Dara Calleary
Question:88. Deputy Dara Calleary asked the Minister for Finance his plans to extend the scheme to allow for persons building their own homes (details supplied). [30247/20]
View answerDepartmental Schemes
Questions (88)
Written answers
The Help to Buy incentive (HTB) is a scheme to assist first-time purchasers with a deposit they need to buy or build a new house or apartment. HTB will be in place until 31 December 2021. The incentive gives a refund on Income Tax and Deposit Interest Retention Tax (DIRT) paid in the State over the previous four years, subject to limits outlined in the legislation. in the case of self-build properties, the support takes effect on the date of the draw-down of the first tranche of the mortgage.
With regard to the Deputy's question, which I understand to relate to the enhanced rate relief which applies in the period between 23 July 2020 and 31 July 2020, as he will appreciate, it would be inappropriate for me to comment on measures that may, or may not, be contained in the Budget to be announced later today.
Wage Subsidy Scheme
Questions (89)
Jennifer Murnane O'Connor
Question:89. Deputy Jennifer Murnane O'Connor asked the Minister for Finance his plans to address concerns raised by employers that the delay of up to six weeks to receive subsidy payments under the employment wage subsidy scheme could cause cashflow problems; if he will adjust the employment wage subsidy scheme to enable access for lower paid and seasonal workers who primarily work within the hospitality sector; and if he will make a statement on the matter. [29611/20]
View answerWritten answers
The Employment Wage Subsidy (EWSS), which has been operating since 1 July has replaced the Temporary Wage Subsidy Scheme (TWSS) which expired on 31 August 2020. The EWSS will remain in place until March 2021, thereby allowing employers to rely on the continuation of support over a longer period of 8 months while also ensuring such support is sustainable and affordable. It should be noted that while the TWSS was essentially an employee based subsidy which had to be passed on to the employees through the normal weekly / fortnightly /monthly payroll runs, the EWSS is an employer subsidy to help support viable firms and employers insofar as is possible.
A number of flexibilities have been introduced into the EWSS that are particularly relevant to the sector highlighted by the Deputy, for example, the types of worker who qualify has been broadened to include seasonal workers and new hires.
In terms of the timing of the payments, as set out in the recently enacted Financial Provisions (Covid-19) (No. 2) Act 2020, the EWSS is based on the monthly PAYE/PRSI return to Revenue which is due on the 14th of the month following payment of wages. I am advised by Revenue that the operation of the EWSS is an automated solution, designed to operate at a system level with the monthly PAYE employer returns. The PAYE system is based on the employer reporting payroll runs as they occur. Revenue then posts the monthly return by the fifth day of the following month and the employer has until the 14th of the month to make any corrections to the return. The monthly return is finalised on the 14th .
The EWSS was designed to build on the PAYE monthly system and is a subsidy calculated on the number of qualifying employees. The intention was that Revenue will make the payment into the designated bank account as soon as practicable after that date, typically within 2 days. Thus, for September the intention was that Revenue would start to initiate bank transfers on 16th October.
However, in light of the concerns from some employers on the cash flow impact and acknowledging that this is an extremely challenging time for businesses and employers, on 7 October 2020, Revenue provided an update, by way of public announcement, that it has brought forward the date of payment for Employment Wage Subsidy Scheme (EWSS) supports to eligible employers. EWSS payments in respect of September payroll submissions, which were due to be made as soon as possible after 14 October, were paid into the designated bank accounts of eligible employers from Friday morning, 9 October.
Revenue also confirmed that all future monthly EWSS payments due to eligible employers will be made as soon as possible after the fifth day of the following month. The accelerated payment date aligns with the availability of the monthly ‘Employer PAYE Return Submission Statement’, which is made available to employers in Revenue’s Online Service, ROS, by the fifth of the following month.
Thus, with this in mind Revenue further advise that it is really important that employers make timely and correct payroll submissions as they will now only have the opportunity to make any necessary corrections before the subsidy is paid instead of up until the payroll return filing date of the 14th of the month.
I am pleased to welcome Revenue’s supportive approach to businesses by bringing the date of payment forward for EWSS supports to eligible employers during the current crisis which aims to ease any cashflow for those employers concerned. Additionally, Revenue’s PAYE system will credit monthly employer PRSI liabilities by approximately €60 million to account for the reduced rate of PRSI that applies to wages that are eligible for the EWSS.
