Tuesday, 9 Jun 2020

Written Answers Nos. 41-60

Tax Reliefs

Questions (41)

Colm Burke

Question:

41. Deputy Colm Burke asked the Minister for Finance if he will consider retaining farm consolidation relief (details supplied); and if he will make a statement on the matter. [9925/20]

Written answers

Minister for Finance

Farm Consolidation Stamp Duty relief is a measure which allow a farmer to claim relief from stamp duty where he or she sells land and purchases land, in order to consolidate his or her holding. The relief, as set out in section 81C of the Stamp Duties Consolidation Act 1999, is due to expire at the end of this year.

There are a number of conditions that must be satisfied for the relief to apply. There must be both a sale and a purchase of land within a period of 24 months of each other. Where other qualifying conditions are satisfied, stamp duty is chargeable only to the extent that the value of the land that is purchased exceeds the value of the land that is sold. A reduced rate of 1% is charged on the excess, if any, of the purchase value. If the sale takes place before the purchase, then relief will be given at the time of purchase. However, if the purchase takes place first, then stamp duty will have to be paid but can subsequently be refunded when the sale takes place.

An important condition for the relief is that Teagasc must issue a certificate stating that a sale and purchase (or an exchange of farmland) was made for farm consolidation purposes. The criteria to be used by Teagasc for this purpose and the information to be supplied are contained in guidelines published by the Minister for Agriculture, Food and the Marine.

Following the farm consolidation, a farmer must retain ownership of the farmland for a period of five years and must use the land for farming. Where any part of the land is disposed of before the end of this five-year holding period, the stamp duty relieved can subsequently be recovered by Revenue, or partly recovered, as appropriate.

My Department is currently carrying out an ex-post evaluation of the Stamp Duty relief which will examine the case for any amendment or extension of the relief beyond its current expiry date. In this regard, my officials have been in contact with the IFA, the ICMSA and Macra na Feirme, as well as with their colleagues in the Department of Agriculture, Food and the Marine and Revenue in order to gather views and opinions which will help inform the evaluation of the relief. The findings of this evaluation will feed into the decision-making process in the run up to Budget 2021 and Finance Bill 2020.

Consolidation relief in respect of capital gains tax (CGT) is also available under section 604B of the Taxes Consolidation Act 1997. This relief was extended to 31 December 2022 by section 35 of Finance Act 2019.

The Deputy will appreciate that it would not be appropriate for me to comment at this time, on what changes, if any, are being considered in this relief or any other tax relief.

Cycle to Work Scheme

Questions (42, 62)

Catherine Murphy

Question:

42. Deputy Catherine Murphy asked the Minister for Finance the number of persons that have availed of the cycle to work scheme since it was introduced by year; his plans to further enhance the scheme or modify it in 2020 and or 2021; the date on which the €1,000 threshold was reviewed; his plans to increase or decrease the threshold; and if he will make a statement on the matter. [9973/20]

Neasa Hourigan

Question:

62. Deputy Neasa Hourigan asked the Minister for Finance his plans to roll out the bike to work scheme to the self-employed in view of Covid-19 related increase in cycling; the estimated cost of extending the bike to work scheme to the self-employed; and if he will make a statement on the matter. [9993/20]

Written answers

Minister for Finance

I propose to take Questions Nos. 42 and 62 together.

I am advised by Revenue that section 118(5G) of the Taxes Consolidation Act 1997 provides for the cycle to work scheme. This scheme provides an exemption from benefit-in-kind where an employer purchases a bicycle and associated safety equipment up to a maximum of €1,000 for an employee to use, in whole or in part, to travel to work. Safety equipment includes helmets, lights, bells, mirrors and locks but does not include child seats or trailers.

Benefit-in-kind is a charge to tax that applies where an employer provides an employee with a benefit such as a bicycle, car or accommodation. As stated above, an exemption from benefit-in-kind applies in relation to the cycle to work scheme, provided the required conditions are met. However, where an employer-employee relationship does not exist, for example, in the case of self-employed individuals, such individuals cannot qualify for the scheme.

Further information on the cycle to work scheme can be found on Revenue’s website, available here.

It is not possible to estimate the tax cost of extending the scheme to self-employed individuals.

The scheme operates on a self-administration basis, and relief is automatically available provided the employer is satisfied that the conditions of their particular scheme meet the requirements of the legislation. There is no notification procedure for employers involved. This approach was taken with the deliberate intention of keeping the scheme simple and reducing administration on the part of employers.

