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Wednesday, 13 May 2020

Written Answers Nos. 101-109

Banking Sector

Questions (101)

Pearse Doherty

Question:

101. Deputy Pearse Doherty asked the Minister for Finance the correspondence he has had with a bank (details supplied) regarding its refusal to offer full three month mortgage breaks for mortgage holders who are in mortgage arrears but have lost income as a result of Covid-19; and if he will make a statement on the matter. [5290/20]

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Written answers

As the Deputy will be aware, the BPFI announced late last month over 65,000 mortgage payment breaks had been granted since the cross-bank initiative was introduced. The members of the BPFI announced on 30 April, that a further three-month extension to the current payment break will be made available to customers that continue to be directly impacted by the fallout from the Covid-19 pandemic.

However, it is for each financial institution to examine a customer’s individual circumstances to make sure the appropriate solution is put in place. In some cases this will be a mortgage payment break but perhaps if the account is already in arrears, the Central Bank’s statutory Code of Conduct on Mortgage Arrears (CCMA) and its Mortgage Arrears Resolution Process, more commonly known as the MARP, may be more appropriate.

If the financial institution has deemed that a payment break is not appropriate and that the MARP is more appropriate, the CCMA outlines very clear steps that have to be taken. The overriding objective of the CCMA is to ensure the fair and transparent treatment of consumers in mortgage arrears or pre-arrears, and that due regard is had to the fact that each case of mortgage arrears is unique and needs to be considered on its own merits.

The CCMA recognises that it is in the interests of borrowers and regulated firms to address financial difficulties as speedily, effectively and sympathetically as circumstances allow. It sets out a four-step process that regulated entities must follow.

The Central Bank has emphasised that the provisions of the existing consumer protection framework, which is designed to ensure that consumers’ best interests are protected, particularly in times of financial difficulties, are in place. People who may be experiencing particular vulnerabilities, as a result of the impact of COVID-19, for example, illness or loss of income, must be provided with whatever reasonable arrangements and/or assistance may be necessary in dealings with regulated entities.

If the customer is not happy with the way their financial institution is dealing with them, they can make a complaint to them and if they are not satisfied with the response received from them, the customer has the option to bring a complaint to the independent Financial Services and Pensions Ombudsman.

Covid-19 Pandemic Unemployment Payment

Questions (102)

Pearse Doherty

Question:

102. Deputy Pearse Doherty asked the Minister for Finance the measures he has or will take to ensure that those who had net weekly pay of less than €500 before the introduction of the temporary wage subsidy scheme do not receive less than €350 per week if their employer has applied for the temporary wage subsidy scheme; if a minimum weekly payment of €350 per week to the scheme will be introduced; and if he will make a statement on the matter. [5291/20]

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Written answers

The legislation underpinning the Temporary Wage Subsidy Scheme (TWSS) is contained in Section 28 of the Emergency Measures in the Public Interest (Covid-19) Act 2020.

This makes provision for the Minister for Finance to determine the amount of the temporary wage subsidy, with the consent of the Minister for Employment Affairs and Social Protection, given with the concurrence of the Minister for Public Expenditure and Reform, and different amounts of temporary wage subsidies may be so determined in relation to different classes of employee. As the Deputy will be aware, on 15 April 2020, I, as Minister for Finance, announced further updates to the TWSS.

Included in the updates were measures to increase the wage subsidy for certain lower paid employees. In effect, for those employees with previous net pay of less than €586 per week, the amount of the temporary wage subsidy shall not exceed €410 per week in accordance with the following principles:

- an 85% subsidy shall be payable in the case of employees whose average net weekly pay does not exceed €412; and

- a flat rate subsidy of up to €350 shall be payable in the case of employees whose average net weekly pay is more than €412 but not more than €500.

In addition, where an employer wishes to pay a greater level of top-up, in respect of employees with net pay of less than €412 per week, in order to bring the employee’s pay to €350 per week, then tapering would not be applied to the subsidy.

These changes to the TWSS mean that more employees will now receive a subsidy of €350 per week, and those with previous net pay below €412 per week will now receive a greater level of subsidy.

These new rates have been fully operational for payroll submissions made on or after 4 May 2020, with a pay date on or after that same date.

The changes announced allow the concentration of resources to protect incomes, in a proportionate way having regard to available resources, employer contribution and the broader suite of COVID-19 related supports put in place by the Government.

