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Wednesday, 3 Jun 2020

Written Answers Nos. 76-100

Gambling Sector

Questions (77)

Niall Collins

Question:

77. Deputy Niall Collins asked the Minister for Finance when betting shops can reopen; and if he will make a statement on the matter. [8809/20]

View answer

Written answers

I refer the Deputy to the response provided by my colleague, the Minister of the Department of Business Enterprise and Innovation, on the 20th May, in relation to this question.

The response is provided in the following link.

https://www.oireachtas.ie/en/debates/question/2020-05-20/635/#pq_635

Disabled Drivers and Passengers Scheme

Questions (78)

Charlie McConalogue

Question:

78. Deputy Charlie McConalogue asked the Minister for Finance his plans to allow persons that are registered blind to avail of tax relief under the disabled drivers and disabled passengers scheme; and if he will make a statement on the matter. [8845/20]

View answer

Written answers

To qualify for the Disabled Drivers and Disabled Passengers Scheme an applicant must be in possession of a Primary Medical Certificate. To qualify for a Primary Medical Certificate, an applicant must satisfy one of the following conditions:

- be wholly or almost wholly without the use of both legs; 

- be wholly without the use of one leg and almost wholly without the use of the other leg such that the applicant is severely restricted as to movement of the lower limbs;

- be without both hands or without both arms;

- be without one or both legs;

- be wholly or almost wholly without the use of both hands or arms and wholly or almost wholly without the use of one leg;

- have the medical condition of dwarfism and have serious difficulties of movement of the lower limbs.

The Scheme represents a significant tax expenditure. Between the Vehicle Registration Tax and VAT foregone, and the fuel grant, the scheme cost €65m in each of 2016 and 2017, €70m in 2018 and €72m in 2019. This figure does not include the revenue foregone in respect of the relief from Motor Tax, which is also available to those who avail of the Scheme.

I understand and sympathise with any person who suffers from a serious physical disability and can’t access the scheme under the current criteria. However, given the scope and scale of the scheme, any possible changes to it can only be made after careful consideration, taking into account the existing and prospective cost of the scheme as well as the availability of other schemes which seek to help with the mobility of disabled persons, and the interaction between each of these schemes.  

Accordingly, I have no plans to amend the qualifying medical criteria for the Disabled Drivers and Disabled Passengers Scheme at this time.

Departmental Staff

Questions (79)

Cathal Crowe

Question:

79. Deputy Cathal Crowe asked the Minister for Finance if he will consider extending panels for Departmental jobs which are valid for a two-year period in view of the fact that the hiring process is at a halt at present and therefore those high up on the list on the panel may lose out as the period will have lapsed. [8876/20]

View answer

Written answers

I wish to inform the Deputy that currently in the Department of Finance there is one internal panel for promotion to Assistant Principal which was due to expire, after one year, on 25th March 2020. However due to the unprecedented COVID-19 crisis the Executive Board has decided to extend the panel. We also have a live internal panel for promotion to Principal Officer which is due to expire on 11th February 2021.

No decision has yet been made on a revised closing date for the Assistant Principal panel but both panels will be kept under review. Staff will be kept informed.

Company Law

Questions (80)

Rose Conway-Walsh

Question:

80. Deputy Rose Conway-Walsh asked the Minister for Finance if he will consider putting in place an investigation into the disposal of the business platform of companies (details supplied) at nominal consideration. [8882/20]

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Written answers

I can confirm for the Deputy that nothing has been brought to my attention to indicate that there was anything inappropriate in the completion of the transaction as described by her.

Notwithstanding this, should the Deputy have evidence that this was the case, including any breach of Company Law, she may wish to refer the matter to the Office of Director of Corporate Enforcement, the Central Bank of Ireland or the Garda National Economic Crime Bureau, the appropriate authorities to investigate such a matter.

Strategic Banking Corporation of Ireland

Questions (81)

Rose Conway-Walsh

Question:

81. Deputy Rose Conway-Walsh asked the Minister for Finance the reason Strategic Banking Corporation Ireland funding provided to a company (details supplied) was used to replace an existing €30 million three-year facility of a bank granted 8 July 2015 on 8 July 2016; his views on whether this is not a contravention of the Strategic Banking Corporation of Ireland Act 2014; and if he will make a statement on the matter. [8883/20]

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Written answers

The Strategic Banking Corporation of Ireland (SBCI) is Ireland’s National Promotional Institution for SMEs. The strategic mission of the Strategic Banking Corporation of Ireland (SBCI) is to deliver effective financial supports to Irish SMEs that address failures in the Irish credit market, while driving competition and innovation, and ensuring the efficient use of available EU resources.

The SBCI uses an on-lending model; this means it does not lend directly to SMEs, rather it facilitates the provision of flexible, appropriately priced funding to Irish SMEs through partner finance providers, known as on-lenders. The SBCI currently has four bank and five non-bank on-lenders.

It would not be appropriate to comment on a specific case. However, please note that the SBCI does not provide funding to On-Lenders to refinance their debt.