Accordingly, there are no records available on the number of people availing of the scheme.

Finally, the expansion of any scheme does of course create a cost and that cost must be recovered elsewhere. For that reason, while the scheme is kept under review by officials, I have no plans at present for any change to the €1,000 limit or to change the scope of the scheme.

Question No. 43 answered with Question No. 39.

Covid-19 Pandemic Supports

Questions (44)

Denis Naughten

Question:

44. Deputy Denis Naughten asked the Minister for Finance if third-level student accommodation providers that have refused to refund accommodation costs to students forced to leave college due to the pandemic will not receive State Covid-19 supports; and if he will make a statement on the matter. [10025/20]

Written answers

Minister for Finance

The Temporary Wage Supplement Scheme (TWSS) is an emergency measure to deal with the impact of the Covid-19 pandemic on the economy. The TWSS is intended to maximise staff retention and firm viability by maintaining the link between the employer and employee insofar as is possible through this period.

The statutory requirements for access to the scheme include 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 particular circumstances outlined by the Deputy would not affect eligibility for the TWSS.

EU Funding

Questions (45)

Michael McGrath

Question:

45. Deputy Michael McGrath asked the Minister for Finance if there will be conditions assigned to the €750 billion stimulus proposal by the European Commission, specifically in relation to corporation tax or digital tax; and if he will make a statement on the matter. [10327/20]

Written answers

Minister for Finance

As the Deputy will be aware, the European Commission has, on 27 May, published revised proposals for the next Multiannual Financial Framework (MFF) to run from 2021-2027 to be supplemented by a proposed temporary European recovery instrument called “Next Generation EU”.

The total amount being proposed for the period 2021-2027 is €1.85 trillion in commitments (2018 prices) - €1.1 trillion for the MFF and €750 billion for “Next Generation EU”.

It is proposed that the “Next Generation EU” financing be raised by “temporarily” increasing the Own Resources ceiling to 2.00% of EU Gross National Income (GNI) allowing the Commission to borrow €750 billion on the financial markets to fund measures over the period 2021 - 2024. €500 billion of “Next Generation EU” financing will be in the form of grants to Member States, with the remaining €250 billion as loans.

The Commission proposes that the money raised for “Next Generation EU” be invested across three pillars:

1. Support to Member States with investments and reforms, including supporting Member States in accelerating the transition towards climate neutrality;

2. Kick-starting the EU economy by incentivising private investments; and

3. Addressing the lessons of the crisis with a new Health Programme, EU4Health, to strengthen health security and prepare for future health crises, and additional funding for external action, including humanitarian aid.

The Commission propose that the centre-piece of the recovery plan will be a new Recovery and Resilience Facility with a total fund of €560 billion (€310bn in grants and €250 billion in loans). The aim of the facility will be to support investment and reforms essential to a lasting recovery, to improve the economic and social resilience of Member States and to support the green and digital transitions. Support under this facility is to be focussed where the crisis impact and resilience needs are greatest. The Commission propose that this facility will be firmly embedded in the European Semester and that Member States will draw up national recovery and resilience plans as part of their National Reform Programmes. It is proposed these plans will set out investment and reform priorities and the related investment packages to be financed under the facility with support to be disbursed depending on progress made and on the basis of pre-defined benchmarks.

The Commission proposes that the “Next Generation EU” funding be channelled through EU Budget programmes, to be repaid back between 2028 and 2058 drawing on future EU Budget contributions from Member States or the Own Resources of the Union.

The Commission favours the introduction of new Own Resources to facilitate the repayment of the market finance raised and to help reduce the pressure on national budgets. They have indicated that they may propose additional new Own Resources (such as an extension of the Emissions Trading System based own resources to the maritime and aviation sectors, a carbon border adjustment mechanism, a single market levy and a digital tax) at a later stage of the 2021-2027 financial period.

Ireland has broadly welcomed publication of the Commission’s Post 2020 MFF proposals coming on top of the three safety nets of up to €540 billion already agreed by EU leaders to support citizens, businesses, and countries and the ECB measures to increase liquidity.

The Commission’s proposals are detailed and ambitious and are still being examined to assess the implications for Ireland’s priorities at an overall and sectoral level, for Ireland’s contributions to and receipts from the EU Budget, as well as for the domestic budget.

