Tuesday, 23 Jul 2019

Written Answers Nos. 232-256

National Debt

Questions (232)

Richard Boyd Barrett

Question:

232. Deputy Richard Boyd Barrett asked the Minister for Finance the amount of interest paid on the national debt in 2019 that was contracted since 2008. [33526/19]

Written answers

Minister for Finance

Exchequer cash interest paid in respect of Ireland’s National Debt for the six-month period January to June 2019 was just over €3.7 billion. This is a provisional, unaudited figure, as provided to me by the National Treasury Management Agency (NTMA). It is close to €160 million or just over 4% lower than the same period in 2018.

It includes interest paid on Government bonds, EU Programme loans, other medium/long term debt, short-term debt, and State Savings products.

It is difficult to say precisely how much of this interest relates to borrowing contracted since 2008 due to certain complexities in the debt portfolio. Examples of these complexities include (i) certain State Savings products allow additions, reinvestments and withdrawals before maturity and (ii) bonds can be auctioned or cancelled from any series regardless of their original issue date.

However, given that a large majority of the debt currently outstanding was issued since 2008, it is the case that the vast bulk of the interest paid in the first half of 2019 relates to debt contracted since 2008.

Motor Insurance Claims

Questions (233)

Richard Boyd Barrett

Question:

233. Deputy Richard Boyd Barrett asked the Minister for Finance the most up-to-date figures for the amount paid out annually in motor insurance claims from each insurance company. [33527/19]

Written answers

Minister for Finance

At the outset, it is important to note that as Minister for Finance, while I am responsible for the development of the legal framework governing financial regulation, I have no role in the day to day supervision of insurers. Consequently, my Department does not collect the type of information being sought by the Deputy. 

My officials contacted the Central Bank on this matter and they indicated that the regime for reporting insurance data to the Central Bank changed with the introduction of the Solvency II Directive in 2016. Under Solvency II, the Central Bank is now required to publish aggregate harmonised data that is consistent and comparable with other insurance supervisors in the European Union.

Individual firms are also required to produce a publicly available Solvency and Financial Condition Report (SFCR). The SFCR includes a detailed narrative report on the firm coupled with key quantitative reporting templates that contain details on premiums, claims, expenses, technical provisions, solvency and other information. This data is available on the Central Bank’s website. In line the with professional secrecy requirements of the Solvency II Directive, the Central Bank does not disclose details on individual insurance companies received via prudential returns beyond those which are included in the SFCR.

Under the Central Bank (National Claims Information Database) Act 2018, the Central Bank is now required to collect, study and publish data from insurance undertakings on the income generated by, and costs associated with, non-life insurance business. The National Claims Information Database (NCID) is the repository for this data. The purpose of the NCID is to increase transparency around the cost of claims by collecting data at a greater level of detail than previously collected. This will enable in-depth analysis and objective data-driven policymaking.

The NCID was one of the recommendations made by the Cost of Insurance Working Group, which was established within my Department in 2016.

Private motor insurance is the initial type of insurance in scope of the NCID, and the Central Bank started collecting data on 30 April 2019. The Bank is currently checking the data received to date for completeness and accuracy, and plans to publish the first report on private motor insurance before the end of 2019. It is important to note that any report or publication produced by the Central Bank under the Central Bank (National Claims Information Database) Act 2018 shall not identify any insurance undertaking or individual. 

Finally, in order to be as helpful as possible, I am providing aggregate data which has been extracted from Insurance Ireland’s annual “FactFile”. The most recent FactFile relates to 2017 and was published in June 2019. It shows the following data in relation to motor insurance claims costs for Insurance Ireland members:

Motor Insurance Type	Net Incurred Claims Costs €m (2017)
Private	778
Commercial	186
Total	964

Tax Code

Questions (234, 235, 236)

Richard Boyd Barrett

Question:

234. Deputy Richard Boyd Barrett asked the Minister for Finance the cost to date in 2019 of tax reliefs and exemptions available to property developers. [33528/19]

Richard Boyd Barrett

Question:

235. Deputy Richard Boyd Barrett asked the Minister for Finance the cost to date in 2019 of the tax reliefs and exemptions available to property owners. [33529/19]

Richard Boyd Barrett

Question:

236. Deputy Richard Boyd Barrett asked the Minister for Finance the cost to date in 2019 of the tax reliefs and exemptions available to landowners. [33530/19]

Written answers

Minister for Finance

I propose to take Questions Nos. 234 to 236, inclusive, together.

