Seán Sherlock
Question:59. Deputy Sean Sherlock asked the Minister for Finance if the help-to-buy scheme will be extended to second-time buyers. [13304/20]
View answerHelp-To-Buy Scheme
Questions (59)
Written answers
The definition of first time buyer in the Help to Buy scheme (HTB) is as follows:
'first-time purchaser' means an individual who, at the time of a claim under subsection (3) has not, either individually or jointly with any other person, previously purchased or previously built, directly or indirectly, on his or her own behalf a dwelling;
The intention is to target HTB at those who have not had the opportunity to build up equity in another property which could be used to purchase the second or subsequent property. I do not propose amending or removing the first-time buyer requirement in HTB.
Insurance Industry
Questions (60)
Aindrias Moynihan
Question:60. Deputy Aindrias Moynihan asked the Minister for Finance the progress being made by insurance companies on car insurance premium refunds due to the Covid-19 pandemic; if he is satisfied with the response from insurance companies to date; and if he will make a statement on the matter. [13352/20]
View answerWritten answers
These are extraordinary times, and I believe that all sectors must play their role in ensuring that we, as a country, get through them. In view of this, I and my officials have been engaging with the insurance industry through Insurance Ireland in regards to forbearance measures particularly for business customers. In addition, the Deputy will be aware that at a meeting on 17 April with Insurance Ireland, I called on insurers to be pro-active and generous in relation to their treatment of motor insurance customers during this period. In this regard, I pointed out that a combination of the very profitable part of this market over the last 12 months and what is likely to be a significant reduction in claims for this period due to the travel restrictions that are in place, provided a strong case for premium refunds, thus providing some financial relief to their customers.
On 24 April, Insurance Ireland announced that a number of their members (Allianz, AXA, FBD, RSA and Zurich) had signed up to commitments on premium reliefs for motor customers. In addition, Liberty Insurance wrote to me directly informing me of discounts that they would apply to their customers. It is important to note that each insurer has a different mix of customers and different claims experience and that the financial supports, such as refunds or discounts, applied by each insurance company will reflect their own individual claims experience to date.
In regard to the response by the insurance industry to date, Insurance Ireland wrote to me on 25 May in respect of this and other commitments made by the insurance sector. In relation to motor insurance refunds, they outlined that six general insurance companies had, in May 2020, announced refunds in premiums to Irish motor insurance customers totalling €54.5 million. I welcome the announcements as they are a step in the right direction.
I am aware that some have expressed disappointment over the level and manner of refunds and/or discounts. In this regard, it would appear that insurers have applied a flat rate across all policyholders rather than looking at the situation in a more granular fashion. For instance, a strong case can be made that those who have been cocooning deserved a larger refund, due to their cars being off the road altogether. However, the methodology of the premium relief process is a matter outside of my control and it is important to note that each insurance company will make their own decisions as to the level and manner of financial supports, including whether to issue refunds and/or discounts based on their own particular circumstances.
Finally, I would also stress the need for other insurers operating in the Irish motor insurance market who have not yet made such premium relief announcements to do so, as there is a need by all players in the market to take a longer-term perspective in relation to their customers. I believe customers will remember and favour those companies in the future that have made steps towards meeting their needs at this difficult time.
Value Added Tax
Questions (61, 77)
Fergus O'Dowd
Question:61. Deputy Fergus O'Dowd asked the Minister for Finance further to Parliamentary Question Nos. 89, 91, 107, 131 and 142 of 16 June 2020, if he will consider reducing the VAT on yoga services to the permissible 12% under the requirements of the EU VAT directive in order to assist yoga studios nationwide post-Covid-19; and if he will make a statement on the matter. [13355/20]
View answer
Richard Boyd Barrett
Question:77. Deputy Richard Boyd Barrett asked the Minister for Finance the reason gyms are paying a 9% VAT rate while yoga studios pay a 13.5% rate; the supports he will put in place to help yoga studios reopen in view of the reduction in class sizes that will be necessary to maintain physical distancing; and if he will make a statement on the matter. [13644/20]
View answerWritten answers
I propose to take Questions Nos. 61 and 77 together.