With regard to the Commission’s stated intentions’ to bring forward tax proposals for new Own Resources, the Deputy will have noted that the Commission have 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 Commission proposals for future new own resources 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.

Heads of State and Governments are expected to discuss the Commission’s MFF and “Next Generation EU” proposals at European Council on 19 June. There is considerable time pressure on the European Council to reach political agreement (requiring unanimity) on the revised package by July to facilitate negotiation with and consent from the European Parliament in time to ensure that the next MFF can come into operation from 1 January 2021.

EU Funding

Questions (46)

Michael McGrath

Question:

46. Deputy Michael McGrath asked the Minister for Finance the way in which the €750 billion stimulus proposal from the European Commission will be distributed among the member states; the amount Ireland is expected to receive both in monetary terms and as a percentage of GDP and GNI; the way in which this will be paid for by the European Union; if it will lead to Ireland's contribution to the EU increasing; if so, the amount both in monetary terms and as a percentage of GDP and GNI; and if he will make a statement on the matter. [10328/20]

Written answers

Minister for Finance

As the Deputy will be aware, the European Commission has, on 27 May, published revised proposals for the next Multiannual Financial Framework (MFF) to run from 2021-2027 to be supplemented by a proposed temporary European recovery instrument “Next Generation EU”.

The total amount being proposed for the period 2021-2027 is €1.85 trillion in commitments (2018 prices) - €1.1 trillion for the MFF and €750 billion for “Next Generation EU”.

It is proposed that the “Next Generation EU” financing, which is designed to help Member States recover from the economic effects of Covid 19, will be raised by “temporarily” increasing the Own Resources ceiling to 2.00% of EU Gross National Income (GNI) allowing the Commission to borrow €750 billion on the financial markets to fund measures over the period 2021 - 2024. €500 billion of “Next Generation EU” financing will be in the form of grants to Member States, with the remaining €250 billion as loans. This additional funding to be channelled through EU Budget programmes, will be repaid back between 2028 and 2058 drawing on future EU Budget contributions from Member States or the Own Resources of the Union.

The Commission favours the introduction of new Own Resources to facilitate the repayment of the market finance raised and to help reduce the pressure on national budgets. They have indicated that they may propose additional new Own Resources (such as an extension of the Emissions Trading System based own resources to the maritime and aviation sectors, a carbon border adjustment mechanism, a single market levy and a digital tax) at a later stage of the 2021-2027 financial period.

While much of the details have yet to be teased out, a staff working document from the Commission estimates that Ireland may potentially receive a total of up to €3 billion from grants and loans upfront under the recovery package from 2021 to 2024, potentially requiring contributions from Ireland over a thirty year period of €18.7 billion from 2028 to 2058. However, the Commission proposals are detailed and will require careful examination in consultation with relevant Government Departments to assess the implications for Ireland’s priorities at an overall and sectoral level and to assess the implications for Ireland’s contributions to and receipts from the EU Budget.

In terms of initial assessment of the “Next Generation EU” package, it is understood that Ireland’s allocation would be just under €2 billion in grants between 2021 and 2024 to include:

- €354 million in rural development – Green Deal, F2F, Biodiversity Strategy;

- €215 million from ReactEU (essentially Cohesion Programmes)

- €132 million from the Just Transition Fund;

- €1.209 billion from the new Recovery and Resilience - investments and reforms, including in relation to the green and digital transitions and the resilience of national economies.

Further receipts should be available to Ireland under competitively awarded programmes under the “Next Generation EU” package, but this is difficult to estimate at this point. Ireland should also be able to assess significant additional funds under the separate SURE Instrument and EIB Pandemic Guarantee Fund.

Heads of State and Governments are expected to discuss the Commission’s MFF and “Next Generation EU” proposals at European Council on 19 June. There is considerable time pressure on the European Council to reach political agreement (requiring unanimity) on the revised package to facilitate negotiation with and consent from the European Parliament in time to ensure that the next MFF can come into operation from 1 January 2021.

Tax Code

Questions (47)

Michael McGrath

Question:

47. Deputy Michael McGrath asked the Minister for Finance the progress of BEPS 2.0 in the OECD and the proposals for a minimum effective tax rate and for a digital tax at OECD level; and if he will make a statement on the matter. [10329/20]

Written answers

Minister for Finance

The Deputy is aware that OECD is currently undertaking a significant project to address the tax challenges of the digital economy, sometimes referred to as BEPS 2.0. A series of proposals have been developed under two Pillars – Pillar One and Pillar Two.

