Cybersecurity Data

Questions (61)

Joan Burton


61. Deputy Joan Burton asked the Minister for Finance if his attention has been drawn to a recent report by an organisation (details supplied) which states that there is increased vulnerability of payment systems to information technology failures and cyber attacks; his plans to ensure the integrity of payment systems here as businesses and public bodies move increasingly to electronic payments and towards a cashless society; and if he will make a statement on the matter. [46551/19]

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Written answers (Question to Finance)

My officials were aware of the publication of this report. To first address the point about moving towards a cashless society, earlier this year I launched a study commissioned by my Department benchmarking Ireland’s payment industry. That study found that cash remains a vital part of the Irish payment system and concluded that a fully cashless society would not be an appropriate objective.

In relation to payment systems, I am informed by the Central Bank that Ireland’s retail electronic payments are processed by pan-European based payment systems, primarily the Eurosystem’s large value payment system TARGET2 and EBA Clearing’s retail payments system STEP2.

Both of these systems have high levels of reliability and resilience, resulting from the very high standards to which they are held. Both systems are subject to Eurosystem oversight, with the ECB having the leading oversight role. Both are assessed against the Systemically Important Payment Systems Regulation, which imposes strict requirements, including in relation to operational risk, business continuity, credit risk, liquidity risk, settlement finality, and participation default rules and procedures.

From the perspective of the Central Bank’s supervision of financial institutions that participate in the payments system in Ireland (i.e. banks, payment institutions, etc.), the risks associated with information technology and cyber-attacks are a key concern given the potentially serious implications for prudential soundness, consumer protection, financial stability and the reputation of the Irish financial system.

Strengthening the operational and cyber resilience of the financial system is a key priority for the Central Bank. This includes enhancing the resilience of the firms within that system to operational disruptions due to information technology issues, particularly as these issues can negatively impact on consumers.

The volumes of retail and wholesale payments settled daily are substantial, and issues occur from time to time. Where this happens, the vast majority are resolved within the business day. The Central Bank expects financial institutions to take all necessary steps to minimise the number of occurrences and, when they happen, to respond with appropriate urgency and to minimise the impact on consumers. These expectations are communicated to all firms as part of ongoing supervisory engagement.

Insurance Coverage

Questions (62)

Michael McGrath


62. Deputy Michael McGrath asked the Minister for Finance the steps he is taking to ensure that insurance cover is made available to businesses in the wider leisure sector at affordable rates; and if he will make a statement on the matter. [46671/19]

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Written answers (Question to Finance)

I acknowledge the general problems faced by businesses in the wider leisure sector, particularly because of the withdrawal of a key insurer that was operating in that market. As the Deputy is aware, the pricing of insurance products is a commercial matter for insurers and neither I, nor the Central Bank of Ireland, have any function in this matter. This position is reinforced by the EU framework for insurance which expressly prohibits Member States from adopting rules which require insurance companies to obtain prior approval of the pricing or terms and conditions of insurance products. Consequently, the Government cannot direct insurance companies to cover certain types of risk, such as those in the leisure sector.

Unfortunately, there is no single policy or legislative “silver bullet” to immediately remedy this issue. In addition, there are many constraints faced by the Government in trying to address it, in particular the fact that for constitutional reasons, it cannot direct the courts as to the award levels that should be applied and as set out above it cannot direct insurance companies as to the pricing level which they should apply.

I wish to emphasise however that insurance issues remains a priority for the Government. The Cost of Insurance Working Group (CIWG), chaired by Minister of State Michael D'Arcy, TD is continuing to work to implement the recommendations of both of its reports. Its most recent Progress Update was published in July and shows that the vast majority of recommendations and actions due by Q2 2019 have been completed. To that end, some key achievements to date from the two reports, include the following:

- The enactment of the Judicial Council Act 2019, in July which provides for the establishment of a Personal Injuries Guidelines Committee to provide guidelines to replace the Book of Quantum;

- Reforms to the Personal Injuries Assessment Board through the Personal Injuries Assessment Board (Amendment) Act 2019 to strengthen the powers of PIAB around compliance with its procedures;

- Amendments to the Civil Liability and Courts Act 2004 to make it easier for businesses and insurers to challenge cases where fraud or exaggeration is suspected;

- The establishment of the National Claims Information Database in the Central Bank to increase transparency around the future cost of private motor insurance; the Central Bank is currently reviewing the possibility of expanding is scope to cover business insurance; and

- various reforms of how fraud is reported to and dealt with by An Garda Síochána, including increased co-ordination with the insurance industry, as well as the recent decision by the Garda Commissioner to develop a divisional focus on insurance fraud which will be guided by the Garda National Economic Crime Bureau (GNECB) which will also train Gardaí all over the country on investigating insurance fraud, and the recent success under Operation Coatee, which targets insurance-related criminality.

I believe that these reforms are having an impact with regard to private motor insurance (CSO figures from August show that the price of motor insurance is now 27.1% lower than the July 2016 peak). The Government is determined to continue working to ensure that these positive pricing trends can be extended to other forms of insurance, including those relevant to businesses. However, undoubtedly the single most essential challenge which must be overcome if there is to be a sustainable reduction in insurance costs particularly for businesses and other operators in the leisure sector is to bring the levels of personal injury damages awarded in this country more in line with those awarded in other jurisdictions, and the establishment of the Judicial Council is crucial in this regard.

In conclusion, I would like to assure the Deputy that important reforms are taking place and that I am confident that if the level of awards are reduced, then the insurance cost and coverage issues that are being experienced by the leisure sector should recede.