The VAT rating of goods and services is subject to the requirements of the EU VAT Directive, with which Irish VAT law must comply. Under the Directive, Ireland can and does apply a reduced rate of VAT, currently 13.5%, to supplies by yoga studios. The Directive does not permit the application of a rate below 12% to the supply of such services. Ireland has a second reduced rate of 9% and a further reduced rate is not permitted under the Directive. Therefore, while it is permissible to reduce the rate of VAT on yoga services from 13.5% to 12%, this could only be done if either the 13.5% or 9% rate was discontinued.
Gym membership fees are considered to be the right of admission to facilities for taking part in sporting or physical education activities. The Directive permits the application of a rate of not less than 5% for such services, and accordingly the second reduced rate of VAT, currently 9%, has been applied to gym membership fees. Where separate charges apply in respect of training classes, for example aerobic classes supplied in a gym, these charges are liable at the reduced rate of VAT, currently 13.5%.
Yoga studios may be eligible for financial support under the Temporary Wage Subsidy Scheme (TWSS). That scheme was legislated for in section 28 of the Emergency Measures in the Public Interest (Covid-19) Act 2020, an emergency measure to deal with the impact of the Covid-19 pandemic on the economy. Detailed information is available on the Revenue website in relation to this scheme.
Insurance Industry
Questions (62)
Emer Higgins
Question:62. Deputy Emer Higgins asked the Minister for Finance further to Parliamentary Question No. 45 of 3 June 2020, if a company (details supplied) is in breach of the voluntary agreement by increasing the premium for a business; and if he will make a statement on the matter. [13364/20]
View answerWritten answers
As outlined in my previous reply to the Deputy on this issue, I am aware that there have been many concerns expressed about how the insurance industry is responding to the needs of its business policyholders in these difficult times. However I am not in a position to adjudicate as it is very much a matter for the insurer based on the merits and specifics of each case.
For instance, on a general level, my understanding is that insurers will use a combination of rating factors in making their individual decisions on whether to offer cover and what terms to apply. For example, in relation to commercial vehicle insurance, factors may include those such as the age and type of vehicle, how and where it is used, the claims record, the number of drivers, and the storage and use of the vehicle. Insurers also price in accordance with their own past claims experience, and do not all use the same combination of rating factors, so as a result prices vary across the market. While I cannot comment on the specific case referenced in the details supplied, a number of these factors may be influencing the reasons why the terms may change upon renewal. As I have consistently stated, it is my view that it is important for consumers to shop around on their insurance policies in order to achieve a lower price where possible.
As the Deputy notes in her question, the forbearance agreement entered into by the relevant insurers is voluntary. As a result, neither I, nor the Central Bank, can enforce any of its provisions nor adjudicate on elements of it. Nonetheless, I expect insurers to act in line with the principles of the agreement. Furthermore, as the Deputy will be aware, I asked Insurance Ireland to put in place a mechanism which provides proof of delivery. My Department received the first “Activity Report” on this issue from Insurance Ireland on 25 May. This Report shows that in the period 23 March to 4 May, Insurance Ireland members processed 4,093 forbearance requests for business customers worth a total of €5,242,349. My officials have sought more detailed information from Insurance Ireland on the nature of the forbearance being offered, as I want to be certain that they are adhering to the spirit of the commitment they entered into. It should also be noted that my Department is in regular touch with the Alliance for Insurance Reform on these matters.
Finally, I would note that if a consumer has a problem with the service provided by their insurance provider, it is advisable that that they make a complaint to the firm's internal complaint resolution process. The Consumer Protection Code requires that if after 40 days the complaint has not been resolved to the customer’s satisfaction, the regulated entity must inform the consumer that they may refer their complaint to the Financial Services and Pensions Ombudsman (FSPO). The FSPO is a statutory official who acts as an independent arbiter of disputes which consumers may have with their insurance company or other financial service provider. The FSPO can be contacted either by email at info@fspo.ie or by telephone at 01-567-7000.
Covid-19 Pandemic Supports
Questions (63)
David Cullinane
Question:63. Deputy David Cullinane asked the Minister for Finance if his attention has been drawn to the fact that the calculation of average net weekly pay for the purposes of the temporary wage subsidy scheme may cause an underpayment to some persons that are usually paid monthly (details supplied); if adjustments are planned to rectify the underpayment; and if he will make a statement on the matter. [13365/20]
View answerWritten answers
The Temporary Wage Subsidy Scheme (TWSS) is an emergency measure to deal with the impact of the Covid-19 pandemic on the economy. Of necessity, the underlying legislation and the scheme itself were developed quickly, having regard to the objective of getting assistance to employers and employees, where businesses have been seriously affected by the pandemic.
