Written Answers Nos. 61-80
61. Deputy James Browne asked the Minister for Finance his views on ensuring that employers availing of the wage subsidy scheme raise their employees' wages up to 100% of their gross pay instead of their net pay; and if he will make a statement on the matter. [7383/20]
View answer65. Deputy James Browne asked the Minister for Finance his views on whether employers availing of the temporary wage subsidy scheme should match employees' gross pay instead of net pay rate; and if he will make a statement on the matter. [7583/20]
View answerI propose to take Questions Nos. 61 and 65 together.
The Temporary Wage Subsidy Scheme (TWSS) is provided for in section 28 of the recently enacted Emergency Measures in the Public Interest (Covid-19) Act 2020. In the context of the compelling need for immediate implementation of the TWSS, the scheme necessarily had to build on data returned to Revenue through its real-time PAYE system.
The key prescribed conditions of the scheme are that –
- the business is suffering significant negative economic impact due to the pandemic and is unable to pay normal wages to employees, but wishes to continue to employ the employees and is making best efforts to continue to pay some wages to the employees,
- the employees were on the payroll at 29 February 2020, and
- the employer had fulfilled its PAYE reporting obligations for February 2020 before, in general, 15 March 2020, but recently extended to before the 1 April 2020.
The latter two conditions were particularly designed with a view to preventing abuse of the scheme.
The amount of the temporary wage subsidy payable in relation to eligible employees is based on the average net weekly pay reported for January and February 2020 for each employee.
I clarified in my letter of 16 April 2020 to Revenue, which set out my determinations of the amounts of wage subsidy to be payable in relation to different classes of employees, that for the purposes of the operation of the TWSS, the Average Revenue Net Weekly Pay is the employee’s average net weekly pay for January and February 2020 based on the payroll submissions made by the employer concerned to Revenue. It is a matter for each employer concerned to decide what amount of normal wages should be paid to employees in addition to the wage subsidy amounts, and whether to try match the employees’ previous gross or net pay. Ultimately, what employees are most concerned about is how near the aggregate of the wage subsidy amount plus whatever amount of normal wages is being paid net to them by employers is to their normal take home pay.
Revenue has confirmed that it has now implemented the revised rates of wage subsidy as determined by me on 16 April 2020, with the remainder to be implemented shortly. The revised rates apply as respects payroll notifications received by Revenue on or after 4 May 2020 in respect of payroll runs to be made on or after that date. The revised rate now implemented include:
- the 85% subsidy rate for employees whose average net weekly pay does not exceed €412,
- non-tapering of the 85% subsidy where an employer contribution of more than 15% of the employees net weekly pay results in a salary payment of up to €350 per week,
- the flat rate subsidy of up to €350 for employees whose average net weekly pay is more than €412 but less than €500,
- the 70% subsidy rate for employees whose average net weekly pay is more than €500 but less than €586, with a maximum subsidy of €410 applying,
- a maximum payment of €350 per week for employees whose average net weekly pay is greater than €586 per week but not more than €960 per week, subject to specific tapering reductions based on the employer contribution to the net weekly earnings.
Finally, it is important to note that the TWSS is operated in real-time by employers through the normal payroll process. To ensure that subsidy amounts are paid to employees on a timely basis as part of the relevant payroll run, it is necessary to calculate the amount of the subsidy due to an employee based on the employee’s gross pay. This is necessary as an employee’s net pay cannot be fully determined before the actual payroll is run. Revenue is aware that, in effect, this means that for some employees where the employer pays between (net weekly) €586 and €960, the full amount of the subsidy due to an employee may not be paid through the payroll run concerned. However, Revenue has confirmed it will be implementing a system development to ensure that any subsidy amounts that remain due to such employees will be calculated, by Revenue, following the submission of the actual payroll or payrolls. Arrangements will then be made by Revenue to pay any outstanding subsidy amount directly to the employees concerned. The necessary system development to achieve this will be implemented shortly and will be applied retrospectively from 4 May 2020 to any impacted weekly, fortnightly or monthly paid employees.
62. Deputy Joe O'Brien asked the Minister for Finance if an impact assessment has been carried out on the status of credit unions here in view of the Covid-19 pandemic; the supports that can be offered to credit unions; his views on the future of credit unions here; and if he will make a statement on the matter. [7426/20]
View answerFirst of all, I wish to inform the Deputy that both I and my officials have engaged extensively with the credit union representative bodies since the beginning of the COVID-19 pandemic.