Covid-19 Pandemic Unemployment Payment

Questions (103)

Pearse Doherty

Question:

103. Deputy Pearse Doherty asked the Minister for Finance the number of employers who have applied to the temporary wage subsidy scheme; and the number of employees who applied in this regard. [5292/20]

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Written answers

On 9 April 2020, Revenue published an initial set of statistics on the operation of the TWSS. These statistics are available at:

https://www.revenue.ie/en/corporate/information-about-revenue/statistics/number-of-taxpayers-and-returns/covid-19-wage-subsidy-scheme-statistics.aspx .

The statistics cover the operation of the TWSS to 7 May. The data published include the cost of the scheme to date, numbers of employers and employees in receipt of payments under the scheme and breakdowns of the employee and employer numbers by size of business, sector of activity, location and number of employees. I am advised that Revenue is continuing to undertake further analysis of TWSS and will publish updated and expanded statistics on a regular basis. These updates will be published at the link noted above.

As of 12 May 2020, over 53,400 employers had registered for the TWSS, representing over 470,500 employees, while Revenue has paid out some € 890 million in wage subsidy payments under the scheme.

Protected Disclosures

Questions (104)

Catherine Murphy

Question:

104. Deputy Catherine Murphy asked the Minister for Finance the number of protected disclosures his Department has received since the legislation was introduced; the number of protected disclosures examined to conclusion by year in tabular form; and if he will make a statement on the matter. [5305/20]

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Written answers

A comprehensive and exhaustive response to the Deputy's question is not possible and the reasons for this are set out below, along with data for published numbers of protected disclosures as required under Section 22 of the Protected Disclosures Act 2014.

In broad terms a protected disclosure is a disclosure of information which the discloser believes may reveal wrongdoing and which came to the attention of the discloser through their employment. This is a very broad category of information and I expect that in many cases disclosures falling into this category are received and dealt with properly without the person making the disclosure or those receiving it ever adverting to the fact that the information constitutes a protected disclosure.

It is also generally irrelevant to the manner in which such information is dealt with whether the disclosure concerned falls within the legal definition of a protected disclosure, since the obligations which arise in respect of protected disclosures consist principally of not penalising the discloser for making the disclosure and protecting the identity of the person making the disclosure in some circumstances. These obligations would be routinely met without the need for any legal obligation to compel this to occur, so that it is generally not relevant whether the information constitutes a protected disclosure within the meaning of the legislation or not. It is therefore impossible to be certain that no disclosures which fall within the definition of protected disclosures but which have not been formally identified as such have been received and in fact it is very likely that this has occurred.

It is for these reasons that it is not possible to provide a comprehensive and exhaustive response to the Deputy's question. Having said that, it is important to state that the Department of Finance has put in place policy and procedures for the making of Protected Disclosures in the Department, which have been developed in line with the Protected Disclosures Act, 2014 and agreed by the Department’s Executive Board. This sets out the process by which a ‘worker’ of the Department can make a protected disclosure, what will happen when a disclosure is made and what the Department will do to protect the discloser.

The process supports the Department’s strong commitment to ensuring that the culture and working environment of the Department encourage, facilitate and support any member of staff of the Department in ‘speaking up’ on any issue that may impact adversely on the Department’s ability to properly and fully carry out all its roles and responsibilities to the high performance standard required. Two alternative confidential recipients have been nominated to receive protected disclosures from internal staff, in the event that a staff member does not wish to make the disclosure to their line manager or the normal senior management team. These nominees are the Head of Legal and the Head of Compliance. To date, neither of these officers have received such an internal protected disclosure.

Section 22 of the Protected Disclosures Act requires the publication of a report in respect of protected disclosures received in the preceding year setting out certain information in respect of protected disclosures received. For the purposes of complying with Section 22, the Department publishes informatoin regarding Protected Disclosures formally identified as such, without identifying the person making the disclosure. Previous reports indicate that one protected disclosure was received in 2017 and one in 2018. One protected disclosure received during 2019 will be included in the report to be published by June of this year. That disclosure remains under active investigation and correspondence with the discloser is ongoing.

