Mortgage Lending

Questions Nos. 199 and 200 answered with Question No. 187.

Questions (198)

Colm Burke

Question:

198. Deputy Colm Burke asked the Minister for Finance if his Department has examined the viability of proposals for existing loans in the banking system, particularly mortgage loans, to be refinanced at lower rates using cheaper funding from the European Central Bank; if so, if these proposals are viable; and if he will make a statement on the matter. [6561/21]

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Written answers (Question to Finance)

It is not clear what particular proposals the Deputy is referring to in his question; however, if the Deputy provides further information to identify the particular proposals the matter can be considered further.

In any event, the Deputy may wish to note that Irish banks substantially fund their mortgages and other loans by way of deposits raised from Irish households and firms, and that eurosystem funding forms only a relatively small share of their overall liabilities. Therefore, if a greater proportion of existing and new bank loans are to be funded by way of eurosystem funding this would reduce the need and demand for deposits as a source of bank funding. In terms of funding costs, while the eurosystem’s Targeted Longer-Term Refinancing Operations (TLTRO) programme provides funding at favourable rates to incentivise eligible lending, mortgage lending is not a type of eligible lending for this purpose (and in any event TLTRO funding is for a three year period which would not be an appropriate funding match for more long term mortgage lending purposes). More generally, it can be noted that the main refinancing operation has traditionally been the key ECB policy rate, and that this rate is currently set at 0%. As against this, it can be noted that the level of interest rates on household overnight deposits, which account for the largest share of household deposits, was only 0.03% in November 2020.

Questions Nos. 199 and 200 answered with Question No. 187.

Mortgage Lending

Questions (201)

Emer Higgins

Question:

201. Deputy Emer Higgins asked the Minister for Finance if he will report on his engagement with the banks in relation to providing support to mortgage holders in receipt of the pandemic unemployment payment or the employment wage subsidy scheme who may be finding it difficult to make repayments at present; and if he will make a statement on the matter. [6594/21]

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Written answers (Question to Finance)

I appreciate the stress and uncertainty that many borrowers are facing at this difficult time, and those borrowers who are experiencing difficulty in meeting their repayments will continue to need assistance and support from their lenders. In this regard it is the clear expectation of both the Central Bank and I that lenders engage effectively and sympathetically with distressed borrowers – in line with the Code of Conduct on Mortgage Arrears, the Consumer Protection Code and regulations for lenders lending to SMEs – to deliver appropriate and sustainable solutions and facilitate as many borrowers as possible to return to repaying their debt.

The Banking and Payments Federation of Ireland (BPFI) stated last month that its members are continuing to commit significant resources to support customers impacted by COVID-19, and in particular those who are affected by the latest restrictions. Through ongoing engagement with the BPFI and lenders, the Central Bank is working to ensure that borrowers affected by COVID-19 continue to be supported through this period of unprecedented stress.

Borrowers have a suite of regulatory protections, and lenders have specific obligations to support and work with borrowers who are continuing to experience loan difficulty because of COVID-19. It is in the best long term interests of both the borrower and lender that engagement takes place in relation to a particular loan difficulty and that the most appropriate solution to the individual case is adopted as soon as possible. The options could include additional flexibility, and this could be a short term arrangement such as additional periods without payments or interest-only repayments, or if appropriate more long term arrangements.

The Central Bank has indicated to lenders that they should ensure that they have sufficient expert resources to assess individual borrower circumstances, and to offer appropriate and sustainable solutions to affected borrowers in a timely manner in line with regulatory requirements and Central Bank expectations. The Central Bank has also confirmed that there is no regulatory impediment to lenders offering payment breaks to borrowers at this time, providing they are appropriate for the individual borrower circumstance. With regard to primary dwelling mortgages, the Deputy may wish to note that it is open to lenders to put temporary arrangements in place to assist a borrower who are experiencing repayment difficulties pending the more detailed consideration and assessment of an individual mortgage case under the CCMA Mortgage Arrears Resolution Process.

I will continue to work with the Central Bank, as regulator, to ensure that the Central Bank consumer protection and other applicable frameworks will be fully available to all borrowers that will still need support.

Covid-19 Pandemic

Questions (202)

Michael Lowry

Question:

202. Deputy Michael Lowry asked the Minister for Finance if costs accrued by businesses that have adopted the use of rapid antigen tests as part of their Covid-19 prevention measure and for the diagnosis of Covid-19 within their workforce will be considered a tax deductible expense by the Revenue Commissioners; and if he will make a statement on the matter. [6602/21]

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Written answers (Question to Finance)

The Deputy will be aware that, since the COVID-19 pandemic started, the Revenue Commissioners have regularly reviewed all COVID-19 related matters. They have also published guidance to assist taxpayers in meeting their tax obligations and to make them aware of the additional supports that the Government has introduced.

