Duncan Smith
Question:83. Deputy Duncan Smith asked the Minister for Transport his plans regarding an extension to the driver licence renewal dates; and if he will make a statement on the matter. [9261/21]
View answerDriver Licences
Questions (83)
Written answers
Due to the resurgence of Covid 19 in Europe as well as in Ireland, the extension of driving licences is currently under consideration at EU level. A decision on this issue is expected shortly.
Driver Test
Questions (84)
Duncan Smith
Question:84. Deputy Duncan Smith asked the Minister for Transport his plans to reduce the backlog of those waiting to sit the driver test; and if he will make a statement on the matter. [9262/21]
View answerWritten answers
My Department is in constant contact with the Road Safety Authority since the start of the pandemic regarding all of its services, the impact of Covid-19 on those services, and how they can best be maintained in the current circumstances.
Due to suspension of driver testing services in the initial pandemic response, along with the health protocols required since the resumption of services, a significant backlog has developed. During Level 5, driving tests are only available to those involved in essential services.
While the service is limited during level 5 restrictions, the Road Safety Authority is examining ways of increasing the number of tests within health constraints with an eye to resuming wider testing after level 5.
Sanction has recently been provided to hire 40 additional temporary driver testers, along with 36 approved for retention or rehire in 2020. The position will be kept under review when services resume.
These measures will help to increase testing capacity. However, I would like to stress, that many of the issues impacting on the delivery of service are concerned with the throughput of centres themselves in light of the restrictions, rather than on the availability of staff.
The RSA are also looking at a number of other measures, including whether the number of tests a driver tester can perform each day can be increased when restrictions ease, subject to health assurances.
The Department has ongoing discussions with the RSA on how to return to the normal target for the maximum waiting time, which is around ten weeks. It is clear that it will not be possible to arrive at this quickly, given restraints which must be in place due to the pandemic. It is important to recognise that there are no quick fixes and that the continuing build-up of applications as the pandemic goes on means that it will take time to return to normal waiting periods.
Driver Test
Questions (85)
Duncan Smith
Question:85. Deputy Duncan Smith asked the Minister for Transport his plans to reduce the backlog of those waiting to sit the driver theory test; and if he will make a statement on the matter. [9263/21]
View answerWritten answers
The Driver Theory Test (DTT) has not been classified as an essential service by Government and consequently it has had to be suspended in light of Level 5 Covid-19 restrictions. All Driver Theory Tests will remain suspended for the duration of level 5 restrictions. The Driver Theory Test will not be conducted for essential workers while we remain in level 5.
While I fully appreciate the inconvenience this poses to learners, I am sure you will agree with me that the limiting of the spread of the virus and the safeguarding of public health must take first priority here.
The Road Safety Authority has advised my office that it is engaging with its service provider to maximise capacity to offer tests while adhering to occupational and public health requirements for when services are resumed. In this regard, they would, for example, be opening on additional days at some centres and extended hours also provided to allow additional capacity for appointments.
The Driver Theory Test service has recently launched a pilot phase of a new initiative, which offers a Remote Testing service for specific categories of Theory Test (C, D, CD, BMT, TMT, ADI, CPCB, CPCT). Following a review of the pilot phase, I understand the RSA expect the initiative to be extended for car and motorcycles.
The RSA are keen to progress and extend the service to all categories of Driver Theory Test, however scaling up operations to facilitate higher numbers will take time to achieve.
Driver Licences
Questions (86)
Duncan Smith
Question:86. Deputy Duncan Smith asked the Minister for Transport the way in which his Department proposes to facilitate medically vulnerable persons to renew their driver licence during the Covid-19 pandemic in circumstances in which they do not have a public services card. [9264/21]
View answerWritten answers
Due to the resurgence of Covid-19 in Europe as well as Ireland, further extensions of driving licences are currently under consideration at EU level. A decision on this issue is expected shortly. This extension, when agreed, will allow those who cannot apply for a licence in person due to the Level 5 restrictions to continue to drive for the period of the extension.