The tax reliefs and exemptions available to property developers, property owners and land owners are set out in the table. Where a tax relief or exemption falls under more than one heading, it has been listed under one heading only to avoid double counting. For example, section S604A of the Taxes Consolidation Act 1997 provides for capital gains tax relief on the disposal of land or buildings. The relief has been included under the heading “property owners”, as it may be claimed by any property owner (including a property developer) who is disposing of land or buildings. 

The costs to the Exchequer, where available, are published at the following links with the most recent data currently available:

- General tax expenditures: https://www.revenue.ie/en/corporate/information-about-revenue/statistics/tax-expenditures/costs-expenditures.aspx

- Certain property based tax reliefs: https://www.revenue.ie/en/corporate/information-about-revenue/statistics/tax-expenditures/property-reliefs.aspx

- LPT statistics: https://www.revenue.ie/en/corporate/information-about-revenue/statistics/local-property-tax/end-of-year-reports/local-property-tax-2018.aspx (exemption costs shown on page 5)

Legislative provision	Type of relief or exemption	Taxhead(s)
Available to property developers
Section 83D SDCA 1999	Stamp duty residential development refund scheme.	SD
Available to property owners
Section 482 TCA 1997	Relief for expenditure on approved buildings and gardens.	IT, CT
Section 658 TCA 1997	Farm buildings allowances.	IT, CT
Section 1003 TCA 1997	Donation of heritage items to approved body.	IT, CT, CGT, CAT
Section 1003A TCA 1997	Donation of heritage property to an Irish heritage trust.	IT, CT, CGT, CAT
Various sections of the TCA 1997	Industrial buildings allowances.	IT, CT
Various sections of the TCA 1997	Residential property based incentives.	IT, CT
S597AA TCA 1997	Revised Entrepreneur Relief	CGT
S598 TCA 1997	Disposals of business or farm on “retirement”	CGT
S598A TCA 1997	Relief on dissolution of farming partnerships	CGT
S599 TCA 1997	Disposals within family of business or farm	CGT
S600 TCA 1997	Transfer of business to company	CGT
S604 TCA 1997	Disposals of principal private residence	CGT
S604A TCA 1997	Relief for certain disposals of land or buildings	CGT
S604C TCA 1997	Exemption of certain payment entitlements	CGT
S606 TCA 1997	Disposals of work of art, etc., loaned for public display	CGT
S611 TCA 1997	Disposals to State, public bodies and charities	CGT
LPT	Exemptions for property owners	LPT
Section 89 CATCA 2003	Agricultural Relief	CAT
Section 86 CATCA 2003	Dwelling House Exemption	CAT
Available to land owners
Section 664 TCA 1997	Relief for certain income from leasing of farm land.	IT
Section 81AA SDCA 1999	Stamp duty exemption on transfers of land to ‘young trained farmers’.	Stamp duty
Section 81C SDCA 1999	Stamp duty exemption for consolidation of farmland, i.e. land both bought and sold within a specified period.	Stamp duty
S603A TCA 1997	Disposal of site to child	CGT
S604B TCA 1997	Relief for farm restructuring	CGT
S564 TCA 1997	Woodlands	CGT

Irish Strategic Investment Fund

Questions (237)

Richard Boyd Barrett

Question:

237. Deputy Richard Boyd Barrett asked the Minister for Finance the most up-to-date figures for the number of jobs created by the Irish Strategic Investment Fund in its commercial partnerships; and the locations in which these jobs were created by companies obtaining such investment. [33531/19]

Written answers

Minister for Finance

The information sought by the Deputy is available on the Ireland Strategic Investment Fund (ISIF) website at the following link: https://isif.ie/uploads/publications/ISIF-H1-2019-Final-For-Publication.pdf 

As at end December 2018, ISIF supported 32,068 direct and indirect jobs in the Irish economy. 