EU Budget Contribution

Questions (63)

Éamon Ó Cuív


63. Deputy Éamon Ó Cuív asked the Minister for Finance the expected annual increase in the net financial contribution by Ireland to the EU if the UK leaves the EU by the 31 January 2020; and if he will make a statement on the matter. [46024/19]

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Written answers (Question to Finance)

Given that the UK represents one of the largest net contributors to the EU Budget, Brexit is likely to have a significant impact on the contributions of all Member States, including Ireland’s. The exact impact will be dependent on the nature of the final agreement between the EU and the UK regarding its involvement with the EU Budget post-Brexit.

Under the Withdrawal Agreement between the EU and UK, the UK had agreed to continue to pay into the EU Budget for the remaining years of the current MFF, as if it was still a member. This would result in no additional impact on Ireland’s contributions or receipts up to the end of the current Multiannual Financial Framework (MFF) in December 2020.

However, if that Withdrawal Agreement is not concluded and there is a no-deal Brexit, the impacts on the EU Budget will need to be clarified. Under this scenario the UK would need to outline its intentions regarding whether it still intended to continue making payments towards the current MFF.

The European Commission has prepared a contingency proposal which establishes a legal basis for the UK to continue to both make payments into the EU budget and to access receipts from it for the year 2020 even in the case of a no-deal scenario. This framework seeks to minimise any unnecessary disruption for beneficiaries of EU spending programmes at the time of withdrawal.

If the UK decided not to continue with EU budget payments, then both the Commission and Member States would need to consider the most appropriate way forward. However, the gap would likely need to be mitigated by either increased contributions from other Member States, reductions in EU funding programmes, or a combination of both.

My Department monitors and analyses the potential impact of Brexit on our EU budget contributions on an ongoing basis. This analysis is based on the best information and data available at the time in question.

Credit Register Administration

Questions (64)

Joan Burton


64. Deputy Joan Burton asked the Minister for Finance if his attention has been drawn to a breach of the Central Credit Register by a bank (details supplied) that resulted in customers being the subject of multiple credit inquiry requests to the registry and a representative body resulting in potential adverse effect on their credit reports by the register and the body and other future lending applications and a digital footprint which cannot be removed for five years; his plans to address same; and if he will make a statement on the matter. [46550/19]

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Written answers (Question to Finance)

The Central Bank has established the Central Credit Register (CCR) under the Credit Reporting Act 2013 (the Act).

The Act obliges lenders to:

- submit personal and credit information to the CCR every month on loans of €500 or more;

- access the CCR for an applicant’s credit report, when considering loan applications of €2,000 or more.

Lenders may also, if they wish, access the CCR for an applicant’s credit report when considering loan applications for less than €2,000. Borrowers may request their credit report at any time free of charge at

A sample CCR credit report and explanation is available in the Central Bank’s factsheet at This indicates that a credit report has four parts:-

Part one shows the personal information submitted to the CCR in respect of a credit information subject.

Part two shows a summary of the active and closed credit agreements entered into by the borrower, and also information on credit applications made by the borrower. In respect of credit applications, the information in this part will include the type of loan product sought and the amount involved. (However, it should be noted that information on credit reports simply records the fact that a credit application has been made and that it does not record whether or not a credit application was approved by a lender or not taken up by the borrower; furthermore, in respect of credit applications, the name of the lending institution to which a credit application was made will be displayed only on the credit report requested by the borrower). Pursuant to section 8 of the Act, information on credit applications is retained for a period of six months (and is available for inclusion in part two only if a credit report is requested during that period).

Part three provides detailed information on outstanding credit agreements.

Part four, which is called the ‘footprint’, is a record of all the dates that a credit report has been seen, by whom and the purpose of the enquiry, and such data is kept pursuant to section 17 of the Act. (On the credit report that is produced for lenders, this ‘footprint’ is visible only for two years but the name of the lender is not published. On the credit report that is produced for borrowers, the footprint is visible for five years, and the name of the lender is published).

In respect of the specific incidence raised by the Deputy, the Central Bank has advised that the lender in question had a valid reason for accessing each applicant’s credit report once. However, searches were duplicated in error due to a technical issue experienced by the lender. This error has since been corrected and the “credit application summary” in part 2 of the relevant credit reports now correctly contains one credit application.

However, as a separate issue and as indicated above, each time a borrower’s credit report is accessed, a digital footprint is created on the credit report. In this case, in the interests of transparency, the digital footprint remains as it properly reflects that more than one enquiry was made. The Central Bank advises that there is no information to suggest that any individual borrower has been disadvantaged as a result of this incident. A borrower who believes that they may have been disadvantaged should contact the lender in question to discuss the matter. As already stated, borrowers can also request their credit report free of charge at Borrowers have a right to request an amendment to any information that they believe is incomplete, inaccurate or not up to date.

It is important to note that the CCR does not determine if a credit application is approved or not. That decision is solely made by the lender, and aside from the content of the credit report, the decision will also include consideration of other matters such as borrower’s income and assets etc.

More generally, under the Act, lenders are required to ensure that personal data is accurate, complete and up to date. The Central Bank expects that lenders have robust systems and controls in place to ensure the integrity of the data that they submit to the CCR. In the event of an error in reporting, the Central Bank expects the lender to take immediate steps to correct the data and separately to identify the root cause and ensure that the appropriate solution is applied to avoid any recurrence of the error.

The Central Bank also expects lenders to be aware of their own obligations under data protection law, in particular whether a data breach should be reported to the Data Protection Commission. Lenders may under data protection provisions also be required to write to customers explaining what has happened and what action they have taken to correct the errors. This may also require a report being made to the Data Protection Commission by the lender. Private credit bureau operators, which do not fall within the statutory or regulatory remit of the Minister or Central Bank, are nevertheless also subject to these general data protection legislation and requirements.