It should be recognised that the IT system to support EWSS was developed in close co-operation with the payroll software providers and that any further changes to the operation of the system at this stage, will require significant software developments which could put at risk the smooth operation of the scheme which has so far provided support to 31,700 employers.
Finally, for these businesses who need further support, or who experience cash-flow difficulties arising for the timing of the subsidy payments, there are a number of options open to them – including State backed loans which may be repaid using EWSS funds as well as grants. Particular attention is drawn to the comprehensive package of business and employer supports that have been made available as part of the July Stimulus Plan - including the Credit Guarantee Scheme, the SBCI Working Capital Scheme, Sustaining Enterprise Fund, and the Covid-19 Business Loans Scheme.
Grant Payments
Questions (90)
Jennifer Murnane O'Connor
Question:90. Deputy Jennifer Murnane O'Connor asked the Minister for Finance if the threshold for voucher bonuses from employer to employer will be increased from €500 to €1,000; if it will be made available across at least two payments over 12 months (details supplied); and if he will make a statement on the matter. [29614/20]
View answerWritten answers
Section 112B of the Taxes Consolidation Act 1997, usually allows one voucher per year up to the value of €500 to be given to an employee by his or her employer tax free, provided certain conditions are satisfied.
Where an employer wishes to recognise efforts of frontline or other key staff working during the COVID-19 crisis, either by accelerating part of a reward (voucher) usually paid later in the year, or making an additional voucher award, the requirement that only one voucher issues (as per s112B(1)(d)) has been waived concessionally by Revenue for the 2020 tax year, where the additional award is related to an employee's exceptional efforts during the COVID-19 crisis.
That said, as the Deputy may be aware, it is a longstanding practice of the Minister for Finance not to comment, in advance of the Budget, on any tax matters that might be the subject of Budget decisions.
Mortgage Lending
Questions (91)
Louise O'Reilly
Question:91. Deputy Louise O'Reilly asked the Minister for Finance if his attention has been drawn to the fact that a financial institution (details supplied) will not offer six-month payment breaks and moratoriums to persons that drew down a mortgage after 31 March 2020; and if he will make a statement on the matter. [29680/20]
View answerWritten answers
As the Deputy is aware as Minister for Finance I have no role in the commercial decisions made by the banks, including the nature and structure of any forbearance measures. This applies equally to the banks in which the State has a shareholding.
EBS has provided me with the following statement:
"The EBA Guidelines on legislative and non-legislative moratoria on loan repayments applied in the light of the COVID-19 crisis , state that “the Covid-19 payment break does not apply to new loans granted after the launch of the moratorium. It has to be ensured that the moratorium addresses a specific issue arising as a result of the COVID-19 pandemic and is not used for new lending granted after the outbreak.”
"If a customer finds themselves in financial difficulty, EBS urges them to make immediate contact, as a range of solutions under our well established forbearance process is available on a case by case basis."
Mortgage Lending
Questions (92)
Fergus O'Dowd
Question:92. Deputy Fergus O'Dowd asked the Minister for Finance his views in respect of mortgage applicants of whom Covid-19 review teams within banks are requesting documentation and credit checks from their employers to ascertain if a company is in receipt of the employment wage subsidy scheme in view of the fact that the employee is not in receipt of the payment or has been removed from the scheme; if this is permissible under legislation; and if he will make a statement on the matter. [29710/20]
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.
Lenders continue to process mortgage applications and have supports in place to assist customers impacted by COVID-19. If mortgage applicants have any queries or concerns about the impact of COVID-19 on their mortgage application, they should contact their lender directly.
Within the parameters of the regulatory framework, as set out below, 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.
Before providing a mortgage, lenders are required to undertake thorough creditworthiness assessments to ensure a borrower will be able to repay the mortgage. This assessment must take into account the individual circumstances of the borrower, including personal circumstances and financial situation.
To expand on the regulatory requirements in this 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. 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. The Code specifies that the affordability assessment must include consideration of the information gathered on the borrower’s personal circumstances and financial situation.
Where a lender refuses a mortgage application, the CMCAR requires that the lender must inform the consumer without delay of the refusal. In addition, the Code requires that the lender must clearly outline to the consumer the reasons why the credit was not approved, and provide these reasons on paper if requested.