The regional breakdown of those jobs is set out in tabular format: 

Region	Jobs
Dublin	45%
Leinster ex Dublin	23%
Munster	24%
Connacht	5%
Ulster	3%

Tax Yield

Questions (238)

Richard Boyd Barrett

Question:

238. Deputy Richard Boyd Barrett asked the Minister for Finance the estimated amount that could be raised from imposing a 2% public health levy on the profits of private human health and pharmaceutical companies here, including nursing homes and home care agencies. [33532/19]

Written answers

Minister for Finance

The trading profits of companies in Ireland are generally taxed at the standard Corporation Tax rate of 12.5 per cent. Some of the main features of the current Corporation Tax regime are its simplicity and that it applies to a broad base. Changing this rate (or imposing additional levies of corporate profits) would involve increased complexity and could change the attractiveness of Ireland's corporate tax offering. I am informed by Revenue that it is not possible to accurately predict the effect that changes to the rate would have on the behaviour and decisions of large, multinational companies.

I am advised by Revenue that, based on the most recent figures available, on a straightforward mathematical basis and assuming no behavioural changes by companies, the potential yield from imposing a 2% levy on the taxable profits of private human health and pharmaceutical companies, including nursing homes and home care agencies, is tentatively estimated to be in the region of €235 million in a year.

Property Tax

Questions (239)

Richard Boyd Barrett

Question:

239. Deputy Richard Boyd Barrett asked the Minister for Finance the estimated full year cost of abolishing the local property tax. [33533/19]

Written answers

Minister for Finance

I am advised by Revenue that as Local Property Tax is forecast to collect €470 million in 2019, these receipts would be lost if the tax was abolished.

NAMA Portfolio

Questions (240)

Richard Boyd Barrett

Question:

240. Deputy Richard Boyd Barrett asked the Minister for Finance the details of empty properties and land banks that have not yet been sold with regard to the assets of NAMA; the negotiations that have taken place to acquire these homes for social and or affordable housing; and if he will make a statement on the matter. [33534/19]

Written answers

Minister for Finance

The Deputy will be aware that NAMA does not generally own properties, rather NAMA owns loans for which the properties act as security. 

I am advised that NAMA debtors and receivers own an estimated 1,150 hectares of land suitable for residential development in Ireland. NAMA regularly assesses the feasibility of these sites and, where development is deemed commercially viable, NAMA provides funding for the delivery of new residential units on the sites. I am advised that, to date, in excess of 10,000 units have been completed on residential sites secured to NAMA. Sites with a delivery capacity of 10,000 units are at the pre-planning or feasibility stages; these sites are either not commercially viable currently and/or have specific infrastructural requirements such as roads, water or sewerage that will need to be addressed by local authorities and other State bodies before a planning application can be lodged. I refer the Deputy to NAMA’s 2018 Annual Report which contains further information regarding NAMA’s residential delivery programme.

I wish to highlight that all NAMA-funded residential developments are subject to Part V planning requirements whereby 10% of the development must be provided to local authorities for social housing. Supplementary to this, NAMA continues to review its secured portfolio in order to deliver properties for social housing purposes (albeit at a lesser level than in previous years given the reduced portfolio size). The main method of social housing delivery is by way of direct sale (by a NAMA debtor or receiver) to a local authority or an approved housing body (AHB), or alternatively, by sale to NARPS (a NAMA Group entity) for onward long-term lease to an AHB. To date, the majority of properties delivered by NAMA for social housing purposes have been provided via NARPS. In total 2,544 properties have been delivered by NAMA for social housing purposes. This is supplementary to properties provided by way of Part V compliance by debtors and receivers. 

In addition, I am advised that sites with planning permission for a total of 159 properties have been sold to local authorities or AHBs. A number of other land sales, with potential to deliver approximately 200 residential units, are at varying stages of negotiation with local authorities or AHBs. 

I am advised that close to 100% of all secured housing units are occupied as there are currently less than 40 habitable vacant residential units within NAMA’s secured portfolio, excluding properties which are on the market or sale agreed. NAMA is currently working with its debtors and receivers regarding appropriate strategies for these 40 units, which includes assessing the suitability of the units for social housing.

It is important to note that NAMA’s debtors have the right to maximise the sales value of properties securing their loans so as to enable them to maximise their debt repayments. NAMA cannot require a debtor to take action which would reduce his/her repayment capacity, such as the sale of property at less than its market value.