Tax Code

Questions (105)

Marian Harkin

Question:

105. Deputy Marian Harkin asked the Minister for Finance the reason paramedics and EMTs are unable to claim flat rate expenses towards uniforms and other expenses incurred in carrying out their duties as is the case for a wide range of occupations, such as firefighters, doctors, nurses, healthcare assistants, physiotherapists and so on; if paramedics and EMTs will be included on the list for same; and if he will make a statement on the matter. [5425/20]

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Written answers

The flat rate expense (FRE) regime is operated by Revenue on an administrative basis where both a specific commonality of expenditure exists across an employment category and the statutory requirement for the tax deduction as set out in section 114 of the Taxes Consolidation Act (TCA) 1997 is satisfied, namely, that the expenses are wholly, exclusively and necessarily incurred in the performance of the duties of the office or employment by the employee concerned and that such expenses are not reimbursed by his or her employer.

The FRE regime was established to apply a uniformity of approach to tax deductibility for expenses of large groups of employees and to facilitate ease of administration for both Revenue and employees. The expense should apply to all employees in that category and not be discretionary. Revenue has advised me that it will consider FRE applications where a large number of employees incur broadly identical qualifying expenses which are not reimbursed by their employer. Applications are generally made by the representative bodies in the employment sectors concerned and are considered by Revenue based on the specific commonality of expenses within the employment category and compliance with the strictly applied statutory requirement for a tax deduction.

The Deputy will be aware that Revenue recently announced its decision to defer the implementation of any planned changes to the FRE regime until 1 January 2021, pending the outcome of a review relating to the tax deductibility of expenses in employment by the Tax Strategy Group (TSG). The TSG, which is overseen by my Department, will examine policy and legislative options relating to a number of aspects of the current eligibility requirements for entitlement to tax relief for expenses incurred in employment. Notwithstanding this review, I understand Revenue is willing to engage with representative bodies of any large groups of employees, including staff of the National Ambulance Service, to consider an application for flat rate employment expenses.

I am advised by Revenue that it remains committed to the FRE regime and encourages all taxpayers to avail of their full tax relief entitlements. The Deputy will be aware from previous replies to questions about the FRE regime that, outside of the regime, all employees retain their statutory right to claim a deduction under section 114 of the TCA 1997 in respect of an expense incurred wholly, exclusively and necessarily in the performance of the duties of their employment, to the extent which the expenses are not reimbursed by the employer.

Strategic Banking Corporation of Ireland

Questions (106)

Catherine Murphy

Question:

106. Deputy Catherine Murphy asked the Minister for Finance if the SBCI will be requested to publish a report by a company (details supplied) which it commissioned; and if he will make a statement on the matter. [5431/20]

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Written answers

The SBCI commissioned an external review of the organisation. EY were appointed to undertake this review following a procurement process. The EY report was due to be launched, alongside the 5 Year Strategic Plan of the SBCI, in late March. This event was postponed due to the Covid-19 crisis. The SBCI is working to reschedule this launch which is expected to occur this month.

Carbon Tax

Questions (107)

Mattie McGrath

Question:

107. Deputy Mattie McGrath asked the Minister for Finance if the carbon tax which was due to increase in May 2020 will be postponed in order to alleviate the financial burden on persons in view of current circumstances. [5443/20]

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Written answers

The Deputy will be aware that the increase in the carbon tax for non auto fuels took place on the 1st of May as was legislated for in the Finance Act 2019. Set out below is some relevant context to and rationale for this decision.

In my Budget 2020 financial statement I announced an increase to the rate of carbon tax from €20 to €26 per tonne of carbon dioxide emissions. This is the first increase to the carbon tax rate since 2012. My decision to increase the rate followed an examination of all relevant factors including the impact on households and is an important part of the Government’s commitment to tackling climate change.

The impact on the most commonly used household fuel bundles is set out in the following table:

Fuel Type

Typical Fuel Bundle

Carbon tax at €20 (incl VAT)

Carbon Tax at €26 (incl VAT)

Impact of Increase (incl VAT)

Petrol

60 litre fill

€3.39

€4.42

€1.03

Diesel

60 litre fill

€3.93

€5.11

€1.18

Kerosene

900 litre fill

€51.82

€67.15

€15.33

Peat

12.5kg bale

€0.52

€0.68

€0.16

Coal

40 kg bag

€2.39

€3.11

€0.72

Natural Gas*

11,000 kwh annual consumption

€46.19

€58.80

€12.61

*Data from the Commission for Regulation of Utilities, Water and Energy (“CRU”) shows that the average household consumption of natural gas per annum is 11,000 MWh.