The amount of subsidy payable to eligible employees is based on their ‘average revenue net weekly pay’ (ARNWP) for January and February 2020, as returned by the employer to Revenue through the real-time PAYE system. The ARNWP calculation is based on the number of insurable weeks within the January/February period rather than the pay frequency used as this is a more accurate and consistent method across all types of employees.
Revenue advise me that, for example, an employer payroll submission for an employee who is monthly paid and works for the full month of January 2020 includes a pay frequency of ‘monthly’ with ‘five insurable weeks’, while another employee who is also monthly paid and starts work with the employer on 20 January includes a pay frequency of ‘monthly’ with ‘two insurable weeks’. To correctly calculate the ARNWP for both employees, the use of insurable weeks rather than pay frequency is necessary. Using a pay frequency-based calculation on the second employee would be incorrect as the payment reported is in respect of two weeks work rather than a full month.
Revenue further advise me that, in the example referenced by the Deputy, there is no underpayment of subsidy. If the employee was paid for two full months in January and February 2020, then there are nine insurable weeks reported on the payroll and the ARNWP is correctly calculated by dividing the total net pay figure by nine.
Pension Provisions
Questions (64)
Seán Haughey
Question:64. Deputy Seán Haughey asked the Minister for Finance if consideration will be given to allowing the unlocking of private pension funds for the duration of the Covid-19 pandemic in the case of unemployed PAYE taxpayers; if tax would have to be paid on such funds; and if he will make a statement on the matter. [13384/20]
View answerWritten answers
In relation to the Deputy’s proposal to allow people access a portion of their pension fund before retirement, the long established policy of providing tax relief for pension contributions is to encourage saving by employers, employees and the self-employed towards their retirement income. A repayment of contributions is only permitted in highly limited circumstances, for example due to ill-health, and as such, this would be subject to income tax.
The policy rationale underpinning this is that the State provides generous tax relief on both pension contributions and fund growth to ensure that people have sufficient savings to fund their regular costs and expenses during their retirement. However, on actual drawdown a pension is subject to tax at the individual’s marginal tax rate. In the event of any early encashment of a pension fund the tax relief received must be clawed back. It should also be noted that any refund of pension contributions is governed by the terms of the specific scheme or product.
As is the case with all matters of policy, while they are monitored on a continuous basis, I do not have any plan at this time to revise these pension arrangements.
It is important to point out that a very significant and comprehensive package of measures has already been put in place to assist those who have suffered a loss of income arising from the COVID-19 crisis. This includes the Temporary Wage Subsidy Scheme (TWSS), the Pandemic Unemployment Payment and bank-related forbearance measures.
I am advised by Revenue that, as of 25 June 2020, over 552,200 employees had received a subsidy since the start of the Temporary Wage Subsidy Scheme (TWSS), 247,300 employees had received a subsidy in the previous week and an estimated 405,000 employees were being supported by the scheme having received a subsidy in their most recent pay period.
Revenue further advises that it regularly publishes statistics in relation to the TWSS. The most recent update can be found at the following link:
https://www.revenue.ie/en/corporate/documents/statistics/registrations/wage-subsidy-scheme-statistics-25-june-2020.pdf
Data from the Department of Employment Affairs & Social Protection showed there were 465,900 people in receipt of a Pandemic Unemployment Payment on 22 June 2020. A total of 693,800 people had received at least one payment since the scheme started. The data are available at the link:
https://www.gov.ie/pdf/?file=https://assets.gov.ie/77508/12053c11-e227-4a26-af6d-355c5f240b17.pdf#page=null
Wealth Audit
Questions (65, 66, 67)
Cian O'Callaghan
Question:65. Deputy Cian O'Callaghan asked the Minister for Finance the current mean and median household income; and if he will make a statement on the matter. [13396/20]
View answerCian O'Callaghan
Question:66. Deputy Cian O'Callaghan asked the Minister for Finance the percentage of households that have higher incomes and assets compared to 2005; and if he will make a statement on the matter. [13397/20]
View answerCian O'Callaghan
Question:67. Deputy Cian O'Callaghan asked the Minister for Finance the rates of relative and absolute poverty; the rates of relative and absolute poverty in 2005, 2010 and 2015, respectively; and if he will make a statement on the matter. [13398/20]
View answerWritten answers
I propose to take Questions Nos. 65 to 67, inclusive, together.