Financial Instruments

Questions (241)

Richard Boyd Barrett

Question:

241. Deputy Richard Boyd Barrett asked the Minister for Finance the volume of commercial trade that took place in shares here in 2018. [33535/19]

Written answers

Minister for Finance

The transaction reporting regime under EU Regulation No 600/2014 on Markets in Financial Instruments (‘MiFIR’) obliges investment firms and credit institutions to report to competent authorities, relevant details of certain financial transactions that they execute.

The designated competent authority in Ireland is the Central Bank of Ireland and the details of the transaction reporting regime is set out in MiFIR, Article 26 and Commission Delegated Regulation (EU) 2017/590.

My officials contacted the Central Bank of Ireland and I understand that the Central Bank of Ireland was in receipt of 36 million transaction reports relating to Irish equities listed or traded on all trading venues (Regulated Market and MTFs) for 2018.

Additionally, Euronext Dublin, formerly the Irish Stock Exchange, publishes statistics and data related to trading activity on its website - https://www.ise.ie/Website/Market-Data-Announcements/Statistical-Reports/Euronext-Dublin-Monthly-Report-December-2018.pdf.

For 2018, the Euronext Dublin data available indicates there were approximately 7.5 million share trades in 2018 with an estimated turnover of approximately €98.1 billion.

Financial Services Sector

Questions (242)

Richard Boyd Barrett

Question:

242. Deputy Richard Boyd Barrett asked the Minister for Finance the volume of commercial trade that took place in derivatives here in 2018. [33536/19]

Written answers

Minister for Finance

The Central Bank has informed my officials that an analysis of the commercial trade in derivatives that took place in 2018 is not available. However, the 12th Triennial Central Bank Survey of Foreign Exchange and Over-The-Counter Derivatives Markets is currently being prepared by the Bank of International Settlements. This survey, conducted every three years since 1986, is the most comprehensive source of information on the size and structure of global foreign exchange and OTC derivatives markets. 

The previous survey, which was conducted in 2016 and is available on the BIS website  https://www.bis.org/publ/rpfx16.htm, showed that trading in foreign exchange spot and OTC derivatives markets averaged $5.1 trillion per day. 

More than 1,200 financial institutions in 53 countries, including Ireland, will contribute to the 2019 Triennial Survey.

The data on turnover in foreign exchange and OTC interest rate derivatives markets was collected from financial institutions in April 2019. The data on the outstanding notional amounts and gross market values of foreign exchange, interest rate, equity, commodity, credit and other OTC derivatives was collected at the end of June.

The BIS expects that preliminary results for turnover will be published in early September 2019 with the final results available in December 2019.

Universal Social Charge Yield

Questions (243, 244)

Richard Boyd Barrett

Question:

243. Deputy Richard Boyd Barrett asked the Minister for Finance the estimated amount expected to be raised by the universal social charge in 2019. [33538/19]

Richard Boyd Barrett

Question:

244. Deputy Richard Boyd Barrett asked the Minister for Finance the estimated amount expected to be raised by the universal social charge, USC from tax units paying more than €90,000. [33539/19]

Written answers

Minister for Finance

I propose to take Questions Nos. 243 and 244 together.

An estimated €3.8 billion will be raised by the Universal Social Charge (USC) in 2019.

In relation to Question 33539/19, it is assumed the Deputy is referring to taxpayer units earning in excess of €90,000. An estimated €2.2 billion will be raised in USC from such taxpayer units in 2019.

These figures are based on projected 2019 incomes, calculated on the basis of actual data for the year 2016, the latest year for which returns are available, and adjusted as necessary for income, self-employment and employment trends in the interim.

Tax Credits

Questions (245)

Michael McGrath

Question:

245. Deputy Michael McGrath asked the Minister for Finance the reason the DIRT tax credit was removed for first-time buyers in 2017; and if he will make a statement on the matter. [33718/19]

Written answers

Minister for Finance

Section 22 of the Finance Act 2014 inserted section 266A into the Taxes Consolidation Act 1997 (“TCA 1997”). Section 266A TCA 1997 provided for refunds of deposit interest retention tax (“DIRT”) which had been deducted from interest earned by a first time home purchaser. The relief was confined to the DIRT paid in the 48 months prior to the purchase date on savings up to a maximum of 20% of the purchase price of the home. The section was inserted with effect from 14 October 2014 with a “sunset clause” providing for an end date of 31 December 2017.

