Written Answers Nos. 59-71
59. Deputy Joan Burton asked the Minister for Finance the occupations (details supplied) covered in section 118(3)(a) Taxes Consolidation Act 1997; and the provision of accommodation that is exempt to tax. [15722/19]
View answer60. Deputy Joan Burton asked the Minister for Finance the estimated number of employees covered by the exemption to benefit-in-kind provided by section 118(3)(a) Taxes Consolidation Act 1997 in each of the years 2014 to 2018 by employer activity, in tabular form. [15723/19]
View answer61. Deputy Joan Burton asked the Minister for Finance the estimated cost of the exemption to benefit-in-kind provided by section 118(3)(a) Taxes Consolidation Act 1997 in each of the years 2014 to 2018, by employer activity, in tabular form. [15724/19]
View answer62. Deputy Joan Burton asked the Minister for Finance the estimated tax forgone in respect of the largest beneficiary of the exemption granted under section 118(3)(a) Taxes Consolidation Act 1997, in each of the years 2012 to 2018, in tabular form. [15725/19]
View answer63. Deputy Joan Burton asked the Minister for Finance the number of persons assessed for benefit-in-kind in respect to their employers providing housing for them over the past ten years to date; the rental costs of such properties on a monthly basis over that period; the highest and lowest rental cost properties, respectively; and the average of the rental cost, in tabular form. [15738/19]
View answerI propose to take Questions Nos. 59 to 63, inclusive, together.
I am advised by Revenue that Section 118 of the Taxes Consolidation Act 1997, as amended, is the general charging provision for the taxation of benefits in kind.
The section provides for a charge to income tax in respect of the provision of certain benefits in kind by a body corporate for a director or employee, which are not otherwise chargeable to income tax. These benefits in kind can include living or other accommodation, entertainment, domestic or other services, or other benefits or facilities of whatever nature. The charge is limited to the amount of the expense incurred by the body corporate in providing the benefit.
Section 118 (3)(a) provides for a specific exemption from the charge to tax in respect of living accommodation provided by a body corporate to an employee, if the employee is required by the terms of the employment to live there so that s/he can perform his or her duties properly. However, for the exemption to apply, the accommodation must be provided in accordance with a practice which, before 30 July 1948, commonly prevailed in trades of the class in question in relation to employees of the class in question. Moreover, the exemption does not apply where the employee is a director of the employing body in question, or of another body corporate which controls, or which is controlled by, the employing body. There is no set list of trades or professions which are eligible for this exemption, rather, it is a requirement of the exemption that the employer can prove eligibility if requested by Revenue.
In relation to Questions 15723/19, 15724/19, 15725/19 and 15738/19, I am advised by Revenue that where an employee is in receipt of a benefit from an employer which is not a taxable benefit, the employer is not required to report the details. Consequently, Revenue has no data on which to provide the information requested.
64. Deputy Mattie McGrath asked the Minister for Finance if his attention has been drawn to the recent report of the UN special rapporteur (details supplied) on the right to adequate housing and the financialisation of housing through preferential tax laws; and if he will make a statement on the matter. [15771/19]
View answerI am aware of the recent report concerning the Irish housing market by the UN special rapporteur on the right to adequate housing.
The Irish Government recognises the International Covenant on Economic, Social and Cultural Rights to which the Ireland has been a party since 8 December 1989. Article 11.1 of this Covenant recognises the right of everyone to an adequate standard of living for himself and his family, including adequate food, clothing and housing, and to the continuous improvement of living conditions.
Given the important implications which developments in the property market can have for the economy, my Department actively monitors developments in this sector on an ongoing basis, and published a paper on Institutional Investment in the Housing Market in February this year. The paper is based on CSO data up to 2017, the latest year available.
While there may be a perception that institutional investors are purchasing large amounts of housing stock, the data show that their activity has been limited in the context of the overall housing market. In 2017 — the latest year for which we have data – firms in this category were net purchasers of just 1 per cent of residential sales, or just over 500 units. Furthermore, from 2010 to 2017, net purchases by Real Estate Investment Trusts (REITs), real estate funds and private equity firms were less than 0.01 per cent of available units, or just 380 units.
On a national level, institutional investors remain a small minority of landlords. However, such investors do play an increasingly important role in the private rented sector.
Institutional investment in apartments is likely to be the driving force behind a significant recent increase in the number of apartment units granted planning permission in Dublin. In the first nine months of 2018, 57 per cent of units that were granted planning permission in Dublin were apartments, or just over 4,000 units. As a comparison, in the three year period between 2015 and 2017 the same amount were completed nationally.
