Written Answers Nos. 339-362
339. Deputy Ged Nash asked the Minister for Finance the steps he will take to help retain lines of credit for mortgages to persons who will be availing of the employment wage subsidy scheme; and if he will make a statement on the matter. [20479/20]
View answer352. Deputy Ged Nash asked the Minister for Finance the steps he has taken with the banking sector to ensure that it is retaining lines of credit for mortgages to persons (details supplied) who are on the temporary wage subsidy scheme; and if he will make a statement on the matter. [20492/20]
View answerI propose to take Questions Nos. 339 and 352 together.
I fully appreciate the difficulties that people on the Temporary Wage Subsidy Scheme are experiencing in relation to mortgage applications and drawdowns. The Central Bank has made it clear to all regulated firms that they must take a consumer-focused approach and to act in their customer's best interests at all times, including during the Covid-19 pandemic, and that it continues to monitor this situation very closely to ensure that lenders are complying with this requirement.
Lenders continue to process mortgage applications and have supports in place to assist customers impacted by COVID-19. Indeed, the three main retail banks assured the Tánaiste, Leo Varadkar T.D., Minister McGrath and me at meetings on the 15th and 16th of July that they are considering applications and mortgage drawdowns from customers on the Temporary Wage Subsidy Scheme on a case by case basis. they also assured us that they are taking a fair and balanced approach.
The BPFI has published a Covid-19 support information document 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.
However, as the Deputy is aware, subject to the parameters of the regulatory framework governing the provision of mortgages, the decision to grant or refuse an individual application for mortgage credit is a commercial decision to be made by the regulated entity and it is not appropriate or possible for me to instruct lenders in that regard. Also it may be the case that a loan offer from a lender may contain a condition that would allow the lender to 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 also a commercial and contractual decision for the lender.
Regarding the regulations governing mortgage credit, the European Union (Consumer Mortgage Credit Agreements) Regulations 2016, which transposed the Mortgage Credit Directive into Irish law, require lenders to 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 Regulations further 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. 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. The measures outlined above, which are designed to protect borrowers from being exposed to unsustainable mortgages, were introduced in response to the experiences arising during, and since, the last downturn.
However, if a consumer if not satisfied with the way a regulated entity is dealing with his/her mortgage application or drawdown then, under the provisions of the Central Bank Consumer Protection Code, s/he can make a complaint to the lender. If the consumer is still unhappy with the position following the outcome of the internal complaints process, then s/he can make a complaint to the Financial Services and Pensions Ombudsman (FSPO). Clear information on how to make a complaint to the FSPO may be found at this link:
https://www.fspo.ie/make-a-complaint/#:~:text=Contacting%20the%20FSPO%20about%20your%20complaint&text=Phone%20us%20on%20%2B353%201,a%20complaint%20form%20by%20post.
342. Deputy Ged Nash asked the Minister for Finance if he received advice from his officials regarding the distributional impact of the stay and spend incentive; if persons in the lower tax bracket or higher income tax bracket are more likely to avail of the scheme; and if he will make a statement on the matter. [20482/20]
View answerIn preparing the Stay and Spend Tax Credit measure, I received advice from officials in my Department and Revenue on a wide range of issues, including the number of persons that may be in a position to avail of the incentive fully or partially.
The relief applies equally to all taxpayers regardless of whether they pay tax at the standard or marginal rates and the minimum level of expenditure to start to benefit from the incentive is €25. The credit will be off-set against the claimant’s income tax liability in the year of assessment, after other allowances, deductions or reliefs have been given to the claimant. However, in order to maximise the number of potential beneficiaries of the proposal, the Bill provides that if the credit available to a claimant is higher than their income tax liability in the year of assessment, any excess credit may be off-set against their liability to USC in that same year. This credit can be used to reduce a claimant’s liability to income tax and USC in the year of assessment to nil.