Help-To-Buy Scheme

Questions (65)

Paul Murphy


65. Deputy Paul Murphy asked the Minister for Finance if his Department has carried out a study regarding the effectiveness of the help to buy scheme. [45239/19]

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Written answers (Question to Finance)

In 2017 I commissioned and published an independent review of the Help to Buy (HTB) incentive and last year, I commissioned an independent Cost Benefit Analysis (CBA) of HTB. Both reports are available on my Department’s website.

In brief, the CBA, confirmed the findings of the independent review as follows:

- Prices: While there may have been a very small increase in prices attributable to the introduction of the incentive, the primary driver of house prices remained the continued misalignment between demand and supply.

- Supply: The evidence suggested that following the introduction of the incentive there was a marked increase in supply which can be attributed in part to HTB.

- Affordability: The analysis also found that availability of HTB had reduced the time to save for all claimants and improved the overall affordability of housing for these individuals.

- Benefit/Cost Ratio: The analysis found a benefit-cost ratio of 1.28 indicating a moderate positive effect for the incentive.

Tax Reliefs Availability

Questions (66)

Michael Healy-Rae


66. Deputy Michael Healy-Rae asked the Minister for Finance if consideration will be given to a proposal (details supplied) in relation to tax incentives for persons who provide rental accommodation; and if he will make a statement on the matter. [45804/19]

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Written answers (Question to Finance)

I assume from the details accompanying his question that the deputy is primarily referring to natural persons acting as landlords and income tax based measures.

The Report of the Working Group on the Tax and Fiscal Treatment of Landlords examined the general issue raised in the Deputy's question. It was submitted to me for consideration in September 2017, in advance of its publication on Budget Day, 10 October 2017. The report put forward options for further consideration, rather than recommendations, and any further consideration would require the participation of several Departments and organisations, including my own Department. The ten options are split into short, medium and long-term options. Five potential short-term options were identified as measures which could potentially be implemented within 18 months, i.e. within Budgets 2018 and 2019.

One short-term option was to increase the mortgage interest deduction available to landlords. In this context, it should be noted that in Budget 2017, a phased unwinding of the restriction on interest deductibility over five years for all residential landlords was initiated. The second step, an increase from 80% to 85% deductibility, took effect from 1 January 2018. Budget 2019 accelerated progress in this area and, from 1 January 2019, the restoration of full mortgage interest deductibility for landlords of residential property has been in place.

A further option was to consider introducing Local Property Tax (LPT) deductibility for landlords. Earlier this year, the report of the interdepartmental review of LPT noted that LPT is a relatively small expense and therefore is unlikely to make a significant difference to the position of any individual landlord in cash terms and so may not be regarded by landlords as a sufficient measure to encourage them to stay in or enter the rental market. The report also found that the measure would also have a deadweight cost in respect of landlords who do not intend to leave the rental market and would create a more favourable position for landlords of property compared to owner-occupiers, as owner-occupiers cannot claim a tax deduction for LPT.

In Budget 2018 I introduced another of the short-term options, deductibility for pre-letting expenditure for previously vacant properties. This measure applies to residential premises which have been vacant for at least 12 months and which are then let after the date of the passing of the Finance Act 2017, i.e. after 25 December 2017. The expenditure is allowed as a deduction against rental income from that premises. It applies to expenses that would be allowable if they had been incurred while the property was let, such as the cost of repairs, insurance, maintenance and management of the property. Certain limitations are in place regarding this measure, for example the expenditure must have been incurred in the 12 months before the premises is let as a residential premises. The total deduction allowed is capped at €5,000 per vacant premises and the deduction will be clawed-back if the property ceases to be let as a residential premises within four years of the first letting. I prioritised this option as it was specifically designed to encourage an overall increase in housing supply by bringing currently vacant property back into residential use.

The final short-term option was to improve the collection and sharing of data on the rental accommodation sector. A significant issue that hampered the progress of the Working Group was a lack of robust data on various elements of the housing market, due to the differing metrics used by the various agencies. The Housing Analytics Group, chaired by the Department of Housing, Planning and Local Government, is currently active and a number of Departments and agencies are involved in its work, including the Residential Tenancies Board, the Central Statistics Office (CSO), Revenue and the Department of Finance.

Five of the options put forward in the report were medium-term and long-term options. Medium-term options are measures which work with the current tax system but might take longer to develop and implement, and as such would require a longer lead-in period. The long-term options look at the potential for more fundamental changes to the tax system, and so would require significantly greater resource commitments to progress. Consideration of these options will continue within the relevant time frames.

As the Deputy will be aware, taxation is only one of the policy levers available to the Government through which to boost rental and overall housing supply and that, in line with the Tax Expenditure Guidelines, consideration of whether a tax measure is the most appropriate policy tool for a given purpose would be required. Ireland’s past experience with tax incentives in the housing sector strongly suggests the need for a cautionary stance when considering intervention in the rental sector. There are many competing priorities which must be considered when deciding which policy measures to introduce and the rental sector is just one of many other sectors that may require assistance and intervention.

NAMA Operations

Questions (67)

Pearse Doherty


67. Deputy Pearse Doherty asked the Minister for Finance the expected NAMA surplus to be transferred to the Exchequer in 2020; the way in which it will be utilised; and if he will make a statement on the matter. [46688/19]

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Written answers (Question to Finance)

As part of its Annual Report for 2018, NAMA revised its projected surplus to be returned to the State upwards to €4 billion. This was reaffirmed in the Section 53 Annual Statement 2020 which was recently laid before the Houses of the Oireachtas. The realisation of this surplus depends on the success of NAMA’s ongoing deleveraging and completion of its Dublin Docklands SDZ and residential funding programmes.

