one which is used within the Irish legal framework as it relates to life and non-life insurance, I am making the assumption for the purpose of this reply that you are referring to the establishment of a mutual insurance company.
As the Deputy is aware, as Minister for Finance, I am responsible for the development of the legal framework governing financial regulation. In this regard you should note that the Solvency II Directive (2009/138/EC), which was transposed into Irish law via the European Union (Insurance and Reinsurance) Regulations 2015 (S.I. No. 485 of 2015) and came into force from 1 January 2016 is the framework for the regulation of insurance undertakings in Europe. Solvency II sets out new, more comprehensive EU-wide requirements on capital adequacy and risk management for insurers. It was designed to modernise supervision, deepen market integration and increase the competitiveness of European insurers.
As I have no role in the day to day supervision of insurance companies, I consulted the Central Bank on the Deputy’s query. In response the Bank has advised that any insurance or reinsurance undertaking, including a mutual insurance company, wishing to establish its head office in Ireland and wishing to carry out the business of insurance or reinsurance must first obtain an authorisation from the Central Bank of Ireland in accordance with the European Union (Insurance and Reinsurance) Regulation 2015 – S.I. No. 485 of 2015.
In summary therefore in principle the same legal framework applies to a mutual insurer as applies to a non-mutual insurer.
144. Deputy Michael Healy-Rae asked the Minister for Finance his plans in relation to the reopening of the home renovation incentive scheme (details supplied); and if he will make a statement on the matter. [10740/19]
View answerSection 477B of the Taxes Consolidation Act 1997 provided for the Home Renovation Incentive (HRI), which was introduced in Budget 2014 and terminated in accordance with its sunset clause on 31 December 2018. I currently have no plans to re-open the scheme.
Under my Department's Tax Expenditure Guidelines, the introduction of new tax incentive measures should only be considered in circumstances where there is a demonstrable market failure and where a tax based incentive is more efficient than a direct expenditure intervention.
The HRI was introduced in 2014 at a time when there was considerable loss of employment within the construction sector, with the aim of addressing this market failure by stimulating increased activity in the sector. In the current context of a growing economy and construction sector, the initial objectives of the scheme have been fulfilled, and this support is no longer needed in the terms in which it was originally envisaged.
Furthermore, in light of the current housing supply shortage, and the need to deliver 25,000 additional housing units per annum over the period 2017-2021, there is a risk that the HRI could lead to increased competition for scarce resources within the construction sector, leading to upward pressure on construction costs and house prices. The potential for displacement of labour from work on new builds to work on home renovations would create a high opportunity cost of labour associated with HRI which was not present at the inception of the scheme.
Revenue advise me that, as of 2 January 2019, the cost to the Exchequer of the HRI was c. €105 million, with a further €65 million worth of credits yet to be claimed in respect of the incentive. As the Deputy will appreciate, I must be mindful of the public finances and the many demands on the Exchequer. Tax reliefs, no matter how worthwhile in themselves, lead to a narrowing of the tax base.
Finally, the Deputy makes reference in the details appended to the question to homeowners claiming back VAT under the HRI. I should clarify that the incentive operated as a relief from Income Tax (albeit at a rate of 13.5%) and not VAT, for qualifying individuals who carried out repairs, renovations and improvements to a home or rental property.
145. Deputy Frank O'Rourke asked the Minister for Finance the number of Irish citizens living here that do not pay income tax; the percentage of wage earners living here that do not pay income tax; the number and the percentage of wage earners living here that do not pay the universal social charge; and if he will make a statement on the matter. [10759/19]
View answerI am advised by Revenue that taxpayers are not required to declare their citizenship on Income Tax returns, therefore statistics relating specifically to Irish citizens are unavailable.
The overall numbers of taxpayers paying at each Income Tax rate, and those who are exempt from paying Income Tax, are available at link: https://www.revenue.ie/en/corporate/information-about-revenue/statistics/income-distributions/income-earners-it.aspx.
The same information for USC is available at link: https://www.revenue.ie/en/corporate/information-about-revenue/statistics/income-distributions/income-earners-usc-rates.aspx.
The information provided above shows information up to 2016, the most recent year for which tax returns are filed and processed. However, projections for 2019 are included in the Revenue Reckoner on page 3 at link: https://www.revenue.ie/en/corporate/information-about-revenue/statistics/ready-reckoner/index.aspx.
146. Deputy Brendan Griffin asked the Minister for Finance his views on a matter (details supplied) in relation to the VAT rate changes for health food supplements; and if he will make a statement on the matter. [10832/19]
View answerI am informed by the Revenue Commissioners that the standard rate of VAT applies to food supplements in general while a concession allows the zero rate to be applied to certain types of vitamins, minerals and fish oils.
The operation of this concession became extremely problematic as a result of efforts by certain businesses in the industry to extend the concession beyond the scope permitted. Consistent challenges to Revenue guidance and decisions on the VAT rating of products gave rise to serious concerns about compliance within the industry and unfair competition between compliant and non-compliant businesses. For these reasons, Revenue announced last December the decision to remove this concession with effect from 1 March 2019, which would have had the effect that all food supplements would be charged at the standard VAT rate.
Revenue has since deferred this date to 1 November 2019 in order to allow time for my Department to examine the policy and legislative options for the taxation of food supplements ahead of Budget 2020. This, in effect, means that the current VAT treatment of food supplements will remain in place. The zero rate of VAT applies to basic food supplements, such as vitamins, minerals and fish oils. All other supplements, such as those designed for cosmetic or body building purposes, apply at the standard VAT rate.
Independent of Revenue’s decisions on interpretation, I agreed during the recent Finance Bill to put in place a process that will conclude in the 2019 Tax Strategy Group Paper to examine some of the policy choices around the VAT treatment of food supplements. With this in mind, and cognisant of the opinions expressed by all parties on the VAT treatment of food supplements, I propose to issue a public consultation seeking engagement from all parties on the issue. I will also consult with my colleague the Minister for Health on the use of food supplements. This consultation will feed into the review undertaken by the Department in the tax strategy group process. Details on the proposed public consultation will be announced in the near future.