Vehicle Registration

Questions (246)

Michael McGrath

Question:

246. Deputy Michael McGrath asked the Minister for Finance the steps that can be taken in relation to an issue that has arisen following the importation of a vehicle by a person (details supplied). [33764/19]

Written answers

Minister for Finance

I am advised by Revenue that where a vehicle is moved from one Member State of the EU to another, a registration certificate from the first Member State is a required when re-registering the vehicle for Vehicle Registration Tax (VRT) purposes. This requirement is set out in the VRT section of the Revenue website at www.revenue.ie/en/importing-vehicles-duty-free-allowances/guide-to-vrt/vehicle-registration-tax/general-information-on-registration.aspx.

The person concerned has experienced difficulties in obtaining the original vehicle registration certificate from the vehicle registration authority where the used vehicle was purchased. Revenue has been in contact with the person and is assisting in relation to the difficulties encountered in registering the vehicle with a view to resolving the matter.

Brexit Preparations

Questions (247, 248, 249, 265)

Lisa Chambers

Question:

247. Deputy Lisa Chambers asked the Minister for Finance the number of companies that still need to obtain an EORI number; the number of companies to date that have received an individualised letter informing them of the need to obtain an EORI number as a consequence of Brexit; the number of companies that have yet to receive an individualised letter from the Revenue Commissioners; and if he will make a statement on the matter. [33868/19]

Brendan Smith

Question:

248. Deputy Brendan Smith asked the Minister for Finance the percentage of businesses trading with the UK that have the necessary customs registration requirements in place at present due to Brexit; and if he will make a statement on the matter. [33974/19]

Brendan Smith

Question:

249. Deputy Brendan Smith asked the Minister for Finance the information programmes to be put in place to advise businesses of customs requirements for trading post-Brexit; and if he will make a statement on the matter. [33975/19]

Lisa Chambers

Question:

265. Deputy Lisa Chambers asked the Minister for Finance the details of the commitment given to hiring additional customs officers; the number hired and trained to date; the number expected to be in place by 31 October 2019; and if he will make a statement on the matter. [34465/19]

Written answers

Minister for Finance

I propose to take Questions Nos. 247 to 249, inclusive, and 265 together.

I propose to take the questions together given the common theme of Brexit and Brexit preparations.

Revenue commenced the current phase of their Trader Engagement Programme on 12 July 2019. This engagement programme encompasses all businesses (approximately 92,000) that traded with the UK in 2018, identified by Revenue’s through their analysis of the VAT Information Exchange System (VIES) returns. Initially letters issued to some 14,500 businesses regarding their Brexit preparations. Further batches of letters will issue over the coming weeks, tailored by Revenue to features of the relevant cases within the overall 92,000 that traded with the UK in 2018. Some 65,000 businesses, which equates to approximately 70% of all businesses that traded with the UK in 2018, have not yet obtained an EORI number.

The following tables compiled by Revenue from data analysed from VIES returns for 2018 show that 85% of the import trade with the UK in 2018 was carried out by businesses who now have an EORI number while 84% of the export trade was carried out by businesses who now have an EORI number.

Statistics related to VIES Imports from the UK

Threshold value	Number of cases	Overall value of imports	% value of imports where cases have an EORI   registration	% value of imports where cases do not have   an EORI registration
Overall	92,360	€20.8 bn	85.1%	14.9%
< €5,000	47,193	€61.61 m	19.18%	80.82%
€5 - €50k	28,257	€522.07m	34.03%	65.97%
€50 -€100k	5,670	€400.84 m	48.27%	51.73%
€100k - €1m	8,854	€ 2.69 bn	70.63%	29.37%
Cases above €1m	2,386	€17.17 bn	89.74%	10.26%

 Statistics related to VIES Exports to the UK   

Threshold value	Number of cases	Overall value of exports	% value of exports where cases have an EORI registration	% value of exports where cases do not have an EORI registration
Overall	6,328	€15.4 bn	84.28%	15.72%
< €5,000	736	€ 1.48 m	64.82%	35.18%
€5 - €50k	1,659	€36.34 m	70.10%	29.90%
€50 -€100k	676	€49.10 m	73.50%	26.50%
€100k - €1m	2,049	€744.20 m	82.77%	17.23%
Cases above €1m	1,208	€14.63 bn	84.08%	15.92%

  Revenue’s focus is on supporting and assisting those businesses that will be immediately impacted by Brexit. Revenue are writing to traders, on a phased basis, outlining the most critical Brexit preparation steps that businesses must take in order to be ready by 31 October. The letters outline a number of Brexit preparedness steps including:

- Obtaining an EORI number

- Undertaking supply chain, logistics and cash flow assessments

- Considering arrangements for the submission of Declarations and if a Customs Agent is required

- Considering the payment of taxes and duties

- Ensuring compliance with product certification requirements, and

- Additional considerations if involved in trade covering animal or plant products and the certifications necessary.