I spoke with the credit union representative bodies, by conference call on 23 March 2020 and again on 22 April 2020 to discuss the challenges and emerging issues facing the credit union sector as a result of the COVID-19 crisis. I welcomed the ongoing work of the credit union sector to support members in difficulties due to COVID-19 and acknowledged the health and safety risk front line staff are facing every day to ensure continuity of services to members. I noted the vital work the credit union sector is carrying out, which builds on the government’s call for solidarity and community spirit which is synonymous with credit unions.
In addition to the above, my officials have had weekly calls with the credit union representative bodies and weekly engagement sessions with the Registry of Credit Unions in the Central Bank to review any emerging issues in the sector resulting from the pandemic, and to ensure smooth information flow between the sector and Government. The Credit Union Advisory Committee (CUAC) is also meeting weekly.
I recognise the key role that credit unions play in the delivery of financial services in local communities across Ireland, the need for which is heightened at this time. Credit unions account for approximately one third of the consumer credit market and are well positioned to provide access to credit to support the recovery from the current crisis.
In terms of the overall financial position of the sector, credit unions have come into this crisis with a strong reserves position, with a sector average reserve ratio of 16% as at 31 December 2019. This highlights that many individual credit union boards have chosen to prudently maintain additional reserves over the 10% regulatory minimum requirement. Credit unions have also maintained high levels of liquidity, with a sector average liquidity ratio of 39% as at 31 December 2019. Notwithstanding the strong financial position of the sector at December 2019, sustainability is a challenge for many credit unions.
Generally speaking, the current business model of Irish credit unions is suffering from low growth rates in loan demand over recent years (outpaced by stronger savings growth). Surplus funds not lent out to members are appropriately not exposed to undue risk, and they yield limited investment returns reflective of the current low interest rate environment. The operational business model lacks scale efficiencies and suffers from high operating costs. This has translated into low loan to asset ratios (sector average 28%), low return on assets (sector average 0.6%) and high cost income ratios (sector average 82%).
The economic outlook arising by virtue of COVID-19, including reduced demand for new lending, has increased the challenges the sector is already facing. As a result it was agreed that the CUAC would report to me by 30 June on challenges and opportunities for the sector, incorporating implications of COVID-19, the role credit unions could play in the economic recovery and any relevant recommendations.
63. Deputy Eoin Ó Broin asked the Minister for Finance the number of applications for loans to Home Building Finance Ireland since its establishment; the number of loan approvals; the number of loan drawdowns; the cash value of the applications, approvals and drawdowns; and the number of units of accommodation involved in the applications, approvals and drawdowns to date. [7446/20]
View answerThe details sought by the Deputy are set out in the following table for the period 28 January 2019 to 19 May 2020.
In relation to the cash value and the number of units of accommodation identified at the applications stage, for a variety of reasons these numbers can vary significantly from the applications finally considered by HBFI and therefore I am advised by HBFI they are not in a position to provide these numbers as they could be considered as a comparator to the approved numbers when in many cases they will not accurately represent the final application considered.
|
- |
Data for the period 28/01/2019 to 19/05/2020 |
|
Number of Applications for loans |
70 |
|
Number of Loan Approvals |
23 |
|
Number of Loan Drawdowns |
7 drawn loans (36 individual drawdown requests within these 7 loans) |
|
Cash Value of Approvals |
€134m* |
|
Cash Value of Drawdowns |
€12m* |
|
Number of units involved in the Approvals |
743 |
|
Number of units involved in the Drawdowns |
247 units either under construction or already completed (based on the 7 drawn loans) |
* Rounded to the nearest million
64. Deputy Eoin Ó Broin asked the Minister for Finance when VRT applications will commence. [7535/20]
View answer69. Deputy Pauline Tully asked the Minister for Finance if he will consider allowing a company (details supplied) to reopen immediately. [7678/20]
View answerI propose to take Questions Nos. 64 and 69 together.
I am informed by the Revenue Commissioners that, in respect of registrations and examinations carried out in the National Car Testing Service Centres, a resumption proposal has been submitted by the Road Safety Authority to the Department of Transport, Tourism and Sport that would see a limited number of Centres resume on 8 June 2020 for NCT testing. If this resumption proposal is accepted then the VRT service would recommence on a scaled back basis from 29 June 2020. As details become available they will be updated on the Revenue website.