My Department monitors trends in household income on an ongoing basis. Information in respect of these trends is captured in the annual Survey on Income and Living Conditions (SILC) produced by the Central Statistics Office (CSO). The most recent 2018 SILC data indicates that the median household disposable income was €42,183, while the mean household disposable income was €50,640.
In response to the Deputy’s query concerning the percentage of households that have higher incomes and assets compared to 2005, I am advised by the CSO that SILC data cannot precisely identify the income of the same cohort of households as in 2005. I am further advised by the CSO that information on asset holdings contained in the Household Finance and Consumption Survey (HFCF) does not pre-date 2013. Therefore it is not possible to identify the assets held by households in 2005 and compare those to household assets held in 2018.
With regards to the poverty indicators that the Deputy has requested, these are also available through the published SILC data. SILC produces three metrics for measuring poverty. Those ‘at risk’ of poverty, are identified as those living below 60% of median equivalised disposable income. In this instance, the equivalised disposable income refers to the total disposable income of each household divided by the equivalised household size. This may also be referred to as relative poverty.
On the other hand, the measurement for ‘enforced deprivation’ refers to households that are considered to be deprived because they cannot afford two or more of the eleven goods and services which are considered to be the norm for other people in society. This is a measurement for absolute poverty.
Furthermore, the ‘consistent poverty’ rate measures those who are both ‘at risk’ of poverty and experiencing ‘enforced deprivation'. The data for 2005, 2010, and 2015 as requested are provided in the table below. The ‘at risk’ of poverty rate and the ‘consistent poverty’ rate both declined from 2005 to 2010, while the ‘deprivation rate’ increased in that time period. The impact of the economic crisis is evident in the rise in all three metrics between 2010 and 2015.
Table - Income and Poverty Rates, statistical indicator and Year
|
Year |
2005 |
2010 |
2015 |
|
At Risk of Poverty Rate (%) |
18.3 |
14.7 |
16.3 |
|
Deprivation Rate (%) |
14.8 |
22.6 |
25.4 |
|
Consistent Poverty Rate (%) |
7 |
6.3 |
8.5 |
Source: CSO SILC data various years.
Mortgage Lending
Questions (68)
Alan Dillon
Question:68. Deputy Alan Dillon asked the Minister for Finance the way in which he and major financial institutions are accommodating those in receipt of the temporary wage subsidy scheme with mortgage applications (details supplied); and the measures being taken by the Central Bank to ensure that financial institutions are acting in the best interests of customers during the Covid-19 pandemic. [13472/20]
View answerWritten answers
The Central Bank has advised 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, and my Department maintains close contact with the Central Bank and Banking & Payments Federation Ireland (BPFI) as the lending industry works to address the difficulties arising from the COVID-19 situation.
Lenders continue to process mortgage applications and have supports in place to assist customers impacted by COVID-19. The 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.
Within the parameters of the regulatory framework, as set out below and as acknowledged by the Deputy, the decision to grant or refuse an individual application for mortgage credit, or temporarily suspend a mortgage approval in principle, is a commercial decision to be made by the regulated entity. Accordingly, it is not possible for me to instruct lenders in that regard.
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 and 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. The CMCAR further provides 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. 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.
Question No. 69 answered with Question No. 26.
Mortgage Lending
Questions (70)
Frank Feighan
Question:70. Deputy Frankie Feighan asked the Minister for Finance his views on the practice of banks during Covid-19 to halt the drawdown process of mortgages for applicants whose companies are in receipt of the temporary wage subsidy scheme; and if he will make a statement on the matter. [13524/20]
View answerWritten answers
The Central Bank has advised 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, and my Department maintains close contact with the Central Bank and Banking & Payments Federation Ireland (BPFI) as the lending industry works to address the difficulties arising from the COVID-19 situation.
Lenders continue to process mortgage applications and have supports in place to assist customers impacted by COVID-19. The 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.
Within the parameters of the regulatory framework, as set out below, the decision to grant or refuse an individual application for mortgage credit, or temporarily suspend a mortgage approval in principle, is a commercial decision to be made by the regulated entity. Accordingly, it is not appropriate or possible for me to instruct lenders in that regard.
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 and 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. The CMCAR further provides 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. 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.
Question No. 71 answered with Question No. 56.