Increased apartment building is a very positive development, both in terms of boosting overall supply and in relation to the National Planning Framework, which specifically targets more compact growth.
Recognising the importance of investment in the property sector, tax rules have been introduced to facilitate collective investment and to ensure that tax is imposed on funds deriving value from Irish property. For example, the function of the Real Estate Investment Trusts (REIT) framework is not to provide an overall tax exemption but rather to facilitate collective investment in rental property by removing a double layer of taxation which would otherwise apply on property investment via a corporate vehicle. REITs are required to distribute 85% of their property profits each year and Dividend Withholding Tax is collected on the distributions. In Finance Act 2016, Irish Real Estate Fund (IREF) provisions were introduced for certain investment funds deriving 25% or more of their value from Irish real estate assets, imposing a Dividend Withholding Tax on distributions to non-resident investors.
However, as Rebuilding Ireland makes clear, such investment can only be one aspect of a multi-pronged response to addressing current issues in the market. This is why the Government has provided record funding for social and affordable housing, to improve housing infrastructure and to address homelessness. Such funding has been accompanied by a range of regulatory and policy changes that facilitate increased supply of both owner occupier and rental housing, and policy measures to help contain rental price inflation such as Rent Pressure Zones.
65. Deputy Michael McGrath asked the Minister for Finance when he expects to progress legislative changes on insurance as part of the Consumer Insurance Contracts Bill 2017; the reason the legislative changes are not being drafted as a new Bill in its own right; and if he will make a statement on the matter. [15950/19]
View answerMy Department is currently working on developing legislative changes on insurance as part of the Consumer Insurance Contracts Bill 2017. As the Deputy is aware the purpose of the Bill is to reform and modernise the law of consumer insurance contracts and to "level the playing field so that the consumer is better equipped to stand up to the insurer". The Bill is based on the 2015 Law Reform Commission Report on Consumer Insurance Contracts.
At Second Stage the then Minister of State Eoghan Murphy TD provided the Government’s “support in principle for the objectives of the Bill”. He also noted the intention of the Minister for Finance to submit substantive amendments should the Bill reach Committee Stage.
A key recommendation that it is proposed to bring forward relates to an amendment to cater for Recommendation 8 of the Motor Report to require insurers to notify and engage with policyholders regarding claims submitted against their policy. This amendment would also apply to small businesses which have an annual turnover of €3 million or less and thus cover much of Recommendation 10 of the Employer/Public Liability Report. Other possible amendments which may be put forward at Committee Stage are currently being considered.
The reason the legislative changes are not being drafted as part a new Bill is because both I and Minister of State D’Arcy see the Consumer Insurance Contract Bill as an ideal vehicle for addressing insurance consumer related issues such as the one referred to above from an efficiency and effectiveness perspective. In addition, as all parties have worked very constructively together on important insurance legislation such as the Insurance (Amendment) Act 2018, and the Central Bank (National Claims Information Database) Act 2018 to date, I see no reason why this constructive engagement cannot continue.
66. Deputy Michael McGrath asked the Minister for Finance if the Central Bank has been consulted regarding the intention of a bank (details supplied) to securitise mortgage loans; and if he will make a statement on the matter. [15951/19]
View answerThe Central Bank of Ireland has advised that it cannot comment on specific transactions relating to regulated firms. In addition, the Central has commented as follows:
“While the strategy and commercial decisions of lenders are ultimately matters for the boards of those lenders, the Central Bank, as supervisor, requires that when loans are sold, all statutory legal protections are met. This includes ensuring the terms of existing restructuring arrangements are honoured.
“Where a loan is securitised or sold, that loan must be serviced by a bank, retail credit firm (RCF) or credit servicing firm (CSF) authorised and regulated by the Central Bank. This ensures the protections available to the borrower remain with the loan in all cases, regardless of whether the borrower has an alternative repayment arrangement in place or not. This can be achieved through re-engaging with borrowers; restructures; accounting write-downs; mortgage to rent; engaging through the Insolvency Service; sales and securitisations; and the legal process.”
67. Deputy Michael McGrath asked the Minister for Finance his views on the CSO report on indexing business insurance prices; his plans to roll out such an index; and if he will make a statement on the matter. [15952/19]
View answerI welcome the publication of the CSO’s report on the feasibility of collecting price information on the cost of insurance to businesses, which was published in February 2019.