I am further informed by Revenue that registration on the Revenue Online Service of new cars and cars that have been pre-inspected has not been interrupted.
66. Deputy Richard Boyd Barrett asked the Minister for Finance the measures he will take to ensure that banks which offered term extensions to loans, including mortgages, will not add penalties or recapitalisation or accruals but will resume the exact same repayments pre-Covid-19; and if he will make a statement on the matter. [7665/20]
View answerAs the Deputy will be aware, An Taoiseach, Leo Varadkar T.D. and I, along with the Minister for Business, Enterprise & Innovation, Heather Humphreys T.D., met with the Chief Executives of the five Irish major retail banks earlier this month.
The Taoiseach emphasised the important role of the banking sector in supporting the gradual re-opening of the Irish economy by ensuring a flow of credit to businesses as they begin to trade again, in line with the government’s Roadmap for Re-opening Society and Business.
We welcomed the ongoing work of the banks in helping business customers and mortgage customers impacted by COVID-19, which included the initial three month payment-breaks that allowed households and businesses to defer some of their most significant outgoings. Last month, the members of the Banking and Payments Federation Ireland (BPFI) announced their intention to extend these payment breaks to six months for households and businesses which require it.
The Central Bank is focused on ensuring that extensions to COVID-19 related payment breaks operate in borrowers’ best interests and in line with regulatory requirements. Payment breaks give customers the opportunity to postpone or reduce their repayments on their mortgage, personal or business loans, providing breathing space for borrowers from the severe income shock many households and businesses are experiencing.
The Central Bank has clearly communicated and agreed with the BPFI that it expects that at the end of the agreed payment break that borrowers who can return to full repayments be given, at the minimum, the option to either repay the loan within the remaining term or extend the term of the loan, without penalties noting that borrower circumstances and the appropriateness of each option may differ. These options may result in an increase in monthly repayments due to the overall increase in the cost of credit and this should be fully explained to the borrower. Consumers can also find more information on payment breaks at the Central Bank’s Covid – 19 Hub.
67. Deputy Catherine Murphy asked the Minister for Finance the communication there has been with a bank (details supplied); when it will be possible to recommence valuations; and if he will make a statement on the matter. [7666/20]
View answerI have not had any communication with the bank referred to by the Deputy in relation to the carrying out of property valuations.
It should be noted that the European Union (Consumer Mortgage Credit Agreements) Regulations 2016 (SI 142 of 2016) places certain requirements on mortgage lenders in relation to the standards of, and used by, property appraisers when carrying out a property valuation for mortgage lending purposes. For example, lenders are required that to ensure that appraisers conducting property valuations are professionally competent, use reliable standards and are sufficiently independent from the credit underwriting process so that they can provide an impartial and objective valuations.
Within this overall financial services legal requirement in relation to property valuation for mortgage lending purposes, it can also be noted that the Regulations which set out the temporary Covid-19 public health restrictions (SI 121 of 2020) recognise that financial, insurance and banking services provided by a financial services provider is an essential service, and that such services which are necessary to support any other essential service, including the provision of key third party supports provided under contract to a person providing an essential service, also constitutes an essential service.
The Government has now published a roadmap for the re-opening of society and business, with phase one now in operation. In relation to the roll out of the further phases and the resumption of further economic activity, the Government will keep all relevant issues under continuous review and when it makes it further decisions it will have full regard to the public health advice and also have regard to other important social and economic considerations.
68. Deputy Brendan Howlin asked the Minister for Finance if a person (details supplied) is eligible to avail of the wage subsidy scheme; and if he will make a statement on the matter. [7669/20]
View answerThe Temporary Wage Subsidy Scheme (TWSS) was introduced by the Emergency Measures in the Public Interest (Covid-19) Act 2020. This scheme provides the payment of income supports to employers in respect of eligible employees where the employer’s business activities have experienced significant negative disruption due to the coronavirus pandemic.
The TWSS is operated by employers through their payroll system, thereby ensuring employees will be in receipt of the subsidy payment along with any other payments made by their employer. The employer must include the subsidy as part of employees’ wages and show the amount of the subsidy paid to the employee on the employee’s payslip.
The key eligibility criteria for the scheme are that –
- the business is suffering significant negative economic impact due to the pandemic,
- the employees were on the payroll at 29 February 2020 and were included on a payroll submission in February 2020, and
- the employer had fulfilled its PAYE reporting obligations for February 2020 by 1 April 2020.