Revenue staff will make direct follow up contact with the relevant businesses subsequent to the issue of the letters to discuss Brexit preparations and Revenue’s support for traders with their preparations. 

In the context of extensive and detailed Brexit preparedness and contingency work across all Government Departments and Agencies, Revenue determined that in a ‘Central Case’ scenario (i.e. an orderly withdrawal of the UK from the EU, to include a transition period until the end of 2020), an additional 600 Revenue staff would be required.

In September 2018, the Government granted approval in principle for the phased recruitment of an additional 600 Revenue staff to meet the challenges posed by Brexit.

Budget 2019 provided Revenue with an additional €10 million pay provision, for 270 of the additional 600 staff to be recruited during 2019, to manage an orderly UK withdrawal. Following a Government decision in December 2018, it was agreed to accelerate Revenue’s recruitment programme in preparation for Brexit.

In 2019 to date, Revenue has assigned over 600 staff from open and interdepartmental competitions across a range of grades with the majority of these assigned to customs related roles in preparation for Brexit. As serving staff take up their new Brexit-related positions, Revenue backfills the vacancies created, from panels of candidates established in its general recruitment activity.

In the period from 2017 to date, Revenue has assigned and trained over 450 additional staff for customs related roles, deployed across a range of functions, with the majority assigned to import and export trade facilitation activities and policy and operational roles. Revenue will continue to adjust its recruitment and training plans in response to business needs, including Brexit-related developments.

Question No. 250 answered with Question No. 146.

Financial Institutions Levy

Questions (251)

Fiona O'Loughlin

Question:

251. Deputy Fiona O'Loughlin asked the Minister for Finance his views on the Central Bank industry levy increase; and if he will make a statement on the matter. [34010/19]

Written answers

Minister for Finance

The funding strategy for financial regulation seeks to increase the proportion of financial regulation costs chargeable to industry to 100 per cent over the medium term, thereby reducing taxpayer subvention and recovering the full cost of financial regulation activity from regulated firms. The objective of this strategy is to adhere to the user pays principle in relation to financial regulation and to free up State funds for wider public service priorities. 

This has been a longstanding objective as set out in the feedback statement on CP95 ‘Funding the Cost of Financial Regulation’ in which the Department of Finance and the Central Bank jointly set out a strategic intention to move towards full industry funding on a phased basis.

The recovery rate applicable to credit institutions, insurance, investment firms and fund service providers increased from 65 per cent to 80 per cent in 2018.

Tracker Mortgages

Questions (252)

Michael McGrath

Question:

252. Deputy Michael McGrath asked the Minister for Finance the number of tracker mortgage cases in the internal complaints procedures in the banks; the number of tracker mortgage cases with the Financial Services and Pensions Ombudsman; the number of tracker mortgage cases that have been appealed to the High Court; and if he will make a statement on the matter. [34062/19]

Written answers

Minister for Finance

The Central Bank has advised that the supervisory phase Examination has now concluded and the final Tracker Mortgage Examination (TME) report was published by the Bank on 16 July 2019 (https://www.centralbank.ie/docs/default-source/consumer-hub-library/tracker-issues/update-on-tracker-mortgage-examination---july-2019.pdf?sfvrsn=6).

While the Bank is satisfied that the supervisory phase of the Examination can be concluded, it has also indicated that it will continue to monitor the outcome of any tracker related complaints, appeals and court cases.