Banking Sector

Questions (82)

Rose Conway-Walsh

Question:

82. Deputy Rose Conway-Walsh asked the Minister for Finance if he will request an explanation from a bank (details supplied) the reason a branch of the bank in Ballyhaunis, County Mayo has remained closed during the Covid-19 crisis; when it will reopen; if the matter of financial institutions using the Covid-19 crisis to close local branches will be raised with the Central Bank; and if he will make a statement on the matter. [8884/20]

View answer

Written answers

As the Deputy is aware, I have engaged, and will continue to engage, extensively with the Banking and Payments Federation (BPFI) and the banks directly in relation to supports for personal and business customers affected by the COVID-19 crisis. Furthermore, officials in my Department are alert to issues raised directly by the public and these inform the Department’s ongoing engagement process and policy formation. All the banks, Bank of Ireland included, have continued to evolve and expand the supports they have available and I would expect that this process will continue.

Bank of Ireland has introduced a wide variety of solutions designed to help both personal and business customers affected by the COVID-19 crisis including mortgage breaks and cash flow supports for businesses.

The Deputy may also be aware that, as Minister for Finance, I am precluded from intervening in how Bank of Ireland manages its day-to-day business and relationship with any of its customers.  Decisions in this regard are solely the responsibility of the board and management of the bank which must be run on an independent and commercial basis. The independence of the banks in which the State has a shareholding is protected by Relationship Frameworks which are legally binding documents that cannot be changed unilaterally. These frameworks which are publicly available, were insisted upon by the European Commission to protect competition in the Irish market.

Notwithstanding this, officials in the Department have requested a comment from Bank of Ireland in relation to the manner in which it is managing its branch network during the current crisis and have received the following response:

“Due to COVID-19 Bank of Ireland has made a number of operational changes to safeguard critical services during the pandemic, respond to a significant shift in how customers are banking, and support social distancing requirements.

"To safeguard critical services we prioritised one hundred and sixty one of our larger branches nationwide, as well as our contact centres and online banking which have seen a surge in use over recent months. One hundred and one mainly smaller locations, which had seen a sharp drop in usage, were closed. Colleagues from these locations have been supporting our contact centres and online services manage high volumes of requests, as well as our larger branches where social distancing can be better maintained.

"We’re continuing to see shifts in customer behaviour towards online banking channels, and social distancing requirements remain in place. Our focus therefore remains on protecting the prioritised services across one hundred and sixty one branches, telephone and online banking, while keeping all developments under active review.”

Banking Sector

Questions (83)

Cian O'Callaghan

Question:

83. Deputy Cian O'Callaghan asked the Minister for Finance if human rights and equality training will be provided for the directors of the Central Bank and the State-appointed directors of other banks in line with the recommendation from the A Lost Decade - Study on Mortgage Possession Court Lists in Ireland report; and if he will make a statement on the matter. [8965/20]

View answer

Written answers

I am advised by the Central Bank, and by the relevant commercial banks, that the following arrangements are in place for the training of their directors (in the case of the Central Bank, the members of the Central Bank Commission), relevant to the Deputy’s question:

Central Bank of Ireland

The Central Bank is conscious of its responsibility in ensuring that the principles of human rights and equality are embedded across its work.

The Central Bank provides ongoing training to the members of the Central Bank Commission, primarily through seminars relating to the work of the Bank and its mandate. Commission members are also offered training in governance as and when suitable external courses and programmes are available.

The Central Bank is committed to being a socially responsible and sustainable organisation in how it delivers on its mandate and mission. As a public service organisation, the Central Bank’s obligation to meet its public sector duty is a key part of this wider commitment. In preparing the Central Bank’s Strategic Plan, an assessment of the human rights and equality issues, relevant to the functions of the Central Bank, was carried out.

The Strategic Plan sets out that the Central Bank will ensure:

- Engagement with the public through communications and outreach strategies as part of its commitment to corporate and social responsibility.

- All members of the public who receive services from the Central Bank are provided a professional, efficient and courteous service as set out in the Customer Charter.

- The implementation of its People Strategy promotes and supports the equality and human rights of staff.

- The public is consulted on Central Bank policy developments and the obligations under the Irish Human Rights and Equality Commission 2014 Act will be considered by the Central Bank, where relevant, in the development of such policies.

The Central Bank plays a role in promoting sound governance and culture across its regulated entities through the publication of reports on key Diversity and Inclusion data.

AIB

The Nomination & Corporate Governance Committee, on behalf of the AIB Board, has identified a number of key skills required of its directors, including retail and commercial banking, risk management, strategy development, stakeholder management, digital focus, customer focus, culture, leadership and governance. Diversity is also an important factor in succession planning both at Board and Executive level and has resulted in both the Board and Executive Committee reaching the highest levels of gender balance in the Group’s history. The current culture across the Group and its cultural ambitions were front and centre of the Board’s mind in 2019. The Board is committed to creating and nurturing the right culture in AIB and is fully engaged in the bank’s culture programme, dedicating significant agenda time for discussion, debate and providing overall direction to the development of the programme.