I am advised by Revenue that in relation to the person in respect of whom details are supplied, it is a matter for that person’s employer to apply for the TWSS for this person through the submission of the employer’s payroll to Revenue. In applying for the TWSS for this and other employees it is important that the PRSI Class J9 be used on the payroll submission for all employees for whom the TWSS is being sought.
An employer is required to issue a pay slip to each employee for each pay period. The employer is required to separately disclose the amount of the subsidy payment and any additional payment paid by the employer to the employee on the face of the pay slip document. The employee can verify each payment made by the employer by reference to the pay slip document issued by the employer.
I am advised that Revenue has attempted to contact the person whose details were supplied by the Deputy and will continue to do so. The person can, if they wish, provide Revenue with a copy of their payslips for past pay periods and other relevant details to assist with the review procedures being undertaken by Revenue in this case.
71. Deputy Ged Nash asked the Minister for Finance the status of arrears owed to employers under the TWSS relating to employees that were rehired since 1 May 2020; and if he will make a statement on the matter. [7725/20]
View answer76. Deputy Michael McGrath asked the Minister for Finance if an employer that laid off a worker onto the pandemic unemployment payment can rehire that employee under the temporary wage subsidy scheme; and if he will make a statement on the matter. [7891/20]
View answerI propose to take Questions Nos. 71 and 76 together.
The Temporary Wage Subsidy Scheme (TWSS) was is provided for in section 28 of the recently enacted Emergency Measures in the Public Interest (Covid-19) Act 2020.
The TWSS is an emergency measure to deal with the impact of the Covid-19 pandemic on the economy. Of necessity, the underlying legislation and the scheme itself were developed quickly, having regard to the Government objective of providing assistance to employers and employees, where businesses have been seriously affected by the pandemic and the necessary restrictions introduced as a result of this Public Health emergency.
It must be accepted that the TWSS cannot be adapted to meet the particular circumstances of individual employers or employees. The objective of the scheme is to ensure the key relationship between employers and employees is maintained to the greatest extent possible so that businesses can restart operations once the crisis has passed.
In the context of the need for immediate implementation of the TWSS, the scheme necessarily had to build on data returned to Revenue through its real-time PAYE system. The key conditions of the scheme, as prescribed in the underlying law, are that –
- the business is suffering significant negative economic impact due to the pandemic,
- the employees were on the payroll at 29 February 2020, and
- the employer had fulfilled its PAYE reporting obligations for February 2020 before, in general, 15 March 2020, although this deadline was extended recently to 1 April 2020.
The latter two conditions were particularly designed with a view to preventing abuse of the scheme.
Accordingly, it follows that the TWSS can only operate in respect of an employee, whether full-time or part-time, who was on the payroll of the employer as at 29 February 2020. Eligible employers can participate in the scheme in respect of any eligible employees on their payroll, including rehired staff who were temporarily laid off. Where an eligible employee previously laid off has been re-hired, the employee will qualify for the scheme once their claim for social welfare benefit (Pandemic Unemployment Benefit /Jobseekers Benefit) is ceased.
While the TWSS is payable to eligible staff that were rehired after 1 May 2020, I have been advised by Revenue that further IT development work was required to facilitate the processing of such cases. Revenue has completed this system development and the required technology is now in place. Revenue has confirmed that in excess of 30,000 employees have started or restarted employments since 1 May 2020, of which approximately 10,000 are ‘rehired’ staff that are eligible for the TWSS. Employers who submitted payroll after 1 May for those ‘rehired’ staff were processed for refund and the refund will be in employers’ bank accounts early this week. The system will pick-up and process additional re-hires on a daily basis that appear on payroll submissions.
72. Deputy Brendan Griffin asked the Minister for Finance if a decision on a wage subsidy application by a club (details supplied) in County Cork will be re-examined; and if he will make a statement on the matter. [7776/20]
View answerSection 28 of the Emergency Measures in the Public Interest (Covid-19) Act 2020 sets out the qualifying conditions required for access to the Temporary Wage Subsidy Scheme (TWSS). The legislative requirements are that;
- the business is suffering significant negative economic impact due to the pandemic,
- the employees were on the payroll at 29 February 2020, and
- the employer had fulfilled its PAYE reporting obligations for February 2020 by 15 March 2020.