Surplus funds may only be returned to the Central Fund once NAMA's subordinated debt and equity obligations have been repaid in full, which is expected to be by summer of 2020. It is estimated that €2 billion will be transferred in H2 2020 with a further €2 billion being transferred during 2021. This timeline is contingent on NAMA’s projected surplus of €4 billion remaining unchanged and is subject to prevailing market conditions in realising the remaining assets.

Any NAMA surplus paid, while Exchequer positive, will not impact the general government balance, in line with Eurostat rules. It will be a decision for the Government as to how any surplus returned by NAMA will be utilised within the framework of the fiscal rules at that time. The intention has always been to use such receipts from the resolution of the financial sector crisis to pay down our national debt and reduce our debt servicing costs.

Tax Reliefs Availability

Questions (68, 70)

Richard Boyd Barrett


68. Deputy Richard Boyd Barrett asked the Minister for Finance if, in view of the ongoing controversy in the film industry regarding the requirement to provide quality employment and training as a condition for receiving section 481 film tax relief, her views on whether the employer must be clearly identified as the Irish producer company that applies for the relief rather than a short lived designated activity company which only exists for the duration of the film; and if he will make a statement on the matter. [45503/19]

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Richard Boyd Barrett


70. Deputy Richard Boyd Barrett asked the Minister for Finance if will he consider further changes to section 481 film tax relief in order to ensure that receiving that relief is strictly conditional on the clear identification of the employer responsible for creating quality employment and training and that the said employer cannot be a short-lived DAC company but rather must be the Irish producer company standing behind the DAC; and if he will make a statement on the matter. [46679/19]

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Written answers (Question to Finance)

I propose to take Questions Nos. 68 and 70 together.

The Deputy will be aware that a number of amendments were made to the Film tax credit in Section 481 of the Taxes Consolidation Act 1997 as part of Finance Act 2018.

I legislated to split the certification process between Revenue and the Department of Culture, Heritage and the Gaeltacht (DCHG). Production companies are now required to apply to the DCHG before commencement of Irish production to have the film certified as a qualifying film.

As part of the application process, applicants must provide a skills development plan and, if the amount of eligible expenditure is over €2m, that plan must be agreed with Screen Ireland. Additionally, a post project skills development report is required for each project.

In terms of quality employment, the monitoring of compliance with employment rights legislation is primarily a matter for the Department of Business, Enterprise and Innovation, through the Workplace Relations Commission. However, as part of the new certification process to be undertaken by DCHG, an applicant company is required to sign an undertaking of compliance with all relevant employment legislation. This undertaking is required to be signed and furnished with every section 481 application.

These conditions shall be met not just by a producer company but also by the qualifying company or, as the Deputy has phrased it, the Designated Activity Company. If a producer does not comply with the employment and skills development requirements set out by the Minister for Culture, Heritage and the Gaeltacht, any amount already claimed may be recoverable, with interest.

I have further been advised by my officials that, following a joint request by the Irish Congress of Trade Unions (ICTU), the Services, Industry, Professional and Technical Union (SIPTU), and Screen Producers Ireland, the WRC has agreed to undertake an audit of the Republic of Ireland Independent Film and Television Drama Production Sector with a view to examining industrial relations generally, employment practices and procedure, assessing issues arising (if any), and making recommendations for their improvement where appropriate.

The timeframe for receiving submissions on this matter has now closed. My officials will be analysing the results of this process once a report is published.

Tax Credits

Question No. 70 answered with Question No. 68.

Questions (69)

Éamon Ó Cuív


69. Deputy Éamon Ó Cuív asked the Minister for Finance when the personal income tax credit was initially raised to €1,650; when the employee tax credit was raised to €1,650; the cumulative inflation since; and if he will make a statement on the matter. [46025/19]

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Written answers (Question to Finance)

The Personal Tax Credit and the Employee (or PAYE) Tax Credit were both reduced from €1,830 to €1,650 in Budget 2011 in the context of the financial crisis. This took effect from 1 January 2011. Cumulative inflation in the period from 2011 to 2018 has been of the order of 3.5 per cent.

General increases to tax credits result in an increase in a level of income that is effectively exempt from income tax. It is estimated that in 2020, some 28 per cent of taxpayer units will be exempt from income tax and USC. An increase in the Personal and Employee Tax Credits would be likely to increase the proportion of earners who are exempt from income tax and would also narrow the income tax base. In addition, it would give rise to calls to increase the value of the Earned Income Tax Credit which applies to self-employed persons.

During the financial crisis our income tax base narrowed to the point where 45 per cent of taxpayers were exempt from income tax. This was unsustainable and placed a disproportionate burden on those who were within the tax net to provide the tax revenues needed for public services and social supports.

It is the Government’s position that earners start to pay the marginal rate of tax at too low an income level and it is committed to reducing excessive tax rates for low and middle income earners while also keeping the tax base broad.

As a result of changes in recent Budgets, USC rates have been reduced to 0.5%, 2% and 4.5%. The income level at which taxpayers begin to pay the higher rate of tax has also been increased by €2,500 and there have been increases in both the Home Carer Tax Credit and the Earned Income Credit. The impact of these changes is that the top marginal rate on incomes up to €70,000 has been reduced from 52% to 48.5%.

Question No. 70 answered with Question No. 68.