Bank of Ireland

Each Bank of Ireland director receives an induction plan tailored to his or her specific requirements. The continuous development requirements of the Board and individual directors, as required, are met through the provision of Group Board training, presentations, site visits and individual bespoke training sessions as required.

In addition to collective education and development programmes in 2019, individual Directors actively engaged in one to one focus sessions with Management on topics such as vulnerable customers, SMEs, the Irish Mortgage Market, technology transformation and the Irish Economy.

The Board oversees the Group’s cultural transformation which continues to strengthen, with colleague engagement and positive culture indicators continuing to improve. The Board sets the tone from the top and, with executive management, is focused on ensuring that the Bank conducts its business responsibly and ethically at all times.

Permanent TSB

The PTSB Board training programme is applicable to all Directors and is reviewed on an ongoing basis. Diversity and Inclusion workshops formed part of the training programme for Directors in 2019, is an ongoing topic at Board and Board Committee meetings, and will form part of future Board training programmes. The Board is the owner of the Bank’s Diversity and Inclusion Strategy.

Central Bank of Ireland

Questions (84, 85)

Cian O'Callaghan

Question:

84. Deputy Cian O'Callaghan asked the Minister for Finance the way in which the Central Bank measure the impact its decisions are having on housing rights, equality and women; and if he will make a statement on the matter. [8966/20]

View answer

Cian O'Callaghan

Question:

85. Deputy Cian O'Callaghan asked the Minister for Finance if he will request a quarterly report from the Central Bank to accompany the quarterly statistics on mortgage arrears on the impact its decisions are having on housing rights issues and disproportionate effects its supervisory actions are having on women in line with the recommendation from the A Lost Decade - Study on Mortgage Possession Court Lists in Ireland report; and if he will make a statement on the matter. [8967/20]

View answer

Written answers

I propose to take Questions Nos. 84 and 85 together.

I have been advised by the Central Bank of Ireland (the Central Bank) that it is focused on promoting the welfare of the people of Ireland as a whole and, through membership of Europe’s Monetary and Banking Unions, the welfare of the wider people of Europe.

The Central Bank assures me that it is conscious of its responsibility in ensuring that the principles of human rights and equality are embedded across its work.

When conducting fundamental reviews of macroprudential policy framework, or specific instruments, including the mortgage measures, the Central Bank issues a public consultation or a call for evidence, where individuals or organisations can submit their views. The public consultations and calls for evidence are generally open for submissions on any issue related to the impact of the macroprudential framework or specific policies. This includes submissions related to discrimination, equality and human rights. The Macroprudential Measures Committee or the Central Bank Commission (depending on the policy instrument being considered) is presented with the outcomes of public consultation and any implications for policy development.

The Central Bank is committed to being a socially responsible and sustainable organisation in how it delivers on its mandate and mission. As a public service organisation, the Central Bank’s obligation to meet its public sector duty is a key part of this wider commitment. In preparing the Central Bank’s Strategic Plan, an assessment of the human rights and equality issues, relevant to the functions of the Central Bank, was carried out.

The Strategic Plan sets out that the Central Bank will ensure:

- The implementation of its People Strategy promotes and supports the equality and human rights of staff.

- Engagement with the public through communications and outreach strategies as part of its commitment to corporate and social responsibility.

- All members of the public who receive services from the Central Bank are provided a professional, efficient and courteous service as set out in the Customer Charter.

- The public is consulted on Central Bank policy developments and the obligations under the 2014 Act will be considered by the Central Bank, where relevant, in the development of such policies.

The Central Bank also plays a role in promoting sound governance and culture across its regulated entities through the publication of reports on key Diversity and Inclusion data.

While it is not my intention to request a report as suggested by the Deputy, he will be aware, within the remit of the Central Bank’s responsibilities for safeguarding stability and protecting consumers, its approach to mortgage arrears resolution is focused on ensuring the fair treatment of all borrowers through a strong consumer protection framework and ensuring that regulated entities have appropriate arrears resolution strategies and operations in place.

The Central Bank first introduced the Code of Conduct on Mortgage Arrears (CCMA) in 2009 in the midst of an economic and employment crisis to provide statutory safeguards for vulnerable, financially-distressed borrowers in arrears or at risk of falling into arrears on a primary residence. Further strengthened in subsequent years, the CCMA, and within it, the Mortgage Arrears Resolution Process (MARP), is just one part of the national policy framework of supports and protections to assist people with mortgage arrears difficulties.

The CCMA is a statutory Code put in place to ensure that regulated entities have fair and transparent processes in place for dealing with borrowers in or facing mortgage arrears. Within this process, due regard must be given to the fact that each case is unique and needs to be considered on its own merits. All cases must be handled sympathetically and positively by the regulated entity, with the objective at all times of assisting the borrower to meet his or her mortgage obligations. Regulated entities must comply with the CCMA as a matter of law.