The Revenue Commissioners inform me that taxable trading and professional income is computed based on accounting profits as adjusted to conform with tax law. While tax law specifically disallows deductions for certain expenses, the central test of deductibility is whether the expense has been “wholly and exclusively laid out or expended for the purposes of the trade or profession”. Therefore, where businesses incur COVID-19 related costs of a revenue nature and where those costs were incurred to allow the business to carry on its trade or profession, they will be deductible in computing taxable profits. In addition, eBrief No. 004/21 confirmed that no benefit-in-kind charge will arise for employees in respect of COVID-19 testing where the conditions outlined in that eBrief are satisfied. This concessional benefit-in-kind treatment will remain in place until the Revenue Commissioners advise otherwise.

However, while tax law may permit a deduction for these costs, it is vital that all businesses fully comply with the Government’s Resilience and Recovery 2020 – 2021: Plan for living with COVID-19. As the Deputy is aware, this Plan sets out five levels that correspond to the severity of COVID-19. Under the current Level 5 public health restrictions, all employees should be facilitated to work from home, unless their work is an essential health, social care or other essential service that cannot be done from home. I would urge all employers to follow the latest public health advice and encourage them to make use of the relevant guidance such as that published by the Health and Safety Authority.

Revenue Commissioners

Question No. 204 answered with Question No. 193.

Question No. 205 answered with Question No. 187.

Questions (203)

Catherine Murphy

Question:

203. Deputy Catherine Murphy asked the Minister for Finance the number of gaming machines seized by the Revenue Commissioners under section 43 of the Finance Act 1975 in each of the years 2016 to 2020, in tabular form. [6613/21]

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Written answers (Question to Finance)

I am advised that Revenue began a nationwide compliance project in 2017 in relation to the gaming and amusement sector. The main aims of this project (ongoing) are to ensure maximum licensing compliance in the sector and to provide assurance to the legitimate trade.

Since the project began there has been a significant increase in licensing compliance by operators in areas where gaming is permitted. For example, the number of licensed gaming machines increased from just over 6,000 in 2016 to almost 14,000 in 2019, thereby reducing the need for seizure operations. Gaming machine license fees also increased from €1.84m in 2016 to €3.3m in 2019. The 2020 figures of almost 5,000 licenses issued and €1.4m license fees collected were very significantly reduced due to COVID-19 related trading restrictions across the gaming industry.

Revenue has confirmed that the number of gaming machines seized during the years 2016 to 2020 is as set out in the table below. The seizures in 2020 were completed in the early part of the year prior to COVID-19 restrictions commencing.

Year

No. of seizures

2016

0

2017

0

2018

157

2019

259

2020

130

Question No. 204 answered with Question No. 193.
Question No. 205 answered with Question No. 187.

Tax Appeals Commission

Questions (206)

Darren O'Rourke

Question:

206. Deputy Darren O'Rourke asked the Minister for Finance the estimated full year cost of recruiting two additional full-time IT specialists at the grade of assistant principal officer for the Tax Appeals Commission; and if he will make a statement on the matter. [6676/21]

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Written answers (Question to Finance)

Section 20 of the Finance (Tax Appeals) Act 2015, as amended, provides that the staff of the Tax Appeals Commission (TAC) are civil servants and as such their salary is as per the published civil service pay scales. The latest pay scales of civil servants at all grades (including Assistant Principal Officer) are provided at the following link: https://www.gov.ie/en/circular/39b2c-circular-12-2020-application-of-1st-of-october-2020-pay-adjustments/.

The starting point of the salary of an Assistant Principal Officer is currently €69,012. Therefore the estimated full year cost of recruiting two additional full-time IT specialists at the grade of Assistant Principal Officer for the TAC is €138,024 (excluding employer’s PRSI) or €153,276 (including employer’s PRSI of 11.05%). The estimate assumes that the recruited IT specialists are new entrants to the Civil Service.

The TAC have sanction for 35 staff in 2021, including 7 Appeal Commissioners. The staffing needs of the Tax Appeals Commission are continuously reviewed, taking account of workloads, management priorities and the ongoing need to respond to changing demands.

The TAC currently employs one full-time IT specialist at the grade of Assistant Principal Officer and another at the grade of Higher Executive Officer which, I am informed, meets its current requirements with no need for additional staff in this area.

Motor Insurance

Questions (207)

Niamh Smyth

Question:

207. Deputy Niamh Smyth asked the Minister for Finance the status of his plans to implement reforms in view of the increasing cost of car insurance premiums; the latest discussions his Department has had on the issue; the persons or bodies with which the discussions took place; and if he will make a statement on the matter. [6706/21]

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Written answers (Question to Finance)

The Government’s Action Plan for Insurance Reform contains a range of deliverables, including legislation where required, in a number of Government Department policy areas. Work is already underway in relation to certain areas, including:

- increasing market transparency through the National Claims Information Database (NCID), including for employer and public liability insurance;

- reviewing the duty of care legislation;

- providing for the Judicial Council’s accelerated adoption by 31 July 2021 of new personal injuries guidelines to replace the Book of Quantum;

- consideration by the Department of Justice of the Law Reform Commission’s recent Report on Capping Damages in Personal Injuries Actions;

- looking at how to further enhance the role of the Personal Injuries Assessment Board; and,

- making proposals on increasing competition in the Irish insurance market.