Increasing the availability of data in relation to Employer and Public Liability Insurance is a matter which was discussed by the Cost of Insurance Working Group and its Report on the Cost of Employer and Public Liability Insurance (2018) recommends a number of actions to improve transparency in this area. Among these, Recommendation 1 requires the Central Statistics Office to consider the feasibility of collecting price information on the cost of insurance to businesses with this exercise to commence by the end of Q2 2018, with the CSO to report to my Department with the outcome of its review, and if it considers such an index feasible, make appropriate proposals.
The Central Statistics Office (CSO) submitted its report to the Cost of Insurance Working Group (CIWG) in January 2019 in this regard. In that report, the CSO identified seven potential methods of collecting price information on liability insurance. These data collection options were assessed against four criteria: (i) statistical quality, (ii) burden on respondents, (iii) meeting user needs, and (iv) cost. After analysing each of the options, the CSO found that four options were unfeasible and two further options, while technically feasible, would be extremely difficult to implement in practice. However, the CSO signalled to the CIWG that it will further examine a method that may be feasible. I understand that this method would use a commercially available technology solution to automatically price a high volume of representative profiles, i.e., customer profile such as an office-based company with 20 employees, good safety standards and no claims history, etc. The price quotations for these profiles would be tracked over time to estimate the overall change in premiums.
By way of update to the Deputy, this further examination is currently under way, and it is expected that the CSO will provide the CIWG with a final determination on feasibility during the summer months of this year. On the basis that it will be the CSO that makes proposals to the CIWG, regarding the feasibility of this potential approach, I will await the completion of this work, and the views of the CIWG following from that, prior to making a decision on the introduction of such an index.
68. Deputy Eamon Scanlon asked the Minister for Finance if persons aged 66 years of age and over are exempt from paying the €30 levy per credit card and DIRT; and if he will make a statement on the matter. [15980/19]
View answerI am advised by Revenue that there is no age-related exemption from the annual €30 levy that applies to credit card accounts. The charge is applied to an account regardless of the number of credit cards issued to the account.
I am also advised by Revenue that individuals are exempt from Deposit Interest Retention Tax (DIRT) on their interest income where they, or their spouse or civil partner, are aged 65 or over and their total income in a year (including the deposit interest) is below the annual exemption limit. For 2019 the exemption limits are €18,000 for a single individual and €36,000 for a married couple or civil partners.
The DIRT exemption does not automatically apply but must be claimed by making a declaration (on form DE1) to the financial institution where the account is held. This declaration states that a person’s income is less than the exemption limit and that the financial institution will be notified if this position changes. In the absence of this declaration, a financial institution is obliged to deduct DIRT. However, in any case where DIRT is deducted from the interest income of an individual who would have qualified for the exemption, he or she is entitled to claim a refund of that tax.
69. Deputy Bríd Smith asked the Minister for Public Expenditure and Reform if he will examine the possibility of widening the applicability of the home care credit in the calculation of pension entitlements for retired workers, specifically workers in semi-State organisations and bodies such as the Central Bank, who may have no entitlement to State contributory pensions and whose workplace pensions are disadvantaged by the refusal of the semi-State employers to give credit to workers for years out of the workforce raising families; if the legislation can be amended to cover such workers and ensure all women who raise families are given home care credits in calculating their final pensions; and if he will make a statement on the matter. [15848/19]
View answer72. Deputy Bríd Smith asked the Minister for Public Expenditure and Reform if legislation governing the pension entitlements of workers (details supplied) can be amended to allow women who raised families and took leave from their workplaces for those periods to avail of home care credits similar to those recently amended under the contributory pension scheme; and if he will make a statement on the matter. [15854/19]
View answerI propose to take Questions Nos. 69 and 72 together.
First, I should note that while I have overall policy responsibility in relation to public service pension schemes, questions about the pension schemes of any particular public service body should be referred to the Minister of the parent Department for the body concerned.
To address the general point raised, the Deputy will appreciate that the terms of occupational pension schemes (both private sector and public service pension schemes) are separate and distinct from the conditions laid down by the Department of Employment Affairs and Social Protection in relation to the State Pension (contributory).
For example, it is a fundamental feature of occupational pension schemes and of the regulatory framework within which they operate that pension entitlements are, in general, earned in respect of periods of paid employment and having regard to the amounts of remuneration earned. The State Pension (contributory), on the other hand, has regard to each person’s social insurance record, which may include periods in insurable employment, voluntary contributions and credited contributions.
Any attempt to insert home credits into public service occupational pension schemes would run counter to fundamental principles underpinning those schemes and would represent a very substantial cost to the State.