Under the CCMA, a regulated entity may only commence legal proceedings for repossession where it has made every reasonable effort to agree an alternative repayment arrangement (ARA) with the borrower and other clear requirements are met or the borrower has been classified as not co-operating. This framework requires a regulated entity to exhaust the options available from its suite of ARAs before taking action which may result in the borrower losing his/her home (whether by voluntary sale or repossession). During the legal process, the borrower has the opportunity to re-engage with the regulated entity to find a solution. In some circumstances, however, loss of ownership may be unavoidable.

I would also like to draw the Deputy's attention to the Abhaile scheme, the aim of which is to ensure that people who are at risk of losing their homes get assistance to address their mortgage arrears and to help them wherever possible, to remain in their homes. The Insolvency Service of Ireland have stated that if a debtor can, at least, service the current market value of their home, irrespective of the mortgage balance, a Personal Insolvency Practitioner will be able to secure a permanent solution that returns the debtor to solvency and allow them remain in their family home. In over 90% of Personal Insolvency Arrangements, the debtor has remained in their home notwithstanding the fact that the majority of such cases were in long term arrears.

Finally, the Government is committed to assisting all its citizens who are in mortgage difficulties and even more so at this difficult time. The Banking and Payments Federation Ireland announced last week that it's members had 78,000 mortgage payment breaks in place for customers who are affected by the Covid-19 crisis. I would urge all those in difficulty to engage with their financial institution and with the Abhaile and Money Advice and Budgeting Services (MABS).

Flexible Work Practices

Questions (86)

Cian O'Callaghan

Question:

86. Deputy Cian O'Callaghan asked the Minister for Finance if his Department has conducted research on the impact of moving to a four-day work week; and if he will make a statement on the matter. [8973/20]

View answer

Written answers

I wish to inform the Deputy that the Department of Finance has not, at this time, conducted any research on the impact of moving to a four-day work week.

However the Department operates a number of schemes allowing staff avail of alternative working arrangements and a number of these are listed below. 

Work Sharing

In the Department of Finance work sharing is available to all grades, subject to business needs. Currently 31 our staff are availing of work sharing.        

Flexible Working Hours

All staff in the Department, up to HEO/AO, have access to the Flexible Working Hours system. Some longer serving APs who had access to flexitime on 30 June 2013, retained access on a personal basis for as long as they remain in the same grade under the Haddington Road Agreement. APs appointed after this date and those above that grade do not have access to accumulate additional hours. As senior officials these self-manage their own time.

On 9 April 2020, due to the unprecedented impact of COVID-19 on normal working arrangements, the normal operation of flexi-time or equivalent attendance management rules, including any flexi-time accruals and deficits, was temporarily suspended to facilitate the required new ways of working across the public service.

Career Break

Career Breaks are available to all staff, subject to business needs. We currently have 14 staff on career breaks ranging in grade from CO to PO.

Shorter Working Year Scheme

In the Department of Finance all variations of the shorter working year scheme are available to all grades, subject to business needs. The number of staff availing of SWYS in 2020 is 17.

In addition to these schemes, staff are entitled to all statutory leave including annual and parental leave.

Small and Medium Enterprises

Questions (87)

Cian O'Callaghan

Question:

87. Deputy Cian O'Callaghan asked the Minister for Finance if financial supports will be made available to SMEs in the range of financial supports provided to the banking sector during the financial crash of 2008; and if he will make a statement on the matter. [8981/20]

View answer

Written answers

Covid-19 has brought unprecedented challenges for all of us in society. The Government recognises the importance of the SME sector that accounts for over 99 percent of businesses and nearly 70 per cent of employment in the Irish economy. That is why a key focus of Government has been to improve the supports provided for businesses since the start of this crisis.  These supports are kept under review and we will continue to offer support as SMEs work through the challenges facing them. 

The supports provided to businesses are reflected in our expectation that there will be a general government deficit this year in the range of €23 to €30 billion, as I informed the House on 20 May. Our level of public debt will increase significantly, temporarily reversing the downward trend in our debt-to-GDP ratio.

As I have said previously, this is entirely appropriate, and is in line with the experience of our European colleagues, but it is essential that Ireland’s budgetary position does not become an outlier in the future. Increasing borrowing is possible because of the careful management of the public finances in recent years, and the next Government must be mindful of the reality of the budgetary situation in future years.

These actions have enabled Government to introduce a series of measures and supports to help businesses including the Temporary Wage Subsidy Scheme (TWSS) and the proposed ‘warehousing’ of certain COVID-19 related tax debts which are two significant measures introduced to support businesses immediate cash flow challenges.

Furthermore, together with my colleagues the Minister for Business, Enterprise and Innovation, Ms Heather Humphreys and the Minister for Agriculture, Food and Marine, Mr Michael Creed, Government announced a package of measures aimed at supporting businesses and farmers of varying sizes and with varying needs including the provision of grants and loans, in relation to, working capital, longer-term finance and business advisory supports. A comprehensive list of these measures can be found at: https://www.gov.ie/en/service/63d47e-government-supports-for-covid-19-impacted-businesses/

I can assure the Deputy that I continue to work with my colleagues across Government to examine further appropriate supports to assist businesses impacted by Covid-19.