343. Deputy Ged Nash asked the Minister for Finance his plans to attach eligibility conditions pertaining to employment rights and conditions for employers availing of the stay and spend incentive; his plans for a sectorial oversight mechanism with the involvement of recognised trade unions to ensure the effective implementation of this policy with respect to workers’ rights; and if he will make a statement on the matter. [20483/20]
View answer344. Deputy Ged Nash asked the Minister for Finance the status of his discussion with the Tánaiste and Minister for Business, Enterprise and Innovation regarding the proposed eligibility criteria for the stay and spend incentive; his plans to end the effective employer veto of joint labour committees for the hospitality sector to ensure workers in businesses benefiting from the scheme are protected and fairly remunerated; and if he will make a statement on the matter. [20484/20]
View answerI propose to take Questions Nos. 343 and 344 together.
The Stay and Spend Tax Credit is an incentive targeted at consumers. It does not envisage a regulatory role in relation to the employer/employee relationship within the eligible service provider in so far as terms, conditions, entitlements and rights of the employment are concerned. The regulation of such matters is provided for in other legislation outside of the tax code.
In relation to joint labour committees for the hospitality sector, my Department has been advised by the Department of Business, Enterprise and Innovation that Joint Labour Committees are bodies established under the Industrial Relations Acts to provide machinery for fixing statutory minimum rates of pay and conditions of employment for employees in sectors where union organisation is weak or non-existent, with relatively low pay. A Joint Labour Committee is composed of equal numbers of representatives of employers and workers in an employment sector. The process for setting up a Joint Labour Committee requires the co-operation of both sides of industry. A proposal that had not considered and heard the views of the employer side would be unlikely to survive a legal challenge. Employees in the hospitality sector, like all workers in Ireland, are protected by a robust regime of employment rights.
345. Deputy Ged Nash asked the Minister for Finance his plans for an enhanced corporate tax loss relief to provide additional liquidity supports for businesses; and if he will make a statement on the matter. [20485/20]
View answerAs the Deputy will be aware, the recently published Financial Provisions (Covid-19)(No. 2) Bill 2020 (the Bill) sets out the fiscal measures in the July Stimulus Plan and it follows from a range of COVID-19 financial assistance provided in recent months. These include income supports, new or repurposed debt funding arrangements, temporary waivers of commercial rates and “warehousing” of tax debts. This Bill contains a series of immediate measures to support businesses and increase consumer confidence, thereby stimulating the economy to return to capacity as businesses and society resume activity in accordance with public health advice and Government decisions. The Bill was designed to use the available budget to benefit as many sectors as possible, as quickly as possible, and as simply as possible.
It is in this context that section 11 of the Bill introduces a new measure to accelerate corporation tax loss relief, to provide cash flow support of up to €450 million for previously profitable companies that are now experiencing losses as a result of public health measures. It does this by allowing companies to estimate their losses for an accounting period containing all or part of the period March to December 2020. Companies may then make an early claim to carry back 50% of those estimated losses for offset against taxable profits of the prior accounting period, which will generate an immediate refund of some or all of the corporation tax paid for that accounting period.
Under normal rules, this carry back would not take place until up to nine months after the end of the loss-making accounting period, when tax returns and accounts are filed. The new provision allows claims to be made (and revised if necessary) at any time from four months into the loss-making accounting period and up to five months after the end of that accounting period. This significantly accelerates the tax repayments to companies that can be generated from the offset of these losses against previously taxed profits. The balance of the loss will be available for carry back in due course under normal rules, when accounts have been prepared after the end of the company’s accounting period.
As this new measure is a temporary acceleration of an existing relief, there is no incremental cost to the Exchequer in the medium term. However, it will provide much needed cash flow cash flow support of up to €450 million in a relatively simple and straightforward manner, thereby helping viable and tax compliant companies to continue trading.