The work under ‘Pillar One’ focuses on the distribution of taxing rights in respect of highly digitalised activities and seeks to undertake a coherent review of the profit allocation and nexus rules used in the existing international tax framework. The work under 'Pillar Two' is examining the possibility of agreeing global rules on minimum effective taxation for corporate profits.

My consistent view is that a certain, stable, and globally agreed international tax framework is vital to facilitate cross border trade and investment. The tax challenges that have arisen from the digitalisation of the economy are global in nature and thus require global solutions. I believe it is important the OECD work is successful to provide certainty in the international tax framework into the future.

Discussions continue to progress, albeit remotely, but there remains some way to go both in terms of reaching agreement at the OECD and subsequently in implementing whatever eventually emerges from the OECD discussion. The current crisis has impacted the OECD's planned timelines, with key meetings moved out from July to October 2020. The OECD’s ambition to find political agreement before the end of 2020 remains in place although further technical and implementation work is likely to continue over a longer period.

What is achievable at the OECD may be ultimately be affected by the current crisis as countries assess the cost of COVID-19 to their economies. Ireland remains fully engaged in the talks at the OECD and will continue to contribute constructively to the work.

Value Added Tax

Questions (48, 77)

Michael McGrath

Question:

48. Deputy Michael McGrath asked the Minister for Finance further to Parliamentary Questions Nos. 104, 105 and 112 of 20 May 2020, if it is permissible under EU rules to zero rate VAT for medical equipment for dentists and shops which provide PPE freely to their employees; and if he will make a statement on the matter. [9655/20]

Michael McGrath

Question:

77. Deputy Michael McGrath asked the Minister for Finance if under existing EU rules and decisions, the zero rate of VAT can apply to businesses for as long as they are distributing personal protective equipment to their employees free of charge; and if he will make a statement on the matter. [10321/20]

Written answers

Minister for Finance

I propose to take Questions Nos. 48 and 77 together.

I outlined previously in my answer to Parliamentary Question Nos. 104, 105 and 112 of 20 May 2020 the VAT rate changes implemented by Revenue following the European Commission Decision C (2020)2146, adopted on 3 April 2020. These changes fully implemented the scope for zero rating imports of COVID-19 related goods permitted by the Decision and also implemented a corresponding temporary zero rating of similar, specified domestic supplies. Any further extension of zero rating to cover supplies of medical equipment and/or personal protection equipment to dentists and shop owners and indeed other sectors and businesses would require a change in legislation at EU level; the VAT Directive would not permit a legislative measure for the application of the zero rate of VAT to such supplies and there are no grounds in the Commission Decision that would support the adoption of such a measure, even on a temporary basis.

The Deputy will be aware that businesses such as shops which are registered for VAT and incur VAT in relation to goods which will be used for the purposes of the taxable business are entitled to reclaim the VAT incurred through their VAT return.

Wage Subsidy Scheme

Questions (49, 63, 73)

Thomas Pringle

Question:

49. Deputy Thomas Pringle asked the Minister for Finance if the temporary wage subsidy scheme for the tourism and transport sector will be continued into the medium- term; and if he will make a statement on the matter. [9685/20]

Paul McAuliffe

Question:

63. Deputy Paul McAuliffe asked the Minister for Finance his plans regarding the extension of the temporary wage subsidy scheme; and the way in which it will apply to different sectors. [10071/20]

Michael McGrath

Question:

73. Deputy Michael McGrath asked the Minister for Finance if the lower 0.5% employer PRSI rate will continue for as long as the temporary wage subsidy scheme is in place; if this will be extended beyond the duration of the scheme; and if he will make a statement on the matter. [10317/20]

Written answers

Minister for Finance

I propose to take Questions Nos. 49, 63 and 73 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 (The Act).

The underlying legislation and the TWSS itself were developed having regard to the Government objective of providing assistance to employers and employees, where businesses have been seriously affected by the Covid-19 pandemic and the restrictions which were introduced as a result. The scheme is available to eligible employers across all sectors, excluding the Public Service and Non-Commercial Semi-State Sector. This includes businesses that have closed due to the Covid-19 restrictions and those that continue to operate and employ their workforce. The sector to which Deputy Pringle refers is no different in this regard.