If a mortgage applicant is not satisfied with how a regulated firm is dealing with them, or they believe that the regulated firm is not following the requirements of the Central Bank’s codes and regulations or other financial services law, they should make a complaint directly to the regulated firm. If they are still not satisfied with the response from the regulated firm, they can refer the complaint to the Financial Services and Pensions Ombudsman.
Cabinet Committees
Questions (93)
Noel Grealish
Question:93. Deputy Noel Grealish asked the Minister for Finance if the special Cabinet committee on insurance reform has met to date; the membership of the committee; the brief of the committee; and if he will make a statement on the matter. [29748/20]
View answerWritten answers
I can assure the Deputy that insurance reform is a key policy priority for this Government and is strongly reflected in the Programme for Government (PfG). In this regard following approval by Government a sub-Group of the Cabinet Committee on Economic Recovery and Investment was formed and has already met.
In relation to insurance, there are a number of areas that require reform and this is why making progress on these requires a ‘whole-of-Government’ approach, as recognised in the PfG. The PfG lays out specific commitments that are aimed at addressing consumer and business concerns on the cost of insurance. These include increasing transparency on claims; reviewing duty of care legislation; looking at how to further enhance the role of the Personal Injuries Assessment Board; minimising the scope for questionable claims; and increasing competition in the market.
Implementation of this agenda will be a key issue for myself and Minister of State Fleming as well other members of Cabinet, especially those that will be working on this through the recently established Cabinet Committee on Economic Recovery and Investment’s Sub-Group on Insurance Reform . This Cabinet Committee sub-Group held its inaugural meeting on 30 September and identified a number of key deliverables to be progressed before the end of 2020. The Sub-Group is chaired by the Tánaiste, and also includes as standing members, myself, Ministers McGrath, McEntee, and O’Gorman, together with Ministers of State Troy and Fleming. I believe that this approach provides the best opportunity to address the cost and availability of insurance on a cross-Departmental basis. This will build and expand upon the previous commendable work done by the Cost of Insurance Working Group.
As you will be aware, a number of important reforms have already taken place, and the impact of these is reflected in the recent CSO data which indicate that the cost of private motor insurance is now almost a third cheaper than at its peak in July 2016. The Sub-Group will focus on those reforms needed to ensure that reductions in cost can be extended to other areas of insurance, most notably, Employer and Public Liability insurance, which are among the main concerns for business.
In conclusion, the Deputy can rest assured that insurance reform is a key priority issue for the new Government and that Minister of State Fleming and our officials are working to ensure that progress is made in this policy area.
Covid-19 Pandemic Supports
Questions (94, 95)
Duncan Smith
Question:94. Deputy Duncan Smith asked the Minister for Finance the financial support measures planned if Ireland needs to go to a Plan for Living with Covid-19 level 4 designation; and if he will make a statement on the matter. [29771/20]
View answerDuncan Smith
Question:95. Deputy Duncan Smith asked the Minister for Finance the financial support measures planned if Ireland needs to go to a Plan for Living with Covid-19 level 5 designation; and if he will make a statement on the matter. [29772/20]
View answerWritten answers
I propose to take Questions Nos. 94 and 95 together.
Over the course of the year, the Government has responded to the pandemic by putting in place measures to address its impact on people, on firms and on sectors. Amongst the largest measures are the Employment Wage Subsidy Scheme and the Pandemic Unemployment Payment.
These measures will continue to apply if the country moves to a higher level of 'restriction'.
Further measures to support business and households will be set out in Budget 2021 .
Questions Nos. 96 and 97 answered with Question No. 81.
Mortgage Schemes
Questions (98)
Seán Canney
Question:98. Deputy Seán Canney asked the Minister for Finance the recourse available for lenders that have disputes with financial institutions in circumstances in which loans have been sold off on a number of occasions and there is a dispute as to who owns the loan; and if he will make a statement on the matter. [29844/20]
View answerWritten answers
When a consumer takes out a loan from a regulated lender it is subject to all relevant Irish and EU consumer protections. Most loan agreements include a clause that allows the loan to be sold to another firm. When a loan is sold, the relevant Irish and EU consumer protections continue to apply. All mortgages or loans which are sold or assigned to a new creditor will continue to be subject to the terms of the contract as entered into by the borrower. As a matter of contractual law, the new creditor will not be able to unilaterally change the terms and conditions of the contract.