Question No. 88 answered with Question No. 40.

Wage Subsidy Scheme

Questions (89)

Michael McGrath

Question:

89. Deputy Michael McGrath asked the Minister for Finance if the Revenue Commissioners determined that an employer did not qualify for the temporary wage subsidy scheme after the subsidy was provided, if the liability for repaying the Revenue Commissioners falls on the employer and not the employee; if there are protections for employees that are of the view their employer does not qualify; and if he will make a statement on the matter. [9049/20]

View answer

Written answers

The legislation governing the Temporary Wage Subsidy Scheme (TWSS) is set out in section 28 of the Emergency Measures in the Public Interest (Covid-19) Act 2020. The administration of the TWSS is under the care and management of Revenue.

The burden of compliance in relation to the TWSS rests solely with the employer rather than the employee.   

Any amount due to be refunded to Revenue under the TWSS, where the employer was not entitled to receive the wage subsidy in respect of the employee, is treated as if it were tax due and payable by the employer from the date the wage subsidy amount in question had been paid by Revenue and is payable by the employer.

Additionally, I am advised by Revenue as follows.

Of necessity, Revenue’s primary focus in operating the TWSS so far has been on providing a timely and efficient customer support service to ensure that much needed financial assistance is paid to employers and employees as quickly as possible.  In due course, Revenue will be undertaking a comprehensive programme of compliance checks and interventions in relation to employer eligibility for the scheme.  While the scheme operates at employer level on largely self-assessment principles, Revenue will expect businesses to be able to produce relevant supporting documentation when requested to do so and to fully engage with Revenue on any follow up discussions or checks.  Eligibility for the TWSS is initially determined largely on the basis of the self-assessment and declaration by the employer concerned, combined with a risk focused follow up verification by Revenue involving an examination of relevant business records where that is considered necessary.

Revenue further advises that where an employer has been paid a wage subsidy in respect of an employee and it transpires that the employer has not passed on the wage subsidy to the employee, or that the employer was not entitled to receive the wage subsidy in respect of the employee, the relevant law requires that the employer must refund the wage subsidy amount to Revenue. Any amount due to be so refunded to Revenue is treated as if it were tax due and payable by the employer from the date the wage subsidy amount in question had been paid by Revenue and is automatically so due and payable by the employer without the making of an assessment.  However, where necessary, Revenue may make an assessment to recover the amounts in question and the provisions of tax law governing assessments to income tax, appeals against such assessments and the collection of and recovery of income tax apply in relation to the assessment, collection and recovery of wage subsidy amounts from employers. In other words, the full suite of tax collection and enforcement powers, including the charging of interest on amounts due to be refunded by employers, is available to Revenue to recover wage subsidy amounts due to be refunded by employers.

Section 28 of the Emergency Measures in the Public Interest (Covid-19) Act 2020 also provides for penalties for abuses of the scheme but only in certain prescribed circumstances. Thus, an employer is liable to a penalty of €4,000, where the employer fails to include in, and separately identify in, the wage slips legally required to be given to employees under the Payment of Wages Act 1991 the amount of the wage subsidy. Where the employer who fails to comply is a body of persons, the secretary of that body is liable to a separate penalty of €3,000. These penalties are designed to ensure transparency around the wage subsidy and to protect employees who are entitled to know what wage subsidy the employer has received in respect of them.

There are more severe criminal penalties where an employer knowingly or wilfully delivers an incorrect return or statement, or knowingly or wilfully furnishes any incorrect information, in connection with the temporary wage subsidy scheme or where a person knowingly assists another person to furnish incorrect information in relation to the scheme. The penalties can be a fine of up to €5,000 and/or imprisonment for a term not exceeding one year in the case of a summary conviction and a fine of up to €126,970 and/or imprisonment for a term not exceeding 5 years in the case of a conviction on indictment.  The penalties in question are severe because they are designed to protect against deliberate fraud by unscrupulous employers seeking to abuse a generous and expensive State support. However, given the way the TWSS is structured, in that the employer must have been compliant with its PAYE/PRSI/USC reporting obligations and the employee must have been on the employer’s payroll at 29 February 2020, the opportunity for deliberate fraud is limited.

Finally, I would add that if employees have concerns about their employers incorrectly operating or availing of the TWSS, it is open to them to contact Revenue about their concerns.