Tax Reliefs
Questions (72)
Patricia Ryan
Question:72. Deputy Patricia Ryan asked the Minister for Finance if he will reintroduce tax relief on trade union subscriptions; and if he will make a statement on the matter. [13535/20]
View answerWritten answers
A review of the appropriate treatment for tax purposes of trade union subscriptions and professional body fees was carried out by my Department in 2016, and included in the 2016 report on tax expenditures published on Budget day 2016.
http://www.budget.gov.ie/Budgets/2017/Documents/Tax_Expenditures_Report%202016_final.pdf
The review concluded that:
"...analysis of the scheme using the principles laid down by the Department’s Tax Expenditure Guidelines shows that it fails to reach the evaluation threshold to warrant introduction in this manner.
The reinstatement of this tax relief would have no justifiable policy rationale and does not express a defined policy objective. Given that individuals join trade unions largely for the well-known benefits of membership, and the potential value of the relief to an individual would equate to just over €1 per week, this scheme would have little to no incentive effect on the numbers choosing to join. There is no specific market failure that needs to be addressed by such a scheme, and it would consist largely of deadweight."
This issue was discussed during the Committee Stage of the Finance Bill 2019 in Dáil Éireann. Given that the previous examination of the matter was undertaken in 2016, during the course of the debate I undertook to have my officials carry out an updated review into the specific issue of tax relief, acknowledging stakeholder viewpoints and taking into account international practice in the area. I understand that the relevant work is at an advanced stage at present.
Departmental Staff
Questions (73)
Jennifer Whitmore
Question:73. Deputy Jennifer Whitmore asked the Minister for Finance if his Department has established a working from home policy for its employees; and if he will make a statement on the matter. [13548/20]
View answerWritten answers
I wish to advise the Deputy, that on 23rd March 2020 my Department issued an interim working from home policy document to staff to address health and safety issues in light of the COVID-19 pandemic. In addition the Department has to date issued seven (7) Health and Wellness bulletins publication to staff to assist and advise on best practices when working from home and guidance relating to continued engagement with the Department and fellow colleagues. Areas covered in the bulletins included guidance in relation to ergonomics set up and related exercises staff members can undertake, also included were references and guidance to the eight (8) Dimensions of Wellness and the five (5) ways of wellbeing for Mental Health so as ensure staff the continued wellness and positive mental health of staff of the Department. On an ongoing basis, staff of the Department are provided with information and contact details for the confidential service provided by the Civil Service Employee Assistance Service, further details are available at https://www.cseas.per.gov.ie/.
The Department of Public Expenditure and Reform has developed guidelines for civil service organisations (Working from Home during COVID-19 – Guidance for Civil Service Organisations), which is intended to assist civil service organisations as long as necessary to address the health and safety risks of COVID-19. These guidelines are due to issue shortly.
I also wish to advise the Deputy that the Department of Public Expenditure and Reform has commenced work on the development of a remote working policy which will address remote working in the longer term for the civil service.
Mortgage Lending
Questions (74)
Jennifer Whitmore
Question:74. Deputy Jennifer Whitmore asked the Minister for Finance if loan-to-value, LTV, exemptions have been stopped since Covid-19; the representations he has made to the banking sector on behalf of homeowners that cannot borrow due to banks no longer issuing LTV exemptions in circumstances in which a 20% deposit is not achievable particularly for those in negative equity; and if he will make a statement on the matter. [13565/20]
View answerWritten answers
The Central Bank has statutory responsibility for the regulation of mortgage lending by banks and other regulated entities and, in line with its independent mandate to preserve and protect financial stability in Ireland, it introduced macro-prudential measures for residential mortgage lending by such institutions in February 2015. The objective of these mortgage measures is to increase the resilience of the banking sector and households to reduce the risk of credit-house price spirals from developing.
These macro-prudential measures apply certain loan-to-value (LTV) and loan-to-income (LTI) restrictions to residential mortgage lending by financial institutions regulated by the Central Bank. The current restrictions, which have not changed since the impact of Covid-19, comprise an LTI limit of 3.5 times the borrower’s income; in respect of the LTV limit, for first time primary dwelling borrowers it is 90% of the value of the residential property and 80% for second and subsequent buyers (for buy to let mortgage borrowers the LTV limit is 70%).