I am advised by the Central Bank that under the Consumer Protection (Regulation of Credit Servicing Firms) Act 2018, which came into effect on 21 January 2019, that if a loan is transferred, the holder of the legal title to the credit must be authorised by the Central Bank as a credit servicing firm, if it is not already regulated as a credit institution or a retail credit firm. Such credit servicing firms must act in accordance with Irish financial services law that applies to ‘regulated financial service providers’. This ensures that consumers, whose loans are sold to another firm, maintain the same regulatory protections that they had prior to the sale, including under the various statutory Codes of Conduct issued by the Central Bank, such as the Consumer Protection Code 2012 (Code) and the Code of Conduct on Mortgage Arrears 2013 (CCMA).
The Deputy should also be aware that the Central Bank issued an industry letter in August 2019 to banks, retail credit firms and credit servicing firms, to set out its expectations in relation to Mortgage Loan Transactions, including sales of residential mortgage loans. These expectations include, inter alia , that sufficient due diligence and information sharing takes place at the outset to ensure that complete customer files transfer as part of a loan sale.
However, if a borrower is not satisfied with how a regulated firm is dealing with them, or they believe that the firm is not following the requirements of the Central Bank’s codes and regulations or other financial services law, they should make a complaint directly to the regulated firm. The relevant provisions as regards ‘Complaints Resolution’ are contained in Chapter 10 of the Consumer Protection Code .
If they are still not satisfied with the response from the regulated firm, they can refer the complaint to the Financial Services and Pensions Ombudsman (FSPO) to have it investigated; the FSPO is completely independent in the performance of his statutory functions. Investigations by the Ombudsman are free of charge to the complainant.
Motor Insurance
Questions (99)
Emer Higgins
Question:99. Deputy Emer Higgins asked the Minister for Finance the steps he will take to address the increasingly high cost of motor insurance, in particular for young drivers and drivers of vehicles such as caddies; and if he will make a statement on the matter. [29899/20]
View answerWritten answers
At the outset, while I have an appreciation of the specific issue the Deputy raises, neither I, nor the Central Bank of Ireland, can direct the pricing of insurance products, as this is a commercial matter, nor can we compel any insurer operating in the Irish market to provide cover. This position is reinforced by the EU Single Market framework for insurance (the Solvency II Directive) which expressly prohibits Member States from doing so.
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 motor insurance cover and what terms to apply. For example, factors may include the drivers age; relevant driving experience; the age and type of vehicle; how and where the vehicle is used; the claims record; the number of drivers; and the storage location. Insurers also price in accordance with their specific claims experience and do not use the same combination of rating factors. Accordingly, premium prices vary across the market, demonstrating why it is important for consumers to shop around on their insurance policies.
As the Deputy will appreciate, there is no single policy or legislative fix to remedy the cost and availability of insurance issue. The Programme for Government identifies a range of issues that the Government will prioritise through the recently established Cabinet Committee on Economic Recovery and Investment’s Sub-Group on Insurance Reform . This sub-Group held its inaugural meeting on 30 September and identified a number of key deliverables to be progressed before the end of 2020. The Sub-Group is chaired by the Tánaiste, and also includes as standing members, myself, Ministers McGrath, McEntee, and O’Gorman, together with Ministers of State Troy and Fleming. I believe that this approach provides the best opportunity to address the cost and availability of insurance on a cross-Departmental basis. This will build and expand upon the previous commendable work done by the Cost of Insurance Working Group. As you will be aware, a number of important reforms have already taken place, and the impact of these is reflected in the recent CSO data which indicate that the cost of private motor insurance is now almost a third cheaper than at its peak in July 2016.
In terms of addressing the affordability and accessibility of insurance generally, a necessary step is to bring the levels of personal injury damages awarded in this country more in line with those awarded in other jurisdictions. The establishment of the Judicial Council last December is very important in this regard, and it is expected that the Personal Injuries Guidelines Committee will submit draft Guidelines to the Judicial Council before the end of the year. It is desirable that the Guidelines could play a role in the lowering of award levels and also could lead to a more consistent application of making awards in courts. Insurance Ireland, the representative body for insurance providers in this country, has indicated that if award levels come down so will premiums charged by its members. I believe that this is a very important statement and this Government intends holding the insurance industry to this commitment.
Finally, I think it is also worth mentioning that Insurance Ireland operates an Insurance Information Service for those who have queries, complaints or difficulties in relation to obtaining insurance, which can be accessed at: feedback@insuranceireland.eu.