The 15 March deadline in respect of the February 2020 payroll submission was recently extended to ‘before’ 1 April by Revenue in circumstances where all previous payroll submissions were filed before 15 March 2020.
The TWSS builds on data returned to Revenue through the PAYE system and as such is a fully automated solution that is designed around the legislative provisions. The scheme calculates the level of subsidy due based on the employee’s ‘Average Revenue Net Weekly PAY’ (ARNWP) during January and February 2020. The system cannot calculate a subsidy payment for employees that were not on the employer’s payroll at 29 February.
I have been advised by Revenue that the person in question did not begin his current employment until 9 March 2020, which is outside of the specified dates provided in the legislation for the TWSS. For this reason, it was not possible for Revenue to provide his employer with access to the scheme on his behalf.
73. Deputy Thomas Pringle asked the Minister for Finance if the administrative officer audit and compliance 2018 panel which expired on 31 December 2018 is still operative due to the fact that the new panel has not gone to interview stage and the process has been put on hold indefinitely; and if he will make a statement on the matter. [7787/20]
View answerI am advised by Revenue that three panels were formed as a result of the 2018 Administrative Officer Audit and Compliance competition. These three panels expired on 31 December 2019, in line with normal practice on the duration of such panels.
While on relatively rare occasions, Revenue may consider extending panels for business reasons, in this instance there is no business requirement to reinstate the expired panels. Furthermore, reinstatement of the expired panels would disadvantage those who have applied as part of the competition currently in progress.
I am further advised by Revenue that recruitment and selection processes are prioritised as appropriate to meet business needs. In line with best practice and in the context of Government restrictions and physical distancing measures in place during the COVID-19 pandemic, Revenue is expanding the range of remote selection methods in use. As regards the current competition for Administrative Officer Audit and Compliance, registration closed on 27 December 2019; the first stages of selection, online testing and shortlisting, are concluded and candidates have been invited to submit video assessments by 25 May 2020.
74. Deputy Cian O'Callaghan asked the Minister for Finance if his attention has been drawn to home buyers with mortgage approvals based on their pre-Covid-19 financial earnings that are now temporarily on pandemic payments and have lost their mortgage approval; the steps he will take to support families in such situations; and if he will make a statement on the matter. [7851/20]
View answerThe European Union (Consumer Mortgage Credit Agreements) Regulations 2016 (CMCAR) provide that, before concluding a mortgage credit agreement, a lender must make a thorough assessment of the consumer’s creditworthiness. The assessment must take appropriate account of factors relevant to verifying the prospect of the consumer being able to meet his or her obligations under the credit agreement. The CMCAR provide that a lender should only make credit available to a consumer where the result of the creditworthiness assessment indicates that the consumer’s obligations resulting from the credit agreement are likely to be met in the manner required under that agreement. The assessment of creditworthiness must be carried out on the basis of information on the consumer’s income and expenses and other financial and economic circumstances which is necessary, sufficient and proportionate. In addition, the Central Bank’s Consumer Protection Code 2012 imposes ‘Knowing the Consumer and Suitability’ requirements on lenders. Under these requirements, lenders are required to assess affordability of credit and the suitability of a product or service based on the individual circumstances of each borrower.
Within the parameters of this regulatory framework, the decision to grant or refuse an individual application for mortgage credit is a commercial decision to be made by the regulated entity. A loan offer may contain a condition that the lender can withdraw or vary the offer if in the lender’s opinion there is any material change in circumstances prior to drawdown. In such cases, the decision to withdraw or vary the offer is a commercial decision for the lender.
Lenders continue to process mortgage applications and have supports in place to assist customers impacted by COVID-19. The Banking & Payments Federation Ireland (BPFI) has published Covid-19 Support FAQ which customers can consult, or customers can contact their lender directly, if they have any queries or concerns about the impact of COVID-19 on their mortgage application. The Central Bank has also indicated that it expects all regulated firms to take a consumer-focused approach and to act in their customers’ best interests at all times, including during the COVID-19 pandemic.