Tax Collection

Questions (90)

John McGuinness

Question:

90. Deputy John McGuinness asked the Minister for Finance the amount of VRT and other tax liabilities collected on behalf of the Revenue Commissioners by NCT centres since a company (details supplied) was appointed to do so; when the tax collected by the company is transferred to the Revenue Commissioners; the amount outstanding; and if he will make a statement on the matter. [9068/20]

View answer

Written answers

I am informed by the Revenue Commissioners that Applus Car Testing Service Limited was appointed as a competent person by Revenue from 1 September 2010.  Since this date, Applus Car Testing Services Limited has collected, on behalf of the Revenue Commissioners, a total of €1,246,614,802 comprising VRT €1,223,138,919 and VAT €23,475,883 (overwhelmingly relating to used imported vehicles).  These taxes are paid to Revenue on the fifteenth day of the month following the month the vehicles are registered.  I am further informed by Revenue that there are no outstanding amounts and, as the NCTS Centres have been closed since 28 March 2020, there are also no accumulated amounts.

Credit Unions

Questions (91)

Cian O'Callaghan

Question:

91. Deputy Cian O'Callaghan asked the Minister for Finance the remaining policy, legislative or regulatory obstacles that are preventing credit unions from being able to provide funding for social housing through investments in approved housing bodies; and if he will make a statement on the matter. [9103/20]

View answer

Written answers

In 2017, the Central Bank undertook a review of the investment framework for credit unions.  On 1 February 2018, the Central Bank published amending investment and liquidity regulations for credit unions. 

Since 1 March 2018, credit unions have been permitted to invest in regulated investment vehicles where the underlying investments are investments in Tier 3 Approved Housing Bodies (AHBs) for the provision of social housing. The Regulations require that investments by credit unions in Tier 3 AHBs must be made through a regulated investment vehicle. The maximum permitted investment amount per credit union is 50% of a credit union's regulatory reserves where a credit union has total assets of at least €100 million and 25% of a credit unions regulatory reserves for all other credit unions. These limits may facilitate a combined sector investment in Tier 3 AHBs of close to €700 million.

As such the Government and the Central Bank have fulfilled their role and it is now up to both the credit union and social housing sectors themselves to progress and develop any specific funding mechanisms. Notwithstanding the above, my Department will continue to engage with the credit union movement on appropriate mechanisms for them to establish a vehicle to invest in approved housing bodies.

I am also advised by the Department of Housing, Planning and Local Government that the Irish Council for Social Housing (ICSH), along with six Tier 3 AHBs, have worked with specialist financial advisors to establish a funding mechanism or special purpose vehicle which would source suitable sources of non-State finance to fund the delivery of social housing by AHBs, based on best value for money. Market testing undertaken revealed good interest in lending to the AHB sector from various lenders, including the credit union sector. So far, one AHB has set up an SPV and several AHBs have sourced finance from private institutions. The work of the ICSH was supported by grant funding from the Department of Housing, Planning and Local Government.

Tax Code

Questions (92)

Duncan Smith

Question:

92. Deputy Duncan Smith asked the Minister for Finance if his Department will instruct businesses to base the benefit-in-kind company vehicle calculation on the previous year's mileage, that is 2019, as opposed to January 2020 for overall 2020 calculation in view of the fact that January is a month in which regular business operations are slowed due to a number of factors; and if he will make a statement on the matter. [9104/20]

View answer

Written answers

As the Deputy will be aware, in accordance with section 101 of the Ministers and Secretaries (Amendment) Act 2011, the Revenue Commissioners are independent in the performance of their functions under, or for the purpose of, the laws governing the tax code.   

I am aware that, for the period of the current COVID-19 crisis, Revenue has already agreed concessional treatment in relation to the operation of benefit-in-kind (BIK) tax charge on employer-provided vehicles. Details of this can be accessed via the following link:

https://www.revenue.ie/en/corporate/communications/covid19/compliance-with-certain-reporting-and-filing-obligations.aspx

Value Added Tax

Questions (93)

Christopher O'Sullivan

Question:

93. Deputy Christopher O'Sullivan asked the Minister for Finance if he will consider a reduction in the VAT rate to 21% on goods to help small and medium enterprise businesses compete against online shopping outlets. [9115/20]

View answer

Written answers

I am advised by Revenue that where a business is established in the State and supplies goods online to Irish customers VAT is chargeable at the same rate as applies to the sale of similar goods in a shop.  In general, sales of goods by traders in other EU member states to Irish customers are subject to the same rate of VAT as domestic sales of goods where the value of the sales to Irish customers by that trader exceeds the Irish distance-selling threshold of €35,000 in any year; otherwise the VAT rate applicable in that EU trader’s Member State applies. Equally, Irish traders selling goods to private customers in other EU Member States may apply Irish VAT unless they exceed the distance selling threshold for that Member State. Subject to certain exclusions, goods purchased online and imported from non-EU countries are subject to Customs duty and VAT at the point of importation. The rate of VAT is the same as if that good had been supplied in the State.

As the Deputy may be aware, an exemption from VAT already exists for small business who sell goods. Where their turnover does not exceed or is unlikely to exceed €75,000 in any continuous 12-month period, they are not required to register for VAT or charge VAT on their supplies.

It is important to note that any reduction in VAT rates incurs a cost to the exchequer, which would necessitate recovery elsewhere.