However, the macro-prudential mortgage lending framework also provides a certain allowance or discretion to lender to exceed these LTI and LTV limits. For example, in any one calendar year, lenders can give an LTV allowance to:
- Up to 5% of the value of mortgages to first time primary dwelling buyers
- Up to 20% of the value of mortgages to second and subsequent primary dwelling buyers
- Up to 10% of the value of mortgages to buy-to-let buyers.
In addition, the mortgage lending measures provide that borrowers who are currently in negative equity and want to move home by purchasing another property are exempt from the LTV limits.
However, the utilisation and allocation of these exemption allowances is solely a matter for individual lenders, having regard to the lender’s own credit policies and based on an evaluation of each specific borrower. Therefore, subject to compliance with this macro prudential residential mortgage lending framework, and also to compliance with all the other relevant legal and regulatory requirements governing the provision of mortgage credit to consumers including the relevant provisions of the European Union (Consumer Mortgage Credit Agreements) Regulations 2016 and the Central Bank’s Consumer Protection Code 2012 ‘Knowing the Consumer and Suitability’ obligations, it remains a matter for each mortgage lender to set its own mortgage lending policies and to make its own mortgage lending decisions in individual cases and it is not appropriate or possible for me to instruct lenders in that regard. Nevertheless, it should also be noted that the Central Bank has 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. In addition, my Department maintains close contact with the Central Bank and Banking & Payments Federation Ireland as the lending industry works to address the difficulties the COVID-19 situation is causing for both borrowers and lenders.
Wage Subsidy Scheme
Questions (75)
Gary Gannon
Question:75. Deputy Gary Gannon asked the Minister for Finance if a temporary wage subsidy scheme application by a person (details supplied) will be re-examined due to an error. [13624/20]
View answerWritten answers
The Temporary Wage Subsidy Scheme (TWSS) is a fully automated solution that is dependent on timely payroll data being provided by employers to Revenue through the real-time PAYE reporting system in accordance with legislative obligations. The system specifically requires that eligible employees were on the employer payroll on 29 February 2020 and that the employer reported the February payroll to Revenue before 15 March 2020. The 15 March 2020 deadline was recently extended to ‘before’ 1 April 2020 by Revenue under its care and management provisions. Where an employer fails to meet these statutory reporting obligations within the required timelines, it is not possible for the TWSS system to generate any subsidy payment.
Revenue has advised me that the difficulties encountered by the company in question in accessing the TWSS arose because it failed to file its February payroll submission until after the extended concessionary deadline (‘before’ 1 April 2020). Revenue further advised me that the company also failed to file payroll submissions on time on a number of occasions since the real-time PAYE system commenced operations on 1 January 2019. The late filing of the February payroll submission prevented the TWSS system from calculating any subsidy on behalf of the company’s only employee and it is not possible for Revenue to design a technical solution that could provide access in circumstances where an employer has not adhered to the statutory requirements.
Insurance Coverage
Questions (76)
Éamon Ó Cuív
Question:76. Deputy Éamon Ó Cuív asked the Minister for Finance the discussions he has had with the insurance industry in relation to the refusal by insurance companies to honour business interruption policies in insurance policies in circumstances in which insurance includes cover for infectious diseases; the result of these discussions; and if he will make a statement on the matter. [13629/20]
View answerWritten answers
I am aware that there have been many concerns expressed about how the insurance industry is responding to the needs of its business policyholders in these difficult times, in terms of honouring business interruption claims and with regard to whether forbearance and other flexible measures are being offered to them. I have considerable sympathy for such policyholders.
Whilst I have no legal authority to compel an insurer to pay a claim as this forms part of a contract between the insurer and the policyholder, I believe that as a general rule insurers should not attempt to reject claims on the basis of interpreting policies to their own advantage. I believe that they should engage with those businesses honestly, fairly and professionally to honour those elements of the policies covered, in line with the Central Bank’s Consumer Protection Code. The Deputy should note however that neither I, as Minister for Finance, nor the Central Bank have any role in adjudicating on such matters. If there continues to be a disagreement between an insurer and a policyholder, then the appropriate channels for resolving them must be followed i.e. use of the Financial Services and Pensions Ombudsman or litigation.
The above said however, my officials and I have been engaging with the sector in an effort to get some much-needed certainty for business policyholders. On business interruption claims, I wrote to Insurance Ireland on 27 March and indicated amongst other things that
(i) insurers should not attempt to reject claims on the basis of interpreting policies to their own advantage; and,
(ii) that where a claim can be made because a business has closed as a result of a Government direction due to contagious or infectious disease, that the recent Government advice to close a business in the context of COVID-19 should be treated as a direction.