346. Deputy Ged Nash asked the Minister for Finance his plans for an income tax relief for self-employed persons to provide liquidity; and if he will make a statement on the matter. [20486/20]
View answerThe Financial Provisions (Covid-19) (No. 2) Bill 2020 contains a measure to provide for a new once-off income tax relief for self-employed individuals carrying on a trade or profession who were profitable in 2019 but, as a result of the Covid-19 pandemic, incur losses in 2020. A key objective of this measure is to provide a cash-flow boost to individuals carrying on a trade or profession as sole traders or members of partnerships.
It will allow such individuals to claim to have those losses (and certain unused capital allowances) carried back and deducted from their profits for the tax year 2019. This will reduce the amount of income tax payable in respect of those profits. Furthermore, because many people have paid preliminary tax for 2019 they will get a refund of tax which will be a cash flow boost.
Losses will be ring-fenced to the same trade only and the total amount of losses that can be utilised per trade will be capped at €25,000. Therefore, depending on the marginal rate of income tax that applies to the self-employed person, the maximum cash-flow benefit per business will be either €5,000 (20% rate) or €10,000 (40% rate).
The provisions also give an option to farmers who incur a loss in 2020 to step out of income averaging for the tax year 2020, notwithstanding that the farmer may already have stepped out of income averaging in one of the four preceding tax years.
Self employed persons may also be able to benefit from a number of the other non-tax measures contained in the July Stimulus Package announced last week.
347. Deputy Ged Nash asked the Minister for Finance if he will provide details relating to the issue of liability for income tax on employees availing of the temporary wage subsidy scheme; the way in which the liability for tax owed will be treated; and if he will make a statement on the matter. [20487/20]
View answer348. Deputy Ged Nash asked the Minister for Finance if he will provide details relating to the issue of liability for income tax on employees availing of the pandemic unemployment payment; the way in which the liability for tax owed will be treated; and if he will make a statement on the matter. [20488/20]
View answer357. Deputy Pearse Doherty asked the Minister for Finance the way in which tax liability outstanding for payments received through the temporary wage subsidy scheme will be collected in cases in which the liability exceeds the value of unused tax credits for 2020; if that outstanding liability is to be collected against future tax credits; if so, the time period; and if he will make a statement on the matter. [20745/20]
View answerI propose to take Questions Nos. 347, 348 and 357 together.
Payments made under both the Temporary Wage Subsidy Scheme (TWSS) and the Pandemic Unemployment Payment (PUP) scheme are income supports and share the characteristics of income. Other income earners in receipt of comparable “normal wages” are taxable on those wages. In the interest of equity, payments under the TWSS and the PUP are subject to income tax. Payments under the TWSS are also subject to universal social charge (USC), while the PUP follows the general taxation rule for social welfare payments and, thus, is exempt from that charge. Payments under both schemes are exempt from PRSI charges.
Neither PUP nor TWSS payments are taxed in real-time through the PAYE system, but a recipient of either payment may become liable for income tax and USC (for TWSS only) at the end of the year, which will be calculated by Revenue through the end of year review process.
In cases where the tax liability for those payments exceeds unused personal and PAYE tax credits for 2020, the level of tax and USC due by the person may be reduced or eliminated by the amount of unused tax credits available to him or her at the end of the year. Any liability due may also be further reduced if the person has additional tax credits, for example health expenses, to offset. Revenue has also very recently placed all recipients of TWSS payments or the PUP on what is known as the “week 1 basis” of taxation for the remainder of the year so as to “preserve” unused tax credits that can then be used to offset any income tax or USC liabilities that may arise at end year.
I am advised by Revenue that the final calculation of the end of year tax liability for each person is dependent on a range of factors, including the person’s civil status, their available tax credits, the amount received under TWSS and/or PUP, any top-up payments made by the employer, as well as other entitlements and credits, such as health expenses. Revenue has also assured me that if any tax and USC liabilities still arise at end year following the allocation of unused credits, it will work with its customers to collect the outstanding liabilities over an extended period. This will be achieved by reducing their tax credits for future years, thereby minimising any financial hardship to the greatest extent possible.