In addition to this work, there has been recent intensive engagement with key stakeholders by Minister of State Fleming, including meetings with the major insurers, the Alliance for Insurance Reform and industry representatives Insurance Ireland.

With regard to the specific issue of the cost of motor insurance premiums, I would draw the Deputy’s attention to data from the Central Bank’s NCID Private Motor Insurance Report, published in November. This shows the earned premium for private motor insurance decreased by 9 per cent to the end of 2019 from its mid-2018 peak. I would reasonably expect that the next report – covering 2020 – will show further reductions. Separately, the most recent data from the Central Statistics Office’s (CSO) Consumer Price Index indicates that motor premiums have reduced by just over 30 per cent from their July 2016 peak. While for methodological reasons, these datasets are not directly comparable, both have indicated the same downward trend for some time. This in part reflects the positive work done by the Cost of Insurance Working Group, and it is the Government’s intention to build on this success via the new Action Plan.

In conclusion, seeking to secure a more sustainable and competitive market through deepening and widening the supply of insurance in Ireland remains a priority issue for this Government. Both I and Minister of State Fleming will continue to play a lead role in this policy area.

Motor Insurance

Questions (208, 223)

Niamh Smyth

Question:

208. Deputy Niamh Smyth asked the Minister for Finance the position regarding vehicle insurance payments for those who have been cocooning due to Covid-19; the rebate options open to them; and the details of same. [6725/21]

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Gerald Nash

Question:

223. Deputy Ged Nash asked the Minister for Finance his plans to ensure insurance companies provide rebates and premium reductions to customers in the case of a decline of claims costs related to Covid-19; and if he will make a statement on the matter. [7018/21]

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Written answers (Question to Finance)

I propose to take Questions Nos. 208 and 223 together.

At the outset, working to protect insurance policyholders during and after the COVID-19 crisis is a priority issue for Government. As such, it is included within the Programme for Government and the recently launched Action Plan for Insurance Reform. Since the onset of the COVID-19 pandemic, I have consistently called on insurers to treat their customers honestly, fairly and professionally.

I can assure the Deputies that both Minister of State Fleming and I have had extensive engagement with motor insurers and other key policy stakeholders throughout 2020 and that this will continue into 2021. At my meeting with Insurance Ireland in April 2020, I called on insurers to be pro-active and generous in relation to their treatment of motor insurance customers during the COVID-19 crisis. In particular, I noted what was likely to be a significant reduction in claims for this period due to the travel restrictions that were in place at that time. This ultimately resulted in a number of insurers announcing a range of forbearance measures and motor insurance rebates for policyholders. In addition, insurers have agreed to further review the situation if extended Covid-19 restrictions on movement result in sustained lower road usage and claims frequency this year.

Most recently as part of a comprehensive engagement on the Government’s insurance reform agenda with a wide range of stakeholder interests, including Insurance Ireland, Minister of State Fleming concluded a series of meetings with the main Irish insurers. He again raised the need for industry to respond to both the Government’s ongoing reforms and COVID-19 pandemic by lowering premiums, to continue to offer forbearance measures, and to expand their risk horizon (such as providing more cover for younger drivers).

While Insurance Ireland recently announced a continuance of forbearance measures on behalf of a number of its members, including a number of measures directly targeting motor insurance policyholders, both I and Minister of State Fleming will continue to raise this issue with insurers in the coming weeks, particularly in light of the stricter restrictions on movement currently in place as a result of Government measures to combat the pandemic.

Finally, the Deputy has asked about rebates for those that have been cocooning, due to their cars being off the road. The methodology of any 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.

Covid-19 Pandemic

Questions (209)

Seán Canney

Question:

209. Deputy Seán Canney asked the Minister for Finance if he will mediate with insurance companies that offer self-build insurance to request that they extend the policies at no extra cost to the consumer for the period of the construction lockdown; and if he will make a statement on the matter. [6758/21]

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Written answers (Question to Finance)

At the outset, I understand that the current COVID-19 restrictions may be having an impact upon those currently undertaking self-build projects. With regard to insurance and the need to extend such cover at no extra cost, it is important to note that neither I, nor the Central Bank of Ireland, can intervene in the provision or pricing of insurance products or have the power to direct insurance companies to provide cover to specific individuals or businesses. This position is reinforced by the EU framework for insurance (the Solvency II Directive) which expressly prohibits Member States from doing so.