Insurance Ireland, on behalf of its membership, responded on 3 April and stated that it accepted both of my points. It did however indicate that each insurance policy is different and there may well be other factors which lead to the adjudication of whether a business interruption claim is valid or not, other than Government advice to close. Following on from this correspondence, I held a teleconference with Insurance Ireland, on 17 April, where I reiterated that some insurers, by adopting a “blanket” rejection of all business interruption claims, were doing the industry significant reputational damage and were not treating customers fairly.
The Deputy should also note that the Central Bank wrote to the CEOs of major insurers outlining its expectations of them in this crisis from a consumer protection perspective. This included the Bank’s belief that while most insurance policies are clear, if there is a doubt about the meaning of a term, the interpretation most favourable to the consumer should prevail. The Central Bank is continuing to engage with the non-life insurance industry on these matters and will continue to closely monitor the situation to ensure that firms are meeting the expectations as previously set out.
In terms of meeting again with industry, my officials are in regular contact with Insurance Ireland on the above matters and are keeping me updated on developments.
Finally, it is also worth noting I have also held two meetings with the Alliance of Insurance Reform, the latest meeting which took place on 17 June. These meetings were very useful as I was able to hear first-hand the issues faced by businesses in relation to insurance.
In conclusion, I would like to assure the Deputy that my Department will continue to be as pro-active as it can be on these insurance issues and will continue to liaise with the Central Bank and Insurance Ireland, as well as the Alliance for Insurance Reform on an ongoing basis.
Question No. 77 answered with Question No. 61.
Employment Data
Questions (78, 80)
Richard Boyd Barrett
Question:78. Deputy Richard Boyd Barrett asked the Minister for Finance if he will provide a breakdown of the number of persons, earners and tax units who are self-employed and PAYE workers for each of the years 2016 to 2019 by the economic and industrial sector they were employed, income brackets (details supplied), the amount of tax paid in each earning and tax category; and if he will make a statement on the matter. [13652/20]
View answerRichard Boyd Barrett
Question:80. Deputy Richard Boyd Barrett asked the Minister for Finance the average pre-tax and after-tax incomes of tax units earning above €100,000 annually; and if he will make a statement on the matter. [13654/20]
View answerWritten answers
I propose to take Questions Nos. 78 and 80 together.
Regarding Question 13652/20, I am advised by Revenue that the available information on income distribution is published at link: https://statbank.cso.ie/px/pxeirestat/Statire/SelectVarVal/Define.asp?maintable=RVA01&PLanguage=0. This information provides a breakdown of income taxpayers in 2016 and 2017 by range of gross income and by taxpayer type (PAYE or self-employed) and provides data on both incomes and tax liability.
Regarding Question 13654/20, the information in the table at the above link allows for the net income (gross income less tax deducted) to be calculated for all income ranges, including those earning in excess of €100,000.
Data in relation to 2018 will be published at the same location in the coming months. The deadline for filing self-assessment tax returns for 2019 is later in 2020. However, information in relation to incomes and taxes paid by PAYE taxpayers in 2019 across sectors is available in Revenue’s publication ‘Statistics and Insights from the First Year of Real-Time Payroll Reporting (PAYE Modernisation)’ , which is available at link https://www.revenue.ie/en/corporate/information-about-revenue/research/research-reports/income-tax.aspx.
Further information regarding sectoral breakdowns is published at link https://www.revenue.ie/en/corporate/information-about-revenue/statistics/receipts/receipts-sector.aspx. The information includes a sectoral breakdown of tax receipts for 2016, 2017 and 2018, and will be updated to include data in relation to 2019 in the coming weeks.
Company Data
Questions (79)
Richard Boyd Barrett
Question:79. Deputy Richard Boyd Barrett asked the Minister for Finance the number of companies registered here; the number of those that paid corporation tax in the latest available annual figures; the number that did not pay corporation tax; the median and mean corporation tax payments for all companies registered here in that year; and if he will make a statement on the matter. [13653/20]
View answerWritten answers
I have assumed that the Deputy's question relates to companies registered for tax in Ireland. Revenue's latest annual report on corporation tax was published on 25 June 2020. The Corporation Tax 2019 Payments and 2018 Returns report is based on Revenue's analysis of corporation tax payments in 2019 and corporation tax returns for 2018. The report includes details of companies registered for tax in Ireland, and Figure 7 on page 17 provides the number of companies that filed corporation tax returns in 2018, broken down by those reporting profits and liable to tax.