75. Deputy Michael McGrath asked the Minister for Finance the conditions applied to a member state before it can avail of funding (details supplied); if corporation tax reform in terms of rate, minimum effective tax and digital tax will not be conditions to accessing funding through the model; his plans if the European Commission applies conditions such as corporation tax reform on formal proposals in relation to same; and if he will make a statement on the matter. [7890/20]
View answerAs the Deputy will be aware, Members of the European Council met by video conference on 26th March to discuss the COVID-19 crisis. In their statement of the 26th March, leaders acknowledged that the pandemic constitutes an unprecedented challenge for Europe and the whole world and that it required urgent, decisive, and comprehensive action at the EU, national, regional and local levels. Leaders mandated the European Commission to bring forward proposals for a comprehensive recovery plan including plans for investment across the EU. The European Commission is expected to publish their proposals on 27th May.
On the 13th May, the President of the European Commission, President von der Leyen, made an address to the European Parliament in which she outlined that the Commission’s proposed recovery package would consist of two parts; firstly, the EU Budget/the Multiannual Financial Framework (MFF) and secondly, on top of the MFF, a recovery instrument to be funded through a larger headroom within the EU Budget. We await the European Commission’s proposals.
In the meantime, a number of Member States have published their views on what should be included in the Recovery Plan, how and where the expenditure should be targeted, whether support should be provided through loans and/or grants, whether conditions should be applied to Member States availing of the funding and how the recovery fund should be financed.
On 18th May, Chancellor Merkel and President Macron presented joint French and German proposals for European Recovery. The centrepiece of their proposals is a €500 billion recovery fund for additional EU spending through the EU Budget, jointly borrowed on the markets, to provide financial support for the most affected sectors and regions on the basis of EU budget programmes and in line with European priorities.
The proposals made by France and Germany are an important contribution and a step in the right direction on Europe’s recovery efforts. They are proposals from two Member States - we are assessing the detail of these proposals along with input from other Member States. Agreement on a way forward will require the approval of all 27 Member States.
The Recovery Fund must focus on the most pressing economic needs to reboot the economy once the health crisis has receded. It should be temporary and targeted, prioritising sectors and regions that have been most impacted but also those that can generate and enable sustainable economic growth in the new normal of the post-Covid economy. In particular, it should be deployed to accelerate both the digital and green transitions in the EU. Equally, a recovery fund and other funding must create a future for business models that are viable.
Ireland will continue to engage positively in the MFF and recovery plan discussions and work with Member States and the institutions to build consensus for early agreement. There are issues and matters, including those raised in the French and German proposals, that need careful consideration to assess the implications for Ireland. It will not be until then that we will fully know the specifics of the extent to which and how Member States can avail of funding for the MFF and the Recovery Fund.
The European Commission's proposals on the Post 2020 MFF and Recovery Fund will be the subject of detailed negotiations. When we have sight of their proposals, we will have a clearer understanding of the impacts of them for Ireland.
With regard to the tax proposals linked to the French and German proposed recovery fund, the Deputy will have noted that France, Germany and the European Commission have all expressed their support for the OECD process as the best forum in which to address issues arising in the field of international taxation.
Nevertheless, Commissioner Gentolini recently re-affirmed his intention to propose a new EU levy on digital services and a minimum corporate tax rate in 2021, if global negotiations fall short. While the Franco-German Initiative for European Recovery from the Coronavirus Crisis echoes this ambition, such moves will require the agreement of all Member States. The economic context has changed dramatically in recent months and all countries are now considering what impact the current crisis may have on their overall tax systems, which may influence their views on international tax issues.
Much progress has been made in the current discussions at OECD, and technical work at the OECD is continuing. The intention is to find political agreement for work on addressing tax and digitalisation by the end of 2020 and we remain focused on that goal.
77. Deputy Charlie McConalogue asked the Minister for Finance his plans to include seasonal workers under the wage subsidy scheme in view of the fact that their period of employment ordinarily would be during the summer tourism season; and if he will make a statement on the matter. [7949/20]
View answerThe Temporary Wage Subsidy Scheme (TWSS) is provided for in section 28 of the recently enacted Emergency Measures in the Public Interest (Covid-19) Act 2020.
The TWSS is an emergency measure to deal with the impact of the Covid-19 pandemic on the economy. Of necessity, the underlying legislation and the scheme itself were developed quickly, having regard to the urgent Government objective of getting assistance to employers and employees, where businesses have been seriously affected by the pandemic and the necessary restrictions introduced to fight the spread of the Covid-19 virus. It must be accepted that the TWSS cannot be adapted to meet the particular circumstances of individual employers or employees.