Economic Growth

Questions (71)

Bernard Durkan


71. Deputy Bernard J. Durkan asked the Minister for Finance the degree to which the economic fundamentals continue to remain stable, notwithstanding international pressures; and if he will make a statement on the matter. [46603/19]

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Written answers (Question to Finance)

On the back of another strong year for the economy in 2018, momentum continued in the first half of this year with GDP up 6 ½ percent in year-on-year terms. Modified domestic demand, which adjusts for distortions in the Irish economy, was up 2.3 per cent over the first half of the year, a solid performance, though a moderation on 2018. The best barometer of our current economic performance is the labour market, where strong growth in employment over the last number of years has continued into this year. Total employment increased by 63,100 (+2.8 per cent) in the first half of 2019, while the unemployment rate for October, fell below 5 per cent for the first time since 2007.

As a small open economy Ireland is particularly exposed to external risks which are firmly tilted to the downside at present. First and foremost is the ongoing uncertainty surrounding the UK’s decision to exit the EU. Secondly, any further disruption to trade or a more pronounced slowdown in global growth would have a disproportionate impact on the Irish economy.

Regarding Brexit, the Budget 2020 central scenario projections assumed that the UK would leave the EU without ratification of the Withdrawal Agreement, i.e. a disorderly exit. Under this scenario, GDP growth of just 0.7 per cent would be in prospect next year, reflecting both the impact of Brexit and the continued weakness in the global outlook. However, given recent events in the UK and the ‘flextension’ granted by the EU, a disorderly Brexit in 2020 is less likely - although still possible — than it was only a few weeks ago. Nevertheless, any form of Brexit will have a negative impact on the Irish economy.

The best way we can mitigate against these risks is through prudent budgetary policy, careful management of the public finances and by focusing on competitiveness-oriented policies.

VAT Rate Application

Questions (72)

Denis Naughten


72. Deputy Denis Naughten asked the Minister for Finance the reason for the difference in the VAT registration threshold for the sale of services versus the sale of goods; if he will review the anomaly; and if he will make a statement on the matter. [46497/19]

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Written answers (Question to Finance)

I am advised by Revenue that VAT is governed by the EU VAT Directive (Council Directive 2006/112/EC), with which Irish VAT law must comply.

There is no anomaly to be reviewed. Article 284 of the Directive permits Ireland to maintain two thresholds - €75,000 for goods and €37,500 for services - and only permits an increase in these thresholds to maintain their value in real terms, that is they may only be increased in line with inflation and for no other reason. Ireland could have one threshold, but that threshold would have to be the lower one of €37,500.

The distinction between the supply of goods and the supply of services is a feature of the EU VAT Directive and Irish VAT legislation. The value added in relation to a supply of a good is the difference between the purchase price and the sale price, while the value added in the supply of a service will generally be a much higher percentage of the price charged and involve a significant direct input by the business proprietor or his or her employees.

Tax Code

Questions (73)

Thomas P. Broughan


73. Deputy Thomas P. Broughan asked the Minister for Finance his views on the Franco-German proposal for a minimum price for carbon taxation in the EU; and if he will make a statement on the matter. [46130/19]

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Written answers (Question to Finance)

In a Multi Financial Framework (MFF) context, while the idea of a Carbon Border Adjustment has been raised informally, my Department has not seen any formal proposal from the European Commission or from France and I cannot provide views on a proposal which I have not seen.

Although Ireland is open to considering any new proposal on a possible new Own Resource for the EU Budget, from a practical perspective we believe this may slow down negotiations at this stage of the process and delay any final agreement.

Mortgage Arrears Rate

Question No. 75 answered with Question No. 40.

Questions (74)

Alan Kelly


74. Deputy Alan Kelly asked the Minister for Finance his views on mortgage lenders imposing legal fees and other charges on borrowers in arrears who are co-operating with their bank to resolve the issue; and if he will make a statement on the matter. [46554/19]

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Written answers (Question to Finance)

I have been advised by the Central Bank of Ireland (the Central Bank) that they have recently concluded an investigation into the practice of charging costs associated with the legal process, including third party costs (the costs) to borrowers in mortgage arrears and charging of interest on those costs.

In summary, their investigation concluded that:

1. Applying the costs prior to the conclusion of repossession proceedings and prior to the decision by a Court to award the costs to the regulated entity is not in borrowers’ best interests. Additionally, it is not in the borrower’s best interests to apply the costs prior to settlement between the parties concerned or prior to the borrower being in a position to redeem the mortgage and requesting to do so;

2. Pursuant to the terms of the European Union (Consumer Mortgage Credit Agreements) Regulations 2016 (the ‘CMCAR’), charging interest on the costs at any point is contrary to Regulation 29 (2) of the CMCAR.

On 23 October 2019, the Central Bank issued an industry letter to Credit Institutions, Credit Servicing Firms and Retail Credit Firms setting out its expectations in relation to applying the costs and charging interest on the costs. Additionally, the Central Bank reminded all regulated entities of existing obligations under the Code of Conduct on Mortgage Arrears 2013 (the CCMA), including the restriction on imposing charges and/or surcharge interest on arrears, unless the borrower has been classed as not co-operating. A copy of the letters issued can be found on their website:

As the Deputy will appreciate, as in any Central Bank investigation, no details of investigations can be shared until the investigation is complete and so I am unable to comment further.

Question No. 75 answered with Question No. 40.

Insurance Costs

Questions (76)

Jan O'Sullivan


76. Deputy Jan O'Sullivan asked the Minister for Finance the steps he is taking to ensure more transparency on the part of insurance companies on premiums charged, cases contested or uncontested and so on; and if he will make a statement on the matter. [40870/19]

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Written answers (Question to Finance)

Introducing greater transparency into the insurance sector is a priority of the Cost of Insurance Working Group (CIWG) and much work has been done on this front to date.