The recommendations of the Joint Oireachtas Committee on Climate Action and the 2019 Climate Action Plan to increase the rate of carbon tax to €80 per tonne of emission by 2030 received cross-party support. Instead of a larger increase in any one year, the Government committed to a €6 increase as a first step towards the 2030 target. In order to ease in the increase I decided to delay the commencement of the increase for marked gas oil and home heating fuels until 1 May 2020, a time of the year when home heating requirements are low.

In Budget 2020, I also made provision for ringfencing all additional revenue arising from carbon tax increases. At this point it was estimated that the €6 increase would provide additional revenue of some €90 million in 2020 which has been allocated for expenditure on measures related to climate action, protecting the vulnerable and the Just Transition. Some €34 million was allocated to protecting those most vulnerable to fuel poverty by increasing the national fuel allowance payment and providing increased funding for energy efficiency upgrades.

Analysis conducted by the Department of Finance (A distributional analysis of Budget 2020 Tax and Welfare measures ) using the ESRI SWITCH microsimulation model, confirms that households in the bottom three income deciles will experience a net positive impact in their equivalised disposable income as a result of the changes introduced in Budget 2020 when account is taken of the increase in carbon tax, the increase in fuel allowance and the range of other welfare measures announced. In particular, the analysis finds that any regressive impact of the carbon tax is outweighed by the increase in social welfare transfers and direct tax measures, even before the fuller benefits of the announced carbon tax revenue recycling are accounted for.

Further, whereas the carbon tax increase for home heating fuels applies from 1 May 2020, the increase of €2 per week in the national fuel allowance applied from 6 January 2020. In order to ensure the most vulnerable groups are provided with additional targeted financial supports in a timely and efficient manner, Minister Doherty and I recently announced that the term of this scheme is to be extended by 4 weeks until 8 May (as a one-off measure). I am acutely aware of the financial uncertainty and strain that many households and businesses are facing as a result of the restrictions in place to limit the spread of Covid19. In order to alleviate this pressure the Government implemented a series of supports including emergency welfare payments, a wage subsidy scheme as well as a major expansion of supports in liquidity measures for businesses affected by Covid19.

As I have outlined, the impact of the carbon tax increase on a typical fuel bundle is moderate and financial supports are in place to protect those most exposed to fuel poverty as well as businesses who are impacted by Covid19.

Departmental Offices

Questions (108)

Peter Burke

Question:

108. Deputy Peter Burke asked the Minister for Finance if there are vacancies in the offices of his Department at a location (details supplied); and if he will make a statement on the matter. [5485/20]

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Written answers

I wish to advise the Deputy that the Department of Finance does not have any offices in Counties Longford or Westmeath. The Department's offices are in Dublin, with a small cohort of staff in Tullamore, Co. Offaly.

Tax Code

Questions (109)

Michael McGrath

Question:

109. Deputy Michael McGrath asked the Minister for Finance the tax heads which will apply in respect of the announcement regarding the possible warehousing of certain liabilities; when the measure will come into effect; and if he will make a statement on the matter. [5505/20]

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Written answers

I am advised by Revenue that the effective “warehousing” of VAT and PAYE (Employer) liabilities is currently operational. In March this year, Revenue announced that it was suspending debt collection and the charging of interest on late payment for the January/February and March/April 2020 VAT periods and the February, March and April 2020 PAYE (Employer) periods. On 7 May 2020, Revenue announced the extension of these arrangements to include the May/June 2020 VAT period and May and June 2020 PAYE (Employer) liabilities.

The warehousing scheme is available to businesses severely impacted by Covid-19 who have experienced a significant drop in turnover and been unable to pay their VAT and employer PAYE liabilities in part or in full.

These measures are being operated by Revenue on an administrative basis under the care and management provisions of the Taxes Consolidation Act 1997. However, primary legislation will be required to put the measures on a statutory footing and to provide for the appropriate rate of interest to be changed on the warehoused debts, namely:

- 0% for the “Covid-19 restricted trading phase”, the period when the business is unable to trade due to the Covid-19 related restrictions, and including the first two months after the business resumes “normal” trading;

- 0% for the “zero interest” phase, which last for 12 months after the end of the first phase;

- 3% per annum for the “reduced interest phase”, which begins after the end of the second phase.

The necessary legislative amendments to the PAYE provisions of the Taxes Consolidation Act and the Value Added Tax Consolidation Act 2010 will be brought forward in due course.

Further information is available on Revenue’s website at

https://www.revenue.ie/en/corporate/press-office/press-releases/2020/pr-020520-revenue-confirms-warehousing-of-covid-19-related-tax-debt-for-businesses.aspx

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