349. Deputy Ged Nash asked the Minister for Finance the number of employers that have returned payments made by the Revenue Commissioners under the temporary wage subsidy scheme since its inception; the amount in cash terms that has been returned to date; and if he will make a statement on the matter. [20489/20]
View answerI am advised by Revenue that the Temporary Wage Subsidy Scheme (TWSS) has provided financial support to over 65,000 employers in respect of almost 627,000 employees. The cost of the scheme to date is €2.17bn.
Revenue has also confirmed that 2,056 employers have returned TWSS payments amounting to €27.3m since the commencement of the scheme. These numbers are up to and including 27 July 2020.
351. Deputy Ged Nash asked the Minister for Finance when the databank of his Department was last updated (details supplied); and if he will make a statement on the matter. [20491/20]
View answerThe Databank website is updated on a monthly basis with both expenditure and taxation figures, along with the monthly Exchequer statement.
I understand the Deputy to be referring specifically to the Budgetary Statistics section of the site. Since the 2017 publication, the annual Budgetary Statistics document has been published on the Department of Finance website, available at:
https://www.gov.ie/en/collection/33c074-budgetary-statistics/
Going forward, I will ask my officials to look into updating the Databank so that these data can also be made available there.
353. Deputy Gary Gannon asked the Minister for Finance if his attention has been drawn to employees and employers being impacted by the temporary wage subsidy scheme (details supplied); and if he will make a statement on the matter. [20531/20]
View answerThe legislation underpinning the Temporary Wage Subsidy Scheme (TWSS) is contained in Section 28 of the Emergency Measures in the Public Interest (Covid-19) Act 2020. Of necessity, the legislation and the scheme itself were developed very quickly to support the urgent Government objective of getting much needed assistance to employers and employees that 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.
On 15 April 2020 I announced a number of changes to the TWSS to ensure further support for workers on lower incomes and to allow employers to pay a higher level of top-up. These changes mean that more employees now receive a subsidy of €350 per week.
Section 2 of the Financial Provisions (Covid-19) (No. 2) Bill 2020 makes provision for the introduction of the Employment Wage Subsidy Scheme (EWSS) which will ultimately replace the TWSS. Both schemes will run in parallel from 31 July 2020 until the TWSS ceases at the end of August 2020. Employers who have already availed of the TWSS may make an additional claim for non-TWSS employees in the EWSS from 31 July. This is to provide additional flexibility in circumstances where employees were not previously eligible to be paid via TWSS, such as new hires and seasonal workers. If applicable, some claims may be backdated for employees who have been paid from 1 July 2020.
As with the TWSS, the purpose of the EWSS is to maintain the link between the employee and employer insofar as is possible. It is therefore based on the number of employees on the payroll and the employer is expected to make best efforts to maintain as close to 100% of normal income as possible for the duration of the subsidy period.
Looking forward, the EWSS is an economy-wide scheme that will focus primarily on business eligibility, delivering a per-head subsidy on a flat rate basis. This adaptation from the TWSS will allow employers to rely on the continuation of support over a longer period of 8 months while also ensuring such support is sustainable and affordable.
The primary qualifying criteria is that the employer must be able to demonstrate that they are operating at no more than 70% turnover from July to December 2020 compared with the same period in 2019.
The level of subsidy the employer will receive is per paid employee:
- For every employee paid more than €203 gross per week, the level of subsidy is €203
- For every employee paid between €151.50 and €202.99 gross per week, the subsidy is €151.50
- A nil subsidy is payable for employees paid less than €151.50 or more than €1,462 gross per week.
A 0.5% rate of employers PRSI will continue to apply for employments that are eligible for the subsidy. This represents a considerable saving for the employer in addition to the flat rate values above (up to 11.05% of the full wage paid).
The position in relation to the EWSS does not affect any legal obligations that the employer may have to their employee as regards any terms, conditions or entitlements of their employment, including pay. As the economy continues to reopen, the capacity of businesses should also increase so that they can increasingly rely on their own resources to cover extra hours worked.