For example, on 1st November the Central Bank introduced new rules in relation to transparency in motor insurance costs. The new rules require insurers to provide policyholders with details of the prior year’s premium paid, as well as quotations for each policy option available to them (such as comprehensive, third party fire and theft and third party only). In addition, the renewal notification period has been extended from 15 to 20 working days for motor, health, property and general liability insurance to allow policyholders more time to seek comparison quotes The background to these new rules is a recommendation from the Cost of Insurance Working Group Report on the Cost of Motor Insurance and the changes have been made through amendments to the Non-Life Insurance (Provision of Information) (Renewal of Policy of Insurance) Regulations 2007 (S.I. No.74). I believe that each of these measures should assist consumers in making decisions at renewal time, including encouraging them to shop around and, if favourable to them, switch insurance provider.

In addition, the Government is actively supporting a Private Members Bill - Consumer Insurance Contracts Bill, which is scheduled at Report Stage in the Dail this week and should progress through the Oireachtas by the end of the year. The purpose of the Bill is to reform and modernise the law of consumer insurance contracts and to level the playing field between consumers and insurers. This Bill has various provisions aimed at increasing transparency in premiums charged and the management of claims. A notable change, which is based on a recommendation of the Cost of Insurance Working Group, will be the requirements for insurers to inform policy holders, including small businesses, in circumstances where a claim has been made against them by a third party. Such communications have not always occurred and the implementation of this provision will therefore be a significant step forward in improving transparency around the claims process.

Furthermore, with the publication shortly of the first report of the National Claims Information Database on private motor insurance, there should be much greater transparency around the settlement of claims process and how this occurs. It is hoped that this information together with a recalibrated level of awards to be developed by the Judiciary as a result of the enactment of the Judicial Council Act 2019 should lead to a greater consistency of award levels, thus enhancing the role of Personal Injuries Assessment Board (PIAB) and reducing litigation levels.

Mortgage Lending

Questions (77)

Martin Heydon


77. Deputy Martin Heydon asked the Minister for Finance if exceptions open to banks in applying the mortgage lending rules of the Central Bank can be targeted at first-time buyers and those who fall just above the income limits for the Rebuilding Ireland home loan; and if he will make a statement on the matter. [46641/19]

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Written answers (Question to Finance)

The Central Bank carries out an annual review of the mortgage measures, including the key parameters of the LTV and LTI limits and the allowances allowed above these limits. The 2019 review is currently underway and the results will be announced in early December. The annual review considers whether the measures continue to meet the objectives of strengthening bank and borrower resilience and reducing the likelihood and impact of a credit-house price spiral emerging.

The system of allowances give the banks discretion to lend above the LTV and LTI limits. These are separated based on whether a borrower is a first-time buyer (FTB) or not. For FTBs, 20% of new lending to FTBs can take place above the 3.5 times LTI limit. As the 90% LTV limit is already set higher for FTBs, only 5% of new lending to FTBs can exceed this limit. These allowances are targeted to FTBs in that they can only be used for FTB lending. Separate allowances exist for second-time buyer (SSB) new lending.

Within the FTB allowances, there are no rules in place around which types of FTB borrowers would receive the allowances. This is a matter for individual lenders, based on an evaluation of each specific borrower and the lender’s own credit policies. An important feature of the measures is that the limits are in addition to individual banks' credit policies and are not a substitute for lenders’ responsibilities to assess affordability and lend prudently.

Therefore, subject to the requirement to comply with the provisions of the macro-prudential mortgage lending rules, the Central Bank Consumer Protection Code and other regulatory requirements, it remains the responsibility of an individual lender to assess the credit worthiness of an individual and to decide whether or not to provide a loan in any particular case, or how much credit to provide in any particular case.

The data on new lending under the mortgage measures and the usage of the allowances is published on the Central Bank’s website every six months. This shows that for the first six months of 2019, 16% of new lending to FTBs was at an LTI above 3.5 times.

Financial Services and Pensions Ombudsman

Questions (78)

Maureen O'Sullivan


78. Deputy Maureen O'Sullivan asked the Minister for Finance if he is satisfied with the ability of the Financial Services and Pensions Ombudsman to act in the interest of aggrieved parties that are facing issues with their financial service provider; his views on whether the service offered to consumers could be improved; and if he will make a statement on the matter. [46528/19]

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Written answers (Question to Finance)

Firstly, I must point out that the Financial Services and Pensions Ombudsman (FSPO) is independent in the performance of his statutory functions. I have no role in the day to day workings of the office or in the decisions which he takes.

As the Deputy will be aware the Financial Services and Pensions Ombudsman Act 2017 which commenced on 1 January 2018 established the Office of the Financial Services and Pensions Ombudsman.

One of the main roles of the Ombudsman is to investigate, mediate and adjudicate complaints about the conduct of financial or pension service providers. The FSPO was established to provide an alternative to the Courts for consumers who have unresolved disputes with a financial or pension service provider and all investigations by the Ombudsman are free of charge to the consumer. Subject only to an appeal to the High Court, a finding of the Ombudsman in respect of a complaint is legally binding on all parties

The FSPO has advised me that the office has an important role in redressing the balance of power between the individual consumer and provider. The FSPO does this by making its service as informal and accessible as possible. It mediates between the parties and where necessary it investigates and issues legally binding decisions. The Ombudsman has the power to direct a financial service provider to pay compensation of up to €500,000 to a complainant. He can also direct that a financial service provider rectify the conduct that is the subject of the complaint. There is no limit to the value of rectification he can direct.