The Tracker Examination Framework required lenders to establish an independent appeals process to deal with customers who were dissatisfied with any aspect of the redress and compensation offer made to them by their lender. The Central Bank’s final TME Report states that at 31 May, c. 3,300 customers had appealed to their lenders the original compensation offer they received. This represents c. 10 per cent of customers who have received payment. In respect of appeals lodged at end May, c. 1,800 appeal outcomes have been decided upon by Appeals Panels but with a further 1,500 still to be decided. Of the c. 1,800 appeals decided, 55 per cent have been upheld/partially upheld and 45 per cent have not been upheld. The majority of appeals upheld arise from awards for additional detriment of which the lender may not have been aware at the time of the original redress and compensation awarded. At 31 May 2019, the various banks Appeals Panels have awarded c. €7 million additional compensation to affected customers.

Furthermore, where affected customers have complained to their lender including where they remain dissatisfied with the outcome of their complaint, and do not accept the findings of the Appeals Panels, they also retain the option to bring a complaint to the Financial Services Pensions Ombudsman (FSPO). Customers deemed by their lender not to be affected by tracker related failures also have the right to make a complaint on their individual case within specific time limits set out in the FSPO’s governing legislation. The FSPO has the power to direct both compensation and rectification as appropriate. I have been advised by the Financial Services and Pensions Ombudsman that at the end of June 2019, it had 1,141 tracker mortgage related complaints on hand.

The Central Bank is also committed to monitoring the outcome of any court cases relevant to the tracker issue and more generally is also committed to conducting more frequent, targeted conduct supervision of those firms that pose the greatest potential harm to consumers.

Credit Union Regulation

Questions (253)

Michael McGrath

Question:

253. Deputy Michael McGrath asked the Minister for Finance the revenue received by the Central Bank from the credit union industry funding levy; the extra revenue the Central Bank will receive each year to 2022 from the levy; if an impact assessment was undertaken by either the Central Bank or his Department; if so, if the impact assessment will be published; and if he will make a statement on the matter. [34063/19]

Written answers

Minister for Finance

I have been informed by the Central Bank that a key element of their 3 year funding strategy is to increase the overall recovery rate of the cost of regulation from industry, thereby reducing the level of taxpayer subvention. 

Since 2015, following a public consultation, the financial services industry has moved from paying approximately half of the costs of financial regulation to paying approximately two-thirds of these costs in 2018. The Central Bank recently published the expected path towards 100% industry funding over the next five years. While the majority of industry funding categories (regardless of size) will move to 100% funding over the period 2020 to 2024, the recovery rate for credit unions will move to 50% for the 2021 levy cycle (payable in 2022) with any further proposed increases subject to public consultation and Ministerial approval.

The impact of the increase in recovery rates is set out in Table 1 which assumes that the baseline cost of regulation is the same as the 2018 cost of regulating the sector.

While in 2018 all other industry funding categories funded a minimum of 65% of the cost of financial regulation, the credit union sector contributed 9% of the cost of regulation (due to the cap on the levy payable by credit unions) and 1.2% of levy income.

Table 1: Estimated impact on levy income from credit unions of increase in recovery rates  

Cost of Regulation	Cost of Regulation	Implied Recovery Rates	Levy Income
	€'M		€'M
2018 Actual	16.4	10%	1.7

	Assumed baseline cost of Regulation	Ministerial Approved Recovery Rate	Projected Levy	Additional Levy Income
Projected	€'M		€'M	€'M
2019	16.4	20%	3.3	1.6
2020	16.4	35%	5.7	4.1
2021	16.4	50%	8.2	6.5
2022	16.4	50%	8.2	6.5

The Central Bank has further informed me that there is no requirement to carry out an impact assessment for the Industry Funding Levy, nor has one been carried out as levies have increased in recent years across all industry sectors other than credit unions. While there is a requirement under legislation for the Minister for Finance to have regard to the financial viability of credit institutions when prescribing certain levies, no such legislative requirement applies to the Central Bank when introducing a levy to fund the cost of regulation.

Personal Insolvency Arrangements

Questions (254)

Michael McGrath

Question:

254. Deputy Michael McGrath asked the Minister for Finance if a personal insolvency arrangement is deemed to be a benefit-in-kind to an employee of a bank who also has a loan with that bank; and if he will make a statement on the matter. [34065/19]

Written answers

Minister for Finance

It is assumed the Deputy is seeking confirmation as to whether, under a Personal Insolvency Arrangement, the write-down of a loan, in whole or in part, relating to an employee of a bank will give rise to a benefit-in-kind charge for tax purposes.