354. Deputy Aodhán Ó Ríordáin asked the Minister for Finance the number of applications for the help-to-buy scheme for quarters 1 and 2 in 2020; the number of applications approved in the same period; the estimated annual number of recipients of the scheme in 2020 and 2021; the estimated median payment under the scheme; and the estimated expenditure per year. [20544/20]
View answer356. Deputy Catherine Murphy asked the Minister for Finance the number of recipients of the help-to-buy scheme in 2020; the median payment under the scheme; and the expenditure to date. [20631/20]
View answerI propose to take Questions Nos. 354 and 356 together.
I am advised by Revenue that some 6,847 applications have been received for the Help to buy scheme (HTB) to date this year, for the period 1 January to 30 June 2020. In that same period, some 2,490 claims were approved.
Bearing in mind that HTB is a demand led scheme which is subject to a broad range of variables, including housing completion rates and prices, it is not possible to provide a reliable estimate of the annual number of recipients, the annual expenditure or the median payments made under the scheme for 2020 and 2021.
The estimated total value of approved HTB claims to date, for the period 19 July 2016 to 30 June 2020, is in the order of €281.9 million.
I am advised by Revenue that monthly statistics on the uptake of the Help to Buy (HTB) scheme are published at the following link:
https://www.revenue.ie/en/corporate/information-about-revenue/statistics/tax-expenditures/htb/htb-monthly.aspx.
These statistics are updated to 1 July 2020. The available information includes a breakdown of the numbers of applications for the scheme, the numbers of recipients of refunds, the amounts claimed and the cost in each month.
355. Deputy Catherine Murphy asked the Minister for Finance if he will provide a schedule of advisers, special advisers and seconded civil servants currently working in his Department appointed and-or recruited and-or in an acting capacity; the roles and responsibilities attributed to each; and the salary scale for the role in tabular form. [20619/20]
View answerI wish to inform the Deputy that on the commencement of every Dáil, the Department of Public Expenditure and Reform issues guidelines setting out the arrangements for the staffing of Ministerial Offices. The appointment of Special Advisers is subject to section 11 of the Public Service Management Act 1997.
The Guidelines for the 33rd Dáil, which incorporate the principles of section 11 of the PMSA Act, are currently awaiting Government approval.
The appointment of individual Special Advisers is a matter for each Government Minister subject to the terms set out in the aforementioned guidelines, although the appointments are also subject to formal Government approval. At this stage, no Special Advisers have been formally appointed to my Department by the Government.
However, the Deputy may wish to note that I have assigned two persons to work with me as Special Advisers and those persons will be formally appointed by the Government once the Guidelines have been approved.
The Minister for Public Expenditure and Reform must be notified of the rate of salary to be paid in all cases for Special Advisers; These rates will then be published on the website of the Department of Public Expenditure and Reform.
A breakdown of administrative staff seconded into the Department of Finance by grade is supplied in the table below. The staff in question operate in various roles with varying responsibilities appropriate to their grade across the structures of the Department. Staff seconded into the Department of Finance retain their existing terms and conditions of employment. Please see table below:
|
Grade |
Number |
PPC Standard Scale |
PPC Higher Scale |
Non PPC Standard Scale |
Non PPC Higher Scale |
|
Principal Officer |
1 |
€87,325 €107,399 |
€93,785 €115,051 |
€83,090 €102,159 |
€89,219 €109,430 |
|
Assistant Principal |
5 |
€67,659 €83,740 |
€74,068 €91,961 |
€65,356 €79,681 |
€70,490 €87,495 |
There are also a number of specialists seconded from the NTMA but these are not on the Department of Finance payroll.