In relation to the future of the TWSS, I have always been clear that this support cannot last forever, but I am satisfied that the scheme should remain until the end of August. As the public health restrictions are eased in the coming weeks, I will expect to see a continued decline in reliance on the scheme throughout the summer as the economy continues to re-open and people are able to return to work. This economic recovery will be monitored and will inform a decision later in the summer on the need for further extension or tapering beyond August. Furthermore, I acknowledge that certain sectors will face particular challenges into the future as we gradually re-open our economy, and this is one of many factors that will inform future decisions.

Fuel Rebate Scheme

Questions (50)

Thomas Pringle

Question:

50. Deputy Thomas Pringle asked the Minister for Finance if the restoration of the fuel rebate will be considered for the transport sector in view of the collapse in the tourism and transport sector; and if he will make a statement on the matter. [9687/20]

Written answers

Minister for Finance

If the Deputy is referring to the Diesel Rebate Scheme for hauliers and bus operators, this scheme has been continuously in operation since 1 July 2013 and therefore the question of its restoration does not arise.

Value Added Tax

Questions (51)

Thomas Pringle

Question:

51. Deputy Thomas Pringle asked the Minister for Finance if the reclassification of VAT status will be considered for the transport sector to harmonise the VAT system on the island of Ireland; and if he will make a statement on the matter. [9688/20]

Written answers

Minister for Finance

I am advised by Revenue that the VAT rating of goods and services is subject to EU VAT law, with which Irish VAT law must comply. In general, the VAT Directive provides that all goods and services are liable to VAT at the standard rate, currently 23% in Ireland, unless they fall within categories of goods and services specified in the Directive, in respect of which Member States may apply a lower rate or exemption from VAT. In addition, the Directive allows for historic VAT treatment to be maintained under certain conditions and Ireland has retained the application of VAT exemption to the transport of passengers and their accompanying baggage. This means that the supplier does not register for VAT, does not charge VAT on the supply of their services and has no VAT recovery entitlement on costs where such costs are used for the exempt supply of passenger transport.

Ireland may continue to apply the VAT exemption on the supply of domestic passenger transport as governed by Article 371 of the VAT Directive; however, it cannot change the conditions under which the exemption was granted. In accordance with the Directive a reduced rate of VAT (Ireland currently has two reduced VAT rates 9% and 13.5%) could be introduced to the supply of passenger transport in place of the exemption that currently applies; this would give the transport operator deductibility in relation to VAT on their business inputs but would involve charging passengers VAT on their fares. Under the Directive it is not possible to apply the zero rate in Ireland to these services, as their supply was never zero rated in the past.

In the UK, where these services were previously zero rated, the zero rate of VAT continues to apply to the supply of passenger transport, except for a taxi service which is standard rated, and suppliers established in the UK have an entitlement to deductibility on the costs relating to the supply of these services where the place of supply is the UK.

I would point out that there are reliefs from VAT available to passenger transport operators, whose businesses are established in this State, as follows:

- the Value Added Tax (Refund of Tax) (Touring Coaches) Order of 2012 provides for a refund of VAT on the cost of acquiring “qualifying vehicles” used for the carriage of tourists under contracts for group transport; and

- provisions within Section 59 of the VAT Consolidation Act 2010, which allow a person established in this State to claim deductibility in respect of input costs incurred in relation to the transport of passengers outside this State.

Tax Yield

Questions (52)

Niall Collins

Question:

52. Deputy Niall Collins asked the Minister for Finance the amount of tax deducted from wagering at bookmaker offices here on greyhound and horse racing in 2019; and the estimated loss of revenue from this source in 2020 arising from the closure of horse and greyhound racetracks due to Covid-19. [9701/20]

Written answers

Minister for Finance

I am advised by Revenue that the 2019 receipts from Traditional Betting (in store), Remote Betting (online) and Betting Intermediary Duty on Commissions are shown in the following table.

	Traditional Betting	Remote Betting	Betting Intermediary Commissions	Total
	€m	€m	€m	€m
2019	51.9	40.6	2.5	95.0

A breakdown by type of wager (greyhound racing, horse racing, etc.) is not available as this type of information is not included in Betting Duty returns. While records of the full particulars of bets must be kept by bookmakers for inspection, they are not required to include the details of the different types of sporting or other events which give rise to the liability to Betting Duty on their return to Revenue.

The Betting Duty forecast for 2020 has been revised downwards to €60 million due to COVID-19, which is €35 million lower than the receipts in 2019.