Section 122(3) of the Taxes Consolidation Act (TCA) 1997 provides that where a loan is made by an employer to an employee and the loan, or any interest due on that loan, is written off, in whole or in part, then the amount written off is treated as a taxable benefit in the hands of the employee (or former employee where the employee has left the bank’s employment). It is the responsibility of the bank, as the employer, to identify any benefits to staff to which section 122(3) TCA 1997 applies and to compute and pay the tax liability.

I am advised by Revenue that its approach with respect to the possible application of section 122(3) in the case of loan restructurings, involving the full or partial write-down for an employee or former employee, is that where non-preferential loan(s) are/were originally advanced by a bank to the employee in the normal course of business and the bank can show to Revenue’s satisfaction that the outcome of the write-down would be the same for that employee or former employee as it would be for a non-employee customer of the bank, then, no liability to income tax will arise in respect of the write off of the non-preferential loan(s).

If the employee or former employee has only preferential loans from the bank then section 122(3) TCA 1997 applies to give rise to a tax liability on the full amount written off by the bank.

If there are a number of loans, including preferential loans, then, regardless of the order of the write off, the amount written off has to be first set against the amount of any preferential loan(s) outstanding and any tax liability arising on the preferential loan(s), so treated as written off first, has to be paid in accordance with section 122(3) TCA 1997.

Personal Insolvency Arrangements

Questions (255)

Michael McGrath

Question:

255. Deputy Michael McGrath asked the Minister for Finance the fitness and probity implications should a person who works in a bank require a personal insolvency arrangement referring to the seniority of the employee in the bank and the service that employee provides; and if he will make a statement on the matter. [34066/19]

Written answers

Minister for Finance

This is a matter for the Central Bank as section 50 of the Central Bank Reform Act 2010 provides that the Central Bank may issue a code setting out standards of fitness and probity. Pursuant to this power, the Central Bank issued the “Fitness and Probity Standards” (current version issued in 2014).  

The Fitness and Probity Standards apply to persons performing controlled functions, including pre-approval controlled functions, in regulated financial service providers. The Fitness and Probity Standards do not apply to persons not performing controlled functions.

Section 5 of the Fitness and Probity Standards (“Financial Soundness”) provides as follows:

“5.1 A person shall manage his or her affairs in a sound and prudent manner.

5.2 Without prejudice to the generality of paragraph 5.1, a person must be able to demonstrate that his or her role in a relevant function is not adversely affected to a material degree by the fact that one or more of the following may be applicable:

(a) the person has defaulted upon any payment due arising from a compromise or scheme of arrangement with his or her creditors or made an assignment for the benefit of his or her creditors;

(b) the person is subject to a judgment debt which is unsatisfied, either in whole or in part, whether in the State or elsewhere;

(c) the person is or has been the subject of a bankruptcy petition, whether in the State or elsewhere;

(d) the person has been adjudicated a bankrupt and the bankruptcy is undischarged, whether in the State or elsewhere; or

(e) a person was a director of an entity which has been the subject of insolvency.”

Regulated financial service providers must not allow a person to perform a controlled function unless they are satisfied that the person complies with the Fitness and Probity Standards. In this regard, Section 13.3 of the Central Bank’s “Guidance on the Fitness and Probity Standards” provides that “the Central Bank expects regulated financial service providers to consider the responsibilities of the specific function and to determine the specific competencies, and level of probity that should be expected of a person performing that specific controlled function in the regulated financial service provider.” Sections 13 to 18 of the Guidance provide further information.

Separately, the Central Bank may assess the fitness and probity of a person performing a controlled function role and may take regulatory action where the person is not of such fitness and probity as is appropriate to perform the controlled function, or otherwise does not comply with the Fitness and Probity Standards. All such assessments are carried out on a case-by-case basis by reference to the specific controlled function role being performed.

Banking Sector Data

Questions (256)

Michael McGrath

Question:

256. Deputy Michael McGrath asked the Minister for Finance if the Central Bank has a record of the number of borrowers who are employees of their lending financial service institution; if so, the number of borrowers by loan type and in arrears; and if he will make a statement on the matter. [34067/19]

Written answers

Minister for Finance

I have been informed by the Central Bank that it does not have the information that the Deputy is requesting.