358. Deputy Pearse Doherty asked the Minister for Finance the estimated number of persons that have benefitted from guidelines issued by the Revenue Commissioners under which the 183-day rule for tax residence has been relaxed in cases in which the person is prevented from leaving the State due to force majeure circumstances in the context of Covid-19; the estimated cost of the guidelines in comparison to if they had not been issued; and if he will make a statement on the matter. [20746/20]
View answerI am advised by Revenue that an individual’s tax residence position continues to be determined in accordance with the provisions of section 819 Taxes Consolidation Act 1997. In that regard, an individual’s tax residence status is determined by reference to his or her presence in the State during a particular tax year. For example, an individual will be considered tax resident in the State if he or she is present in the State for:
- 183 days or more in a tax year; or
- 280 days or more in a tax year and the preceding tax year when taken together, with a minimum of 30 days in each year.
An individual’s liability to Irish income tax is determined by reference to the source of his or her income and his or her Irish tax residence, ordinary residence and domicile status for a particular year.
Prior to COVID-19, Revenue guidance stated that where an individual is prevented from leaving the State on his or her intended day of departure due to extraordinary natural occurrences or an exceptional third party failure or action – none of which could reasonably have been foreseen and avoided – the individual will not be regarded as being present in the State for tax residence purposes for the day after the intended day of departure, provided the individual is unavoidably present in the State on that day due only to ‘force majeure’ circumstances.
Revenue’s interpretation of “force majeure” has been updated to consider those cases who, as a result of COVID-19, have had a departure from the State restricted directly as a result of the emergency situation. In any case where a taxpayer relies upon “force majeure”, it will be necessary for him or her to be able to appropriately support this position (i.e. information/documentation in relation to how a departure from the State has been prevented due to restrictions in place). This is likely to occur when an individual reviews their tax position for 2020 with a view to filing their 2020 return of income which is due by 31 October 2021.
It is not possible to determine the number of individuals who have benefitted from the updated Revenue guidance. Indeed, it is not possible to determine whether the additional time spent in the State will have materially affected an individual’s Irish tax residence position in any event. For example, a relatively short period of additional days spent in the State is unlikely to result in a non-resident individual being considered tax resident for a particular year. A non-resident individual may, however, continue to have a liability to Irish income tax to the extent they have Irish source income. This is subject to the provisions of any relevant Double Taxation Agreement.
Finally, where an individual is present in the State in 2020, his or her tax residence position should be determined on a self-assessment basis with regard to his or her presence in the State, while having regard to the “force majeure” position. The guidance on “force majeure” is included on the COVID-19 section of Revenue’s website -
https://www.revenue.ie/en/corporate/communications/covid19/compliance-with-certain-reporting-and-filing-obligations.aspx.
359. Deputy Pearse Doherty asked the Minister for Finance the number of persons availing of the special assignee relief programme in 2019, disaggregated by salary in intervals of €10,000; and if he will make a statement on the matter. [20747/20]
View answer360. Deputy Pearse Doherty asked the Minister for Finance if persons availing of the special assignee relief programme will be removed from the programme if found to be travelling to countries in contravention of the Covid-19 general travel advisory in operation by the Department of Foreign Affairs and Trade; and if he will make a statement on the matter. [20748/20]
View answerI propose to take Questions Nos. 359 and 360 together.
I am advised by Revenue that Special Assignee Relief Programme (SARP) claimants in 2019 are due to file their tax returns by 31 October 2020 (mid November 2020, if filing and paying through ROS).
The latest year for which data are currently published is 2017, which includes a breakdown of SARP claimants into salary bands for 2013-2017. This data can be found at the following link: https://www.revenue.ie/en/corporate/information-about-revenue/research/statistical-reports/special-assignee-relief-programme.aspx.
Revenue has also confirmed that it expects to submit the Annual Report on SARP for 2018 to my Department in August 2020, which I will publish in due course.
In relation to SARP and the Covid-19 general travel advisory, there is no interaction between to two measures.
361. Deputy Bríd Smith asked the Minister for Finance the payments for services or goods by his Department to a company (details supplied) since 2015. [20776/20]
View answerMy Department has made no payments for services or goods since 2015 to the company named by the Deputy.