Value Added Tax

Questions (94)

Éamon Ó Cuív

Question:

94. Deputy Éamon Ó Cuív asked the Minister for Finance if he will consider raising the threshold over which companies are required to register for VAT from €35,000 to €50,000 to reduce the cost of administration for small businesses; and if he will make a statement on the matter. [9172/20]

View answer

Written answers

I am advised by the Revenue Commissioners that VAT is governed by the EU VAT Directive (Council Directive 2006/112/EC), with which Irish VAT law must comply. The Directive provides that VAT registration thresholds may only be raised by Member States to maintain their value in real terms, that is, they may only be increased in line with inflation. Our VAT thresholds were increased to their current values, €37,500 for services and €75,000 for goods, on 1 May 2008 and as the Central Statistics Office figures show the consumer price index is below the level it reached in 2008, it is not possible to increase these thresholds.

Ireland’s VAT registration thresholds for small enterprises and the self-employed are among the highest in the EU. In addition, SMEs benefit from a range of VAT simplification measures including simplified and electronic invoicing, special schemes for retailers and pharmacists, the facility to make VAT returns on a bi-annual or annual basis, the cash receipts basis of accounting where the trader is not required to pay VAT until payment for the supply is received, the facility for small businesses to submit an annual VIES return rather than monthly and the Mini One Stop Shop which allows business to register, file and pay VAT due in all Member States through the Irish MOSS system.

Insurance Industry

Questions (95)

Matt Carthy

Question:

95. Deputy Matt Carthy asked the Minister for Finance the period for which a quotation from an insurance company should stand prior to being withdrawn; and if he will make a statement on the matter. [9192/20]

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Written answers

As Minister for Finance, I am responsible for the development of the legal framework governing financial regulation. The issue of the validity of an insurance quotation is one that comes under the consumer protection code and therefore the remit of the Central Bank. However, in order to be as helpful to the Deputy as possible, my officials sought information from the Central Bank  on this matter.

In response, the Central bank indicated that its Consumer Protection Code (the “Code”) requires certain information to be included in an insurance quotation. Assuming that all details provided by the consumer are correct and do not change, the quotation must include the monetary amount of the quotation, the length of time for which the quotation is valid and the full legal name of the relevant underwriter. The Code does not refer to how long an insurance quotation should be valid for, only that the regulated entity must provide this information in the quote provided.

There are certain types of insurance like car and home insurance that have to be renewed each year. Under the Non-Life Insurance (Provision of Information) Regulations 2007, general insurance companies must send out a renewal notice at least 20 days before the renewal date to allow consumers to shop around for the best policy.

It should be noted that Central Bank has no remit over the pricing of insurance policies or over the makeup and content of products. These are commercial decisions for the various insurers themselves.

In addition, on their website, the Competition and Consumer Protection Commission recommends that consumers ask insurers how long their quotes are valid for when shopping around for insurance.

Question No. 96 answered with Question No. 42.
Question No. 97 answered with Question No. 48.

Wage Subsidy Scheme

Questions (98)

Michael McGrath

Question:

98. Deputy Michael McGrath asked the Minister for Finance if assistance will be provided to a business in relation to an operational matter relating to the temporary wage subsidy scheme (details supplied); and if he will make a statement on the matter. [9263/20]

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Written answers

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 have been developed very quickly, having regard to the overarching urgent Government objective of getting much needed 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. 

The scheme is designed to taper support to nil where an employer pays normal wages.  In addition, it does not apply where the employer pays overtime in addition to normal wages to its employees.

The TWSS cannot be tailored to meet every individual set of circumstances for either employers or employees. The core principles of the scheme are that the business is suffering significant negative economic impact due to the Covid-19 pandemic, that the employees were on the payroll at 29 February 2020 and that the employer had fulfilled its PAYE reporting obligations for February 2020 before 1 April 2020.  The scheme is predicated on the employer wanting to keep the employees on the payroll and to retain them until business picks up. The employer is expected to make best efforts to maintain the employee’s net income as close as possible to normal net income for the duration of the Subsidy period. There is, however, no minimum amount that the employer must pay as an additional payment in order to be eligible for the scheme, but for Revenue operational systems reasons the employer will need to enter at least €0.01 in Gross Pay when running its payroll. 

Question No. 99 answered with Question No. 72.

Wage Subsidy Scheme

Questions (100)

Micheál Martin

Question:

100. Deputy Micheál Martin asked the Minister for Finance if he will address a matter raised in correspondence (details supplied) in relation to the temporary wage subsidy scheme; and if he will make a statement on the matter. [9330/20]

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Written answers

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. 

Of necessity, the underlying legislation and the scheme itself were developed quickly, having regard to the overarching, urgent Government objective of getting much needed financial 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 scheme cannot be adapted to meet the individual circumstances of employers or employees. 