I understand that self-build insurance policies can contain a number of elements, such as: protection for the building(s) under construction; employers liability; public liability, plant cover; temporary dwelling and caravan cover; and so on. This will vary by policy and by company. It may be difficult for an insurer, from a risk and prudential basis, to extend such policies at no extra cost where some aspects of the policy remain ‘live’ despite the ongoing restrictions on construction as a result of the COVID-19 pandemic measures.

Notwithstanding this, the Deputy will be aware that both Minister of State Fleming and I have consistently and publicly stated that in the context of COVID-19 we expect insurance firms to treat their customers fairly, honestly, and in accordance with the Central Bank’s Consumer Protection Code. The Government will continue to work to protect customers during and after the COVID-19 crisis, and engage with the insurance industry in relation to how it responds to the needs of its customers. This commitment is included in the Programme for Government.

Finally, where somebody feels they have been treated unfairly by a particular insurance provider, they have the option of making a complaint to the Financial Services and Pensions Ombudsman (FSPO). The FSPO 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.

Value Added Tax

Questions Nos. 211 to 213, inclusive, answered with Question No. 187.

Questions (210)

Steven Matthews

Question:

210. Deputy Steven Matthews asked the Minister for Finance his views on the classification of fruit juices produced in Ireland for VAT purposes, which entails the standard 21% VAT rate being applied; if the position can be reviewed in view of the programme for Government commitment to encourage greater expansion and growth in the Irish horticulture sector; and if he will make a statement on the matter. [6766/21]

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Written answers (Question to Finance)

I am advised by Revenue that the VAT rating of goods and services is subject to the requirements of the EU VAT Directive with which Irish VAT law must comply. In accordance with the Directive, Ireland maintains a standstill provision which permits the retention of the zero rate for certain food and drink products that were liable to the zero rate on 1 January 1991. This standstill provision cannot be extended.

The Value-Added Tax Consolidation Act, 2010 provides for the application of the zero rate to food and drink, but specifically excludes juice extracted from, and other drinkable products derived from, fruit or vegetables. Accordingly, fruit juice is taxable at the standard rate. However, where fruit juice is provided as part of a restaurant or catering service it is liable to VAT at the second reduced rate of VAT, currently 9%.

Under Annex III of the EU VAT Directive, Member States are permitted to apply a reduced rate of VAT of not less than 5% to fruit juice. However, Ireland has a significantly wider range of goods and services taxed at the zero and reduced rates of VAT compared with other EU member states, and I have no plans to narrow the tax base further. Notwithstanding their sugar content, fruit juices are exempt from the Sugar Sweetened Drinks Tax.

Questions Nos. 211 to 213, inclusive, answered with Question No. 187.

Cycle to Work Scheme

Question No. 215 answered with Question No. 187.

Questions (214)

Holly Cairns

Question:

214. Deputy Holly Cairns asked the Minister for Finance his views on adjusting the cycle-to-work scheme to cover the purchasing of child seats or trailers; and if he will make a statement on the matter. [6883/21]

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Written answers (Question to Finance)

Section 118(5G) of the Taxes Consolidation Act 1997 provides for the cycle to work scheme. This scheme provides an exemption from benefit-in-kind where an employer purchases a bicycle and associated safety equipment up to a maximum of €1,500 for e-bikes and €1,250 for other bicycles for an employee to use, in whole or in part, to travel to work. These thresholds were increased from 1 August 2020 under the Financial Provisions (Covid-19) (No. 2) Act 2020. Safety equipment includes helmets, lights, bells, mirrors and locks but does not include child seats or trailers.

The inclusion of child seats and trailers in the scheme would create an additional cost and that cost must be recovered elsewhere. I have no plans at present to make changes to the cycle to work scheme to include child seats and trailers.

Question No. 215 answered with Question No. 187.

Customs and Excise

Questions (216)

Catherine Murphy

Question:

216. Deputy Catherine Murphy asked the Minister for Finance the amount of items (details supplied) that have been seized by customs officials in the past five years to date in 2021; the way in which they dispose of such materials; and the number of full-time, part-time and contractor Department of Agriculture, Food and the Marine staff that are attached to the customs section of the Revenue Commissioners. [6935/21]

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Written answers (Question to Finance)

I am advised by Revenue that regulation of the importation of animal medication is a matter for the Department of Agriculture, Food and the Marine and as a result, Revenue has not seized any of the items specified in the last five years. I am further advised that Revenue officials refer all declarations of animal medication to officers from the Department of Agriculture, Food and the Marine for examination, control, investigation and subsequent seizure, as required.

While staff from the Department of Agriculture, Food and Marine work closely with Revenue Customs Officers based at frontier stations, they are independent of Revenue and no such staff are attached to Revenue’s operations at these stations.