Wage Subsidy Scheme
Questions (100)
Fergus O'Dowd
Question:100. Deputy Fergus O'Dowd asked the Minister for Finance if he will address a matter (details supplied); and if he will make a statement on the matter. [29903/20]
View answerWritten answers
The Temporary Wage Subsidy Scheme (TWSS) ceased on 31 August 2020 and was replaced by the Employment Wage Subsidy Scheme (EWSS) from 1 September 2020. When operational, the TWSS supported more than 66,000 employers in respect of approximately 664,000 employees at a cost of almost €2.9 billion to the Exchequer.
The Emergency Measures in the Public Interest (Covid 19) Act assigned responsibility for the care and management of the TWSS to Revenue and I am advised that in exercise of this responsibility, it has over the last few months, engaged in a phased programme of compliance checks on all participating employers (66,000). In most cases the compliance checks are a relatively straight forward enquiry requiring proof of eligibility for the scheme and evidence that the funds were properly passed on to qualifying employees. Having regard to this latter aspect, Revenue has been prioritising cases with larger numbers of employees and as of last week had initiated checks in respect of some 70% of the employments subsidised through the scheme.
Revenue has confirmed that the most recent tranche of compliance check letters issued on Friday 2 October, including the one referenced by the Deputy. As was the case with previous tranches, Revenue requested employers to confirm eligibility for the TWSS by reference to the decline in turnover in Quarter 2 of this year and to provide sample payslips confirming payment of the support to their qualifying employees. It is important to note that Revenue has not asked employers to provide any detailed tax information or computations in the letters, thereby facilitating a response within five days in most cases.
Where Revenue identifies intentional non-compliance with the conditions of the TWSS, or where employers fail to engage with the compliance checks, it will carry out a wider review of the tax compliance position of those businesses.
Revenue has already received a significant level of response from employers to the most recent letters and as was the case with the previous tranches, the information received indicates a high-level of compliance by employers with the terms of the scheme. However, a relatively small number of cases have been identified as needing closer examination and this will be completed as quickly as possible.
Covid-19 Pandemic Supports
Questions (101)
Michael Lowry
Question:101. Deputy Michael Lowry asked the Minister for Finance if payments issued under the restart grant and restart grant plus will be exempt from payment of income tax and other tax liabilities; and if he will make a statement on the matter. [29929/20]
View answerWritten answers
The restart grant and restart grant plus are a contribution towards the cost of re-opening or keeping a business operational and re-connecting with employees and customers.
I am advised by Revenue that in the case of a sole trader who is within the charge to income tax, such a grant would be taken into account in computing amounts chargeable to income tax. The tax treatment of the grant will depend on how it is used:
- Where the grant is used by the sole trader to defray expenditure which is revenue in nature, such as utility or insurance expenses costs, it will be taken into account when calculating the trader’s taxable trading profits.
- Where a grant is used to fund the acquisition of plant and machinery for use in the sole trader’s business, expenditure which is capital in nature, the trader will be entitled to claim capital allowances in respect of that expenditure net of the grant received.
Revenue also advise that a similar treatment applies for a company in receipt of the restart grant or restart grant plus.
Covid-19 Pandemic Supports
Questions (102)
Brendan Griffin
Question:102. Deputy Brendan Griffin asked the Minister for Finance if the stay and spend scheme will be expanded to include takeaway meals in view of the recently announced restrictions on indoor dining; and if he will make a statement on the matter. [29965/20]
View answerWritten answers
The Stay and Spend scheme provides tax relief by means of a tax credit at the rate of 20% on qualifying expenditure of up to €625 per person, or €1,250 for a jointly assessed couple, in respect of 2020 and 2021. The tax credit is worth a maximum of €125, or €250 for a jointly assessed couple.
As the Deputy will be aware, the Stay and Spend scheme is just one of a broad range of measures to support various sectors, including hospitality, at this time. The purpose of the Stay and Spend scheme is to provide targeted support to businesses within the hospitality sector whose operations are likely to be most affected by continued restrictions. While I appreciate the point raised by the Deputy, food and drink service providers which operate on a take-away basis are not expected to be as heavily affected by the current restrictions as service providers offering ‘dine-in’ food and drink services and so would not fall within the particular objectives of the scheme.