Wage Subsidy Scheme

Questions (53)

Michael McGrath

Question:

53. Deputy Michael McGrath asked the Minister for Finance the estimated amount of tax to be received from employees in receipt of the temporary wage subsidy scheme; the way in which the amount of tax due will be worked out in practice; the way in which this will be paid in practice; if it is through the deduction of credits in 2021, if that will result in higher taxes being paid in 2021; and if he will make a statement on the matter. [9756/20]

Written answers

Minister for Finance

I am advised by Revenue that payments made to employees under the Temporary Wage Subsidy Scheme (TWSS) are liable to Income Tax and the Universal Social Charge (USC). However, in keeping with the Government’s objective of getting much needed assistance to employees during the period of the crisis, the subsidy payments are not taxable in real-time through the PAYE system. Instead, employees will be liable to tax and USC on the subsidy amount paid to them by way of review at the end of the year.

It is not possible for Revenue to quantify the likely amount of tax to be received from employees arising from the TWSS payments at this point in the year. This will require assessment at year end of those who benefitted from the scheme, including their length of time on the scheme, the amounts of subsidy received, and any other income earned over the course of 2020.

When an end of the year tax review takes place, it may be the case that an employee’s unused tax credits will cover any further liability that arises. Where this is not the case, Revenue has informed me that it is normal practice to collect any tax and USC owing in manageable amounts by reducing an individual’s tax credits for a future year(s) in order to minimise any potential financial hardship. Additionally, if an individual has any additional tax credits to claim, for example health expenses, this may also reduce any tax owing.

Revenue has assured me that it will adopt a fair and reasonable approach to the collection of any tax owed arising from the TWSS, having regard to the financial circumstances of the persons concerned.

Wage Subsidy Scheme

Questions (54, 59, 67, 78)

Michael McGrath

Question:

54. Deputy Michael McGrath asked the Minister for Finance further to Parliamentary Question No. 120 of 20 May 2020, the status of the issue regarding women returning from maternity leave being excluded from the temporary wage subsidy scheme; if the matter requires primary legislation in order to be rectified; and if he will make a statement on the matter. [9788/20]

Danny Healy-Rae

Question:

59. Deputy Danny Healy-Rae asked the Minister for Finance his plans to ensure that the necessary changes are made to the temporary wage subsidy scheme to ensure that women that have been on maternity leave can avail of the scheme; and if he will make a statement on the matter. [9910/20]

Mary Lou McDonald

Question:

67. Deputy Mary Lou McDonald asked the Minister for Finance when the change to the temporary wage subsidy scheme will come into effect to accommodate the salaries of those that have returned to work after a period of maternity or adoptive leave and that may not have been on the payroll of their employer on 29 February 2020 or paid in either January or February 2020. [10245/20]

Michael McGrath

Question:

78. Deputy Michael McGrath asked the Minister for Finance when the fix to the temporary wage subsidy scheme enabling mothers on maternity leave to apply to the scheme will be operational; and if he will make a statement on the matter. [10322/20]

Written answers

Minister for Finance

I propose to take Questions Nos. 54, 59, 67 and 78 together.

The Temporary Wage Subsidy Scheme (TWSS) is one of a number of significant measures that have been introduced since the beginning of March to attempt to minimise the negative impact on the labour market through an exceptional period, where at least one million workers are now relying on some form of State support.

The aim of the scheme is to maximise staff retention and firm viability by maintaining the link between the employer and employee. As of 8 June 2020, over 59,000 employers have registered with Revenue for the TWSS, over 520,900 employees have received at least one payment under the scheme and the cumulative value of payments made to employers is €1.43 billion.

On 29 May, I announced an important change to the TWSS to deal with the issue of those returning from maternity or adoptive leave which was raised by various parties and interest groups.

Officials had been looking at how it might be possible to address the issue in a way that ensures consistent treatment with other employees who were on the payroll in January and February, whose salaries were taken into account in determining TWSS payments for employers.

Following Government approval, a change to the TWSS will be made as an exceptional measure to accommodate the salaries of those who have returned to work after a period of maternity or adoptive leave who consequentially were not on the payroll during the relevant period.

The amendment will be legislated for later in the year as part of the usual Finance Bill 2020 process but in the interim, Revenue has agreed that this provision will be operational from 12 June and that the subsidy will be backdated, where applicable, to the later of either the date of recommencement of employment or 26 March 2020.