The FSPO’s Strategic Plan 2018-2021 aims to ensure it operates in a way that contributes to promoting the best interests of consumers and actual or potential beneficiaries of financial or pension services in the efficient and effective handling of complaints. The FSPO inherited 3,178 complaints from its predecessor bodies and received 5,692 complaints in 2018. It closed 4,443 complaints in 2018 leaving a balance of 4,427 complaints on hand at the end of 2018. Such high volumes of complaints cause the FSPO to be unable to process complaints as quickly as it would wish to.

The FSPO’s Strategic Plan recognised the increasing number of complaints and anticipates a further increase in the coming years. The overall objective of this Plan is to ensure that the organisation can deal efficiently with this increase and to enhance the experience of its customers by delivering its services faster and better. In order to deliver the objectives in its Strategic Plan the FSPO submitted a Workforce Plan to my Department and I approved the recruitment of an additional 35 staff earlier this year.

The FSPO has been proactively recruiting to fill these posts. However, similar to many public sector bodies, the current buoyant job market is making it difficult for the office to retain staff. This is mainly because the FSPO’s highly trained staff are much sought after in both the public and private sector. The FSPO inherited 53 staff from its predecessor bodies in January 2018. However, despite recruiting and appointing additional 42 staff since then, it currently has 59 staff.

The Ombudsman has further informed me that additional staff will be joining it before the end of the year and that he will continue to recruit and train quality people to assist it to deliver on its mandate. The FSPO will continue to provide the most effective and efficient service possible in spite of the staff losses within the office.

Tax Code

Questions (79)

Maureen O'Sullivan


79. Deputy Maureen O'Sullivan asked the Minister for Finance further to Parliamentary Question No. 50 of 26 September 2019, the way in which he can address the unfairness for persons cohabiting, in many cases in long-term relationships, and those without children through other possible measures; and if he will make a statement on the matter. [46527/19]

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Written answers (Question to Finance)

I am aware of the points raised by the Deputy in her Parliamentary Question of 26 September, 2019 and in her correspondence which has been received in my Department with regard to the operation of Capital Acquisitions Tax.

For the purposes of Capital Acquisitions Tax, the relationship between the person who provides the gift or inheritance and the person who receives the gift or inheritance determines the lifetime tax-free threshold (the Group Threshold) below which gift or inheritance tax does not arise. As Capital Acquisitions Tax is generally payable by the beneficiary, rather than the disponer, the system promotes horizontal equity in that all individuals with similar circumstances are treated in a similar manner.

It is a long-held principle of inheritance tax that transfers of assets between spouses are exempt. The spousal exemption from inheritance tax was extended to civil partners from 1 January 2011.

As regards the gifting of a shared home, the treatment of gifting was amended substantially in the 2016 Finance Act. In general, it is now only possible to receive a tax-free gift of a dwelling house where it is gifted to a dependent relative. A dependent relative is a direct relative of the donor, or of the donor’s spouse or civil partner, who is permanently and totally incapacitated because of physical or mental infirmity from maintaining himself or herself or who is over the age of 65. This change was made to restore the original policy aim of the relief.

Gifts are generally taxable in the same way as inheritances. There is an annual €3,000 CAT relief available to all recipients of gifts.

As regards the treatment of individuals with no children, gifts or inheritances from them are subject to either category B or C thresholds irrespective of their individual status. There would be a significant potential Exchequer cost with any extension of the Category A threshold to allow individuals with no children to nominate a potential beneficiary of their estate.

There are some CAT reliefs which are available for co-habiting couples. Cohabiting individuals can avail of the ‘dwelling house exemption’ to bequeath their principal private residence, generally the most substantial asset owned by an individual, free from inheritance tax which allows for property to be inherited tax-free irrespective of its value where the beneficiary is already living in the house subject to certain conditions.

Section 88A of the Capital Acquisitions Tax Consolidation Act 2003 exempts transfers of property made between qualified cohabitants within the meaning of Part 15 of the Civil Partnership and Certain Rights and Obligations of Cohabitants (CPCROC) Act 2010. This is a redress scheme which provides protection in law for long-term cohabiting couples and provides safeguards for an economically dependent cohabitant where a relationship has ended, or on death.

The introduction of the exemption from gift tax and inheritance tax in these cases did not give cohabiting couples the same tax treatment as married couples or civil partners but simply legislated for the tax consequences of the redress arrangements for cohabitants under the CPCROC Act 2010.

I would say that any change in the tax treatment of cohabiting couples, including with respect to CAT, can only be addressed in the broader context of future social and legal policy development in relation to such couples. There would also be potentially significant Exchequer costs in changing the current CAT rules to accommodate the changes sought by the Deputy.

Tax Reliefs Availability

Questions (80)

Denis Naughten


80. Deputy Denis Naughten asked the Minister for Finance if he will consider providing income tax relief for the long-term lease of residential homes to address security of tenure in view of the success of a similar measure in the agricultural sector under section 664 of the Taxes Consolidation Act 1997 as amended by the Finance Act 2014; and if he will make a statement on the matter. [46496/19]

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Written answers (Question to Finance)

I understand that the Deputy is proposing that income tax relief, similar to that which is provided for under Section 644 TCA 1997, would apply where landlords provide long-term leases of residential properties. As the Deputy will be aware, decisions by me in relation to the Tax Acts are made in the context of the annual Budget and Finance Bill process. However, bearing in mind the issues outlined below, I am not minded, at this time, to support a proposal along the lines of that put forward in the Deputy's question.

Generally, rental income, after deduction of allowable letting expenses, is subject to tax as part of the total taxable income of a landlord. Individual landlords are subject to income tax on all their income combined, at the applicable rates, including USC and PRSI where appropriate.

Section 664 of the Taxes Consolidation Act 1997 (‘relief for certain income from leasing of farm land ’) provides for the exemption of certain income from the leasing of farm land, where the land is let under a qualifying lease. This particular relief was designed to encourage longer term leases of farm land, with the targeted policy objective of assisting with the mobility and productive use of agricultural land.