I am advised by Revenue that information is not available in respect of the mean and median tax payments for all companies. However the report provides extensive breakdowns of the available information concerning the amount of corporation tax paid by sector and by net payment amount, for example in Figure 3 and Table 5. The report is available at https://www.revenue.ie/en/corporate/documents/research/ct-analysis-2020.pdf .
Question No. 80 answered with Question No. 78.
National Debt
Questions (81)
Cormac Devlin
Question:81. Deputy Cormac Devlin asked the Minister for Finance the measures being taken to refinance the outstanding obligations into long-term debt of the State in view of the historically low borrowing costs; and if he will make a statement on the matter. [13672/20]
View answerWritten answers
The National Treasury Management Agency (NTMA) has taken advantage of the favourable funding and interest rate environment of recent years to lengthen the maturity of the National Debt and lock-in the benefit of low interest rates.
Since the turn of 2015, the NTMA has issued €90 billion of medium- to long-term debt. This was issued in the form of standard benchmark bonds, green bonds, inflation-linked bonds and ultra long-term (circa 50–100 year) private placements. This €90 billion of funding had an average maturity of circa 14 years and an average rate of less than 1%. It included two new 30-year bonds, a new 20-year bond and two new 15-year bonds.
Debt refinancing “chimneys” over the four year period 2017–2020 that had, at one point, stood at some €70 billion have effectively been eliminated. By contrast, the refinancing requirement over the next four years 2021–2024 is far lower, at just over €27 billion.
Over €23bn of EU-IMF Programme debt in the form of loans from the IMF and the Danish and Swedish bilateral loans was repaid in full and ahead of schedule.
Large cash balances – presently around the €30 billion mark – have been built up and these can be used to part-fund the deficit and repay maturing debt.
Furthermore, the purchase of €17 billion of Floating Rate Notes from the Central Bank of Ireland since late 2014 and their replacement with medium- to long-term fixed rate bonds protects the state against future interest rate rises. This is ahead of the minimum schedule; a strategy driven by the low interest rate environment of recent years.
Mortgage Lending
Questions (82)
Cormac Devlin
Question:82. Deputy Cormac Devlin asked the Minister for Finance the measures being taken to assist applicants that were refused access to a mortgage on the basis they are in receipt of a Covid-19 pandemic payment; and if he will make a statement on the matter. [13673/20]
View answerWritten answers
The Central Bank has advised 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, and my Department maintains close contact with the Central Bank and Banking & Payments Federation Ireland (BPFI) as the lending industry works to address the difficulties arising from the COVID-19 situation.
Lenders continue to process mortgage applications and have supports in place to assist customers impacted by COVID-19. The 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.
Within the parameters of the regulatory framework, as set out below, the decision to grant or refuse an individual application for mortgage credit, or temporarily suspend a mortgage approval in principle, is a commercial decision to be made by the regulated entity. Accordingly, it is not appropriate or possible for me to instruct lenders in that regard.
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 and 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. The CMCAR further provides 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. 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.
Departmental Projects
Questions (83)
Gerald Nash
Question:83. Deputy Ged Nash asked the Minister for Public Expenditure and Reform the status of the financial management shared services project; the cost for each year since the project was introduced in tabular form; and if he will make a statement on the matter. [12749/20]
View answerWritten answers
I am informed by the National Shared Services Office (NSSO) that the Financial Management Shared Services Programme has exited a final design review process, and the next steps involve a process of engagement with client departments to agree a timeline for deployment.
The key deliverable is an integrated and modern financial management system for all of central Government, which will replace 31 individual financial management systems, each of which will require updating or replacement in the coming years. Investment in this centralised system will future proof the Government’s finance function and strengthen financial data insights for Public Service Bodies.
The Programme is also a key enabler for essential financial reporting reform that was approved by the Government in October 2019, as outlined in the 2019 OECD Report on "Financial Reporting in Ireland".
The table below outlines the costs for each year since the project began:
|
2014 |
2015 |
2016 |
2017 |
2018 |
2019 |
|
1.7m |
2.2m |
9.7m |
7.5m |
12.8m |
11.3m |