I would also point out that members of most pre-2013 public service pension schemes, including those of State bodies and bodies such as the Central Bank, will have the option to purchase notional pensionable service at full cost to themselves and subject to the normal purchase scheme limits, including compliance with Revenue limits in relation to the obtaining of tax relief on their purchase contributions, and so may compensate in this way for taking time out of work for home caring.
In relation to the Single Public Service Pension Scheme, which is the career average defined benefit pension scheme applicable to most new entrant public servants from January 2013, arrangements to facilitate the purchase of Single Scheme benefits additional to the benefits accrued based on pensionable remuneration earned by the Scheme member, are currently being finalised.
70. Deputy Denis Naughten asked the Minister for Public Expenditure and Reform the number and percentage of women on each State board under the remit of his Department on 8 March 2016 and 8 March 2019, respectively; and if he will make a statement on the matter. [15713/19]
View answerIn response to the Deputy's question, the Public Appointments Service (PAS) is the only body under the aegis of my Department which has a State Board.
As set out in the Public Service Management (Recruitment and Appointments) Act 2004, the Minister for Public Expenditure and Reform (in consultation with the Minister for Communications, Climate Action and Environment, the Minister for Health and the Minister for Justice and Equality) should appoint members of the Board of the Public Appointments Service. The CEO of PAS is a member of the Board of PAS on an ex-officio basis. The PAS State Boards process is used when making external appointments to the Board.
- On 8th March 2016 there were 5 women on the Board of PAS (56% of the Board).
- On 8th March 2019 there were 4 women on the Board of PAS (44% of the Board).
As the Deputy will be aware, details of the current membership of all State Boards are published on www.stateboards.ie
71. Deputy Kevin O'Keeffe asked the Minister for Public Expenditure and Reform the position regarding public servants that were forced to retire between 6 December 2017 and the commencement of the Public Service Superannuation (Age of Retirement) Act 2018 due to reaching 65 years of age; and if a report has been prepared on potential remedies to assist these workers. [15717/19]
View answer73. Deputy Barry Cowen asked the Minister for Public Expenditure and Reform when the report will be published as stipulated by section 3 of the Public Service Superannuation (Age of Retirement) Act 2018; if legislative changes will be brought forward if necessary; and if he will make a statement on the matter. [15946/19]
View answerI propose to take Questions Nos. 71 and 73 together.
On 5 December 2017, the Government made the decision to increase the compulsory retirement age to 70, for public servants recruited prior to 1 April 2004. Primary legislation was necessary in order to bring that change into effect. It was made clear at the time that until such legislation was enacted, the compulsory retirement age of 65, which applied to the vast majority of this cohort, remained in effect and pre-2004 public servants reaching that age would be required to retire.
I made special interim arrangements for the cohort of public servants who reached their compulsory retirement age of 65 after the Government Decision because, while they would be aware of the Government’s decision, they would be unable to avail of it. Those arrangements, clearly conveyed to all concerned, permitted these individuals to be rehired post-retirement for a period of 1 year until they reached the age of eligibility for the State Pension (Contributory). Without that special arrangement, they would have been required to cease working on reaching the age of 65.
The Public Service Superannuation (Age of Retirement) Act 2018 was enacted on 26 December 2018. Under the Act, any relevant public servant who had not already reached their compulsory retirement age of 65 before that date has a new compulsory retirement age of 70. Enactment of the legislation had no effect on those public servants who retired at 65 prior to the 26 December 2018 and who availed of a one year contract under the interim arrangements. The terms of their contracts continue to apply and they will cease working when they reach the age of 66.
Section 3 of the 2018 Act also provides that I, as Minister for Public Expenditure and Reform, within three months of the passing of the Act, would prepare and lay before the Oireachtas a report on the public servants who were forced to retire between 6 December 2017 and the commencement of the Act, due to reaching the age of 65 years, and on potential remedies to assist this cohort of worker. This Report was laid before the Oireachtas on 26 March 2019 and is publicly available on the Oireachtas and Department of Public Expenditure and Reform websites.
Whenever legislation is enacted to implement a change in policy, there has to be a dividing line between those who are affected by the change and those who are not. There are always people who will not benefit because they miss the deadline by a matter of days or weeks. Having considered all of the issues in the Report, I am satisfied that the interim arrangements were an appropriate temporary policy response at the time of the Government decision pending enactment of the legislation. The terms of those arrangements were clear, unambiguous and made known to those who availed of them. Accordingly, as set out in the report, I do not propose to make any changes to those terms, whether by legislative change or otherwise.