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, 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 subsidies provided by the TWSS are designed to be passed on by employers to their employees through payroll. The rates of wage subsidy payable are based, largely, on the emoluments of employees for January and February 2020 as reported to Revenue in employers’ payrolls.  The rates are determined in accordance with the underlying law and the determinations of subsidy amounts for particular classes of employees made by me, as Minister for Finance, on 16 April 2020.  Those determinations provide as follows:

For employees with previous net emoluments of less than €586 per week, the wage subsidy shall not exceed €410 per week in accordance with the following principles:

- an 85% subsidy is payable in the case of employees whose average net weekly emoluments does not exceed €412;

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

- a 70% subsidy is payable in the case of employees whose average net week emoluments is more than €500 but not more than €586, with a maximum cap of €410 applying.

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

For employees with previous net emoluments in excess of €586 per week, including those whose previous net emoluments exceeded €960 per week, a tiered approach will apply. The maximum subsidy payable is €350 per week, with a tiered approach operating to take into account both the amount paid by the employer and the level of reduction in pay borne by the employee. In essence:

- a subsidy of €350 is payable to employees with average net weekly emoluments greater than €586, where the employer pays sufficient gross salary which equates to an amount up to 60% of the employee’s net weekly earnings.

- a subsidy of €205 is payable to employees with average net weekly emoluments greater than €586, where the employer pays sufficient gross salary which equates to an amount that is more than 60%, but not more than 80%, of the employee’s net weekly emoluments. 

- no subsidy is payable to employees with average net weekly emoluments greater than €586, where the employer pays sufficient gross salary which equates to an amount that is more than 80% of the employee’s net weekly earnings. 

Finally, for employees whose current net emoluments exceeds €960 per week, no subsidy applies regardless of the level of any reduction in pay.   To calculate the level of subsidy payable, current pay is compared with previous average net weekly pay for January/February.  This subsidy will be tapered to ensure that the total weekly income consisting of the employer contribution plus the wage subsidy amount does not exceed €960 per week in any individual case.

The Deputy has raised the specific issue of taking into account income from occupational pensions when calculating the amounts of wage subsidy.  I am advised by Revenue that the TWSS provides that wage subsidy amounts and limits in relation to individual employees are calculated by reference to the total emoluments of the employee concerned. For this purpose, there is no distinction made between the emoluments from an occupational pension and the emoluments from an employment.  Where an individual has two or more sources of emoluments, be they employments or an employment and an occupational pension, all sources are looked at when considering the amounts of wage subsidy available in relation to the employee.  It would be inequitable to exclude occupational pension amounts, which can be significant in many cases, when calculating wage subsidy amounts available in relation to individual employees.

I have also been advised by Revenue that during the transitional phase of the TWSS, up to 3 May 2020, if an employee had multiple employments, each employer individually operated the scheme based on 70% of each employee’s average net weekly pay with that employer.  During the operational phase of the TWSS from 4 May 2020, earnings from all active employments and occupational pension sources are combined.  Thus, the average net weekly pay from each such source is aggregated to calculate the employee’s overall average net weekly pay. This is then used to calculate an employee’s maximum wage subsidy and the wage subsidy entitlement is split across each of the emolument sources based on the percentage of the employee’s average net weekly pay from each such source, with each employer provided with an employer “maximum weekly wage subsidy” and the “maximum weekly employer pay before tapering” to apply to the employee’s payroll.  This personalised information will ensure that the employee’s overall position is taken into consideration when calculating the employee’s subsidy entitlements. This is to allow the concentration of resources to protect incomes, in a proportionate way having regard to available resources and employer contributions by way of wage top ups.

It follows that if one of the sources of the employee’s emoluments, such as, in this instance, the occupational pension provider, is not operating the TWSS, the employee will only get the benefit of the wage subsidy in relation to the employment that is operating the TWSS.  In the specific case that is the subject of this question, the employee’s total average net weekly pay across his employment and occupational pension is greater than €586. Consequently,  the maximum wage subsidy the employee is entitled to would be €350 or €205, depending on the amount of wage top up provided by the employer, and not as has been suggested by the employee concerned a subsidy amount based on 85% of his average net weekly pay from his employment on the grounds that that weekly pay from that employment is €586 or less.     

In relation to the administrative process for availing of the TWSS, Revenue advises me that it has repeatedly advised employers that for a claim for the subsidy in relation to an employee to be identified and processed correctly, the employer must use the PRSI rate of J9 for that employee in its payroll submission to Revenue.  Where a payroll submission is made to Revenue with a J9 PRSI class, it is extremely important to ensure that the payroll submission is not subsequently deleted or amended.  As Revenue’s systems were developed quickly to cater for the TWSS, attempts to delete or amend previous refund-related payroll submissions are necessarily flagged for attention by Revenue and may cause further difficulties for the employer and disrupt the refund process. 

Finally, where an employer wishes to engage with Revenue on general issues relating to the scheme, the employer should contact Revenue’s National Employer Helpdesk via the myEnquiries system, providing details of the query and relevant contact information.  I have been assured by Revenue that in the case that is the subject of this question the employer concerned received timely communication in relation to each query raised.

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