When considering the introduction of any tax expenditure measure, my officials undertake an evaluation of the proposal in accordance with the Department of Finance Tax Expenditure Guidelines. An evaluation will seek to address issues such as identification of the market failure, the policy rationale for intervention, cost, and whether a tax based measure is the most efficient form of intervention. With regard to the latter point, in many cases a market failure may be more appropriately remedied by a direct expenditure measure or through regulation. Other considerations include the potential for deadweight costs, the potential cost of the tax revenue foregone to the Exchequer and the scope for abuse.

Furthermore, Ireland’s past experience with tax incentives in the housing sector strongly suggests the need for a cautionary stance when considering intervention in the rental sector. There are many competing priorities which must be considered when deciding which policy measures to introduce and the rental sector is just one of many other sectors that may require assistance and intervention. I must be mindful of the many demands on the Exchequer and the need to maintain a broad base of taxation.

Finally, as the Deputy may be aware, in Finance Act 2018, and with effect from 1 January 2019, I provided for the full restoration of the amount of interest that may be deducted by landlords in respect of loans used to purchase, improve or repair their residential property, as a means to support the rental sector.

Tax Collection Forecasts

Questions (81)

Thomas P. Broughan


81. Deputy Thomas P. Broughan asked the Minister for Finance his plans to propose an annual review of performance of his Department in tax forecasting. [45802/19]

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Written answers (Question to Finance)

My Department periodically reviews its approach to tax forecasting, with the most recent full review published in 2008.

A new review group has been established with a mandate to review and assess tax forecasting methodology over the past decade. The Tax Forecasting Methodology Review Group is composed of members of various institutions, both domestic and international, engaged in tax forecasting so that relevant experience can be shared. The group’s analysis has focused on the composition of the Irish tax take and the accuracy of forecasts and involves examining the information bases upon which forecasts are made.

The group has to date met on six occasions, with one further meeting planned before its Report is finalised. The group aims to issue the Report before year-end with recommendations, where appropriate, for changes to the current tax forecasting methodology.

Finally, I would point out that my Department has, since 2018, published an Annual Report on Taxation, outlining the main trends in the key tax heads over a longer time horizon.

EU Budget Contribution

Questions (82)

Joan Burton


82. Deputy Joan Burton asked the Minister for Finance the contributions of Ireland to the EU in each of the years 2015 to 2018 and to date in 2019; the estimated future contributions in each of the next three years from 2020 onwards; the principal reasons for the increase in contributions by Ireland; the basis of the calculation of the contribution; and if he will make a statement on the matter. [46552/19]

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Written answers (Question to Finance)

The contributions of each Member State to the EU Budget include Traditional Own Resources (Customs Duties) and a portion of VAT, with the remainder coming from Gross National Income (GNI).

The following table outlines the Irish contribution to the EU Budget for each of the 2015 to 2018 and to date in 2019. These figures include Traditional Own Resources.


Payments to the EU Budget €m









2019 (up to 1 November 2019)


Contributions to the EU Budget are contingent on a number of variables, including updated GNI growth, the size of the overall EU Budget expenditure for any individual year and other EU Budget operational developments.

The current estimated contribution for the coming years is presented in the following table.


Estimated Payments to the EU Budget €m

1% Ceiling

Estimated Payments to the EU Budget €m 1.11% Ceiling













* Note: contributions in 2021 under a 1% ceiling are lower than contributions in 2020 due to a number of factors: differing expenditure profiles, differing economic baselines (EU27 vs. EU28) and the inclusion of adjustments (balancing payments) in 2020 which are not part of the 2021 calculations yet.

As the Deputy will be aware, the annual EU Budget is agreed within the ceilings of Multiannual Financial Framework (MFF). The European Commission’s proposal for the 2021-2027 MFF was published on 2nd May 2018. This is the starting point of an important ongoing debate on the future of the EU Budget.

Ireland is forecast to see significant growth in our contributions as part of the next MFF as a result of continued economic growth, increased expenditure and the departure of the UK.

Banking Sector

Questions (83)

Martin Heydon


83. Deputy Martin Heydon asked the Minister for Finance if he has reviewed or plans to review the use by banks of exceptions that are possible within the lending criteria set by the Central Bank; and if he will make a statement on the matter. [46640/19]

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Written answers (Question to Finance)

The Central Bank of Ireland has an overall and independent responsibility to promote and protect financial stability and the mortgage lending measures introduced in 2015 are an important tool available to the Bank for that purpose.

In that context, the Central Bank carries out an annual review of the mortgage measures, including the key parameters of the LTV and LTI limits and the allowances allowed above these limits. The 2019 review is currently underway and the Central Bank has informed me that the results will be announced in early December. The annual review considers whether the measures continue to meet the objectives of strengthening bank and borrower resilience and reducing the likelihood and impact of a credit-house price spiral emerging.

The system of allowances give the banks discretion to lend above the LTV and LTI limits. The allowances vary by limit and by borrower type. For the LTV limit for second-time buyers (SSBs) and for the LTI limit for first-time buyers (FTBs), banks can lend up to 20% of the value of new lending in any given year above those limits. For the LTI limit for second-time buyers, up to 10% of new lending can take place above the limit. For the higher LTV limit for first-time buyers of 90%, only 5% of new lending is allowed above this level.

The data on new lending under the mortgage measures and the usage of the allowances is published on the Central Bank’s website every six months. This shows that for the first six months of 2019, 16% of new lending to FTBs was at an LTI above 3.5 times and 16% of new lending to SSBs took place above the 80% LTV limit.