In the context of the compelling need for immediate implementation of the TWSS, the scheme necessarily had to build on data returned to Revenue through its real-time PAYE system. The key conditions of the scheme, as prescribed in the underlying law, are that –
- the business is suffering significant negative economic impact due to the pandemic,
- the employees were on the payroll at 29 February 2020, and
- the employer had fulfilled its PAYE reporting obligations for February 2020 before, in general, 15 March 2020, but extended recently to 1 April 2020.
The latter two conditions were particularly designed with a view to preventing abuse of the scheme. The wage subsidy per employee is calculated based on the net pay reported for January and February 2020. The scheme does not distinguish between ordinary wages, shift allowances, overtime, bonuses or commission or between part-time or full-time employees. Moreover, the scheme has no role in relation to the employer/employee relationship in so far as terms, conditions and entitlements of the employment are concerned.
Accordingly, it follows that the TWSS can only operate in respect of an employee, whether full-time or part-time, who was on the payroll of the employer as at 29 February 2020. Thus, where an individual commenced a new employment after that date, or returned to the payroll of his or her employer after that date following a period of unpaid leave, he or she does not meet the eligibility criteria with the employer as he or she would not have been on the employer’s payroll at that date.
78. Deputy James Browne asked the Minister for Finance his plans to aid small businesses that cannot receive a commercial loan from a bank in spite of the provision of the SME credit guarantee scheme; and if he will make a statement on the matter. [7951/20]
View answerAs Minister for Finance, I have no function in the commercial lending decisions made by banks but if an SME has been refused bank credit then Credit Review can assist them (https://www.creditreview.ie). Credit Review helps SMEs and farmers who have had an application for credit of up to €3 million declined or reduced by the main banks, and who feel that they have a viable business proposition. This is a strictly confidential process between the business, the Credit Review and the bank.
One of my main concerns as Minister for Finance, and of my Ministerial colleagues is to ensure that SMEs have access to sufficient liquidity, and that access to credit for SMEs is maintained. Government has announced a range of measures to assist companies deal with the consequences of the COVID-19 restrictions, and to ensure that they have access to sufficient liquidity. These include tax measures, as well as loan schemes, to assist SMEs. In addition, my colleague Heather Humphreys TD, Minister for Business, Enterprise and Innovation has introduced grant schemes that are available through Enterprise Ireland and the Local Enterprise Offices.
On May 2 a further COVID-19 supports was announced to support SMEs. This includes a Restart Grant which will provide up to a €10,000 grant for micro and small businesses based on a rates/waiver rebate from 2019; a three month commercial rates waiver for impacted businesses; and the ‘warehousing’ of tax liabilities for a period of twelve months after recommencement of trading during which time there will be no debt enforcement action taken by Revenue and no interest charge accruing in respect of the warehoused debt.
You can be assured that I, along with my ministerial colleagues, continue to work to ensure that all necessary supports are available for businesses affected by COVID-19.
80. Deputy Darren O'Rourke asked the Minister for Finance his plans to extend the help-to-buy scheme to second-hand homes; and if he will make a statement on the matter. [7963/20]
View answerThe Government is conscious that there is currently a supply shortage of housing and of the particular challenges faced by first-time buyers. Section 477C of the Taxes Consolidation Act of 1997 provides for The Help to Buy scheme (HTB) which was initially announced on 19 July 2016 as part of the ‘Rebuilding Ireland: Action Plan for Housing and Homelessness’.
HTB was due to terminate on 31 December 2019, however, in Finance Act 2019 I provided for an extension of the scheme, in its present form, for a further two-year period up to 31 December 2021. This extension aligns with the timeline envisaged for building more homes in Rebuilding Ireland.
An increase in the supply of new housing is fundamental to resolving the current crisis. One of the main aims of the policy underpinning the design of HTB was to help encourage the building of additional new properties. By restricting the scheme solely to new dwellings and new self-builds, it is anticipated that the resulting increase in demand for affordable new build homes will encourage the construction of an additional supply of such properties.
If the scheme were also available for second hand properties, it would have little or no effect on the provision of additional supply, and this would consist primarily of ‘economic deadweight’ in terms of incentive effect. Economic deadweight is an important consideration which is taken into account when evaluating new tax incentive measures and refers to the amount of activity that would have taken place anyway in the absence of an incentive or scheme. The higher the level of deadweight, the less the net benefits of the scheme.
Given these considerations, I can confirm to the Deputy that I do not intend to extend the Help to Buy scheme to second hand properties.