I am satisfied that this change addresses the matter raised and ensures appropriate operation of the TWSS in recognition of the unique circumstances applying to those returning to work after a period of maternity or adoptive leave by allowing for commensurate treatment with other employees who were on the payroll on 29 February.

Further details of how the measure will operate have now been published by Revenue, and I would highlight that the manual process being adopted will require input from employers so I would encourage them to contact Revenue to allow for payments to be processed as quickly as possible.

Covid-19 Pandemic Supports

Questions (55)

Fergus O'Dowd

Question:

55. Deputy Fergus O'Dowd asked the Minister for Finance further to Parliamentary Question No. 863 of 27 May 2020, if a reply will issue to correspondence from a person (details supplied); and if he will make a statement on the matter. [9814/20]

Written answers

Minister for Finance

I refer the Deputy to the reply given by the Minister for Children and Youth Affairs in relation to childcare for heath care workers on the 27 May last.

The Temporary Wage Supplement Scheme was developed with the objective of getting much needed financial assistance to employers and employees as well as supporting the maintenance of the link between employers and their employees. The scheme is one of universal application across all the sectors of the economy and it would not be possible for it to be adapted to meet the particular circumstances as outlined in the details supplied.

Question No. 56 answered with Question No. 40.

Tax Data

Questions (57)

Noel Grealish

Question:

57. Deputy Noel Grealish asked the Minister for Finance the cost in income tax foregone of income tax relief granted in 2019 on superannuation contributions, excluding the additional superannuation contribution paid by public service employees to public service and statutory occupational pension schemes in that year; the cost in income tax foregone of income tax relief granted in 2019 under section 790CA Taxes Consolidation Act 1997 on additional superannuation contributions paid by public service employees in that year; and if he will make a statement on the matter. [9890/20]

Written answers

Minister for Finance

I am informed by Revenue that the cost of Income Tax relief granted on superannuation contributions can be found in the ‘Cost of Tax Expenditures’ publication, which is available on the Revenue website at link; www.revenue.ie/en/corporate/information-about-revenue/statistics/tax-expenditures/costs-expenditures.aspx.

The relevant information is available under the heading ‘Employees' Contributions to Approved Superannuation Schemes’.

The latest available data are for 2017, with the 2018 data due for publication in the coming months. The relevant tax returns for 2019 are not due to be filed until late 2020.

It is not possible to exclude the costs relating to public service employees from this information as public sector employers are not separately categorised in Revenue data.

Mortgage Lending

Questions (58)

Steven Matthews

Question:

58. Deputy Steven Matthews asked the Minister for Finance if his attention has been drawn to cases in which mortgage customers that had received mortgage approval in principal from a bank prior to the Covid-19 crisis have now had their application rejected with the stated reason being that the applicants are in receipt of the temporary wage subsidy scheme; and if he will make a statement on the matter. [9893/20]

Written answers

Minister for Finance

The 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 a 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.

Question No. 59 answered with Question No. 54.

Cycle to Work Scheme

Questions (60)

Catherine Murphy

Question:

60. Deputy Catherine Murphy asked the Minister for Finance the number of persons that availed of and the costs incurred by his Department regarding the cycle to work scheme since it was introduced to date by year and cost in tabular form; and if he will make a statement on the matter. [9983/20]

Written answers

Minister for Finance

The Cycle To Work scheme came into operation on 1 January 2009. The scheme operates on a self-administration basis and relief is automatically available provided the employer is satisfied that the conditions of their particular scheme meet the requirements of the legislation. There is no notification procedure for employers involved. This approach was taken with the deliberate intention of keeping the scheme simple and reducing administration on the part of employers.

There are no discernible costs in administering the cycle to work scheme. The bicycles and equipment are paid for by way of salary sacrifice by those acquiring the bicycles.

The following figures are for the Department of Finance and the Department of Public Expenditure and Reform.

Cycle to Work Applications per Year

Year	DFIN	DPER	OGP	Shared Services
2009	21	-	-	-
2010	31	-	-	-
2011	15	2	-	-
2012	16	9	-	-
2013	12	19	-	1
2014	15	10	1	10
2015	18	20	5	24
2016	10	15	9	27
2017	18	21	11	22
2018	15	18	5	17
2019	15	19	7	43
2020	1	5	2	7
Totals	187	138	40	151