Motor Tax
Questions (87)
Niamh Smyth
Question:87. Deputy Niamh Smyth asked the Minister for Transport the motor tax fees collected by his Department by county and month in 2020, in tabular form; and if he will make a statement on the matter. [9275/21]
View answerWritten answers
The information requested is being compiled and will be forwarded to the Deputy in accordance with Standing Orders.
Tax Reliefs
Questions (88)
Kathleen Funchion
Question:88. Deputy Kathleen Funchion asked the Minister for Finance if State employees who have worked from home since March 2020 can claim the work from home tax relief through the Revenue Commissioners; and if not, if this scheme is being administered through the payroll. [9200/21]
View answerWritten answers
Where e-workers incur certain extra expenditure in the performance of their duties of employment remotely or from home, such as additional heating and electricity costs, there is a Revenue administrative practice in place that allows an employer to make payments up to €3.20 per day to such employees, subject to certain conditions, without deducting PAYE, PRSI, or USC. Revenue have confirmed that PAYE workers using their primary residence as a workplace during Covid-19 restrictions qualify as e-workers for the purposes of this practice.
This administrative practice has been in place for some time and the choice of whether to make the payment of €3.20 is at the discretion of the employer. The value of relief allowed under the Irish system is already considered sufficient to cover any legitimate additional costs incurred by workers. The level of support allowed also compares favourably internationally: at €3.20 per day up to €16 per week or €832 per annum may be paid tax free. For comparison purposes, the weekly rate in the UK is just £6 per week or a maximum of £312 per annum.
Revenue also advise that the provision of equipment, such as computers, printers, scanners and office furniture by the employer to enable the employee work from home will not attract a Benefit-In-Kind charge, where the equipment is provided primarily for business use. The provision of a telephone line, broadband and such facilities for business use will also not give rise to a Benefit-in-Kind charge, where private use of the connection is incidental.
The question of whether a State employer covers these costs, or makes a remote working payment is a matter for my colleague, the Minister for Public Expenditure and Reform.
Where an employer does not pay €3.20 per day to an e-worker, employees retain their statutory right to claim a deduction under section 114 of the Taxes Consolidation Act (TCA) 1997 in respect of actual vouched expenses incurred wholly, exclusively and necessarily in the performance of the duties of their employment. PAYE employees are entitled to claim costs such as additional light and heat in respect of the number of days spent working from home, apportioned on the basis of business and private use.
As I announced on Budget day, in addition to these existing measures, Revenue have agreed to allow broadband to qualify for this relief. This apportionment is based on the number of days the person spent working from home in the year with 30% of the apportioned value accepted by Revenue as related to work in the home.
PAYE workers can claim e-working expenses by completing an Income Tax return at year end. Revenue advise that the simplest way for taxpayers to claim their e-working expenses and any other tax credit entitlements is by logging into the myAccount facility on the Revenue website.
Revenue have published detailed guidance on e-working arrangements in their Tax and Duty manual TDM 05-02-13 e-Working and Tax which may be viewed at the following link:
https://www.revenue.ie/en/tax-professionals/tdm/income-tax-capital-gains-tax-corporation-tax/part-05/05-02-13.pdf
Finally, the national remote working strategy: Making Remote Work, commits the Tax Strategy Group to reviewing the current tax arrangements for remote working in respect of both employees and employers. The Tax Strategy Group will take account of the economic, financial and organisational implications arising from the experience of remote working during the pandemic, and assess the merits of further enhancements for consideration in the context of Budget 2022.
Economic Policy
Questions (89)
Bernard Durkan
Question:89. Deputy Bernard J. Durkan asked the Minister for Finance the degree to which he continues to monitor the double impact of Covid-19 and Brexit on the economy; the extent to which measures in place or anticipated are sufficient to address these issues; and if he will make a statement on the matter. [9310/21]
View answerWritten answers
The interplay between the Covid-19 and Brexit shocks has implications for the economic outlook. In preparation for last year’s Budget, my Department, along with the ESRI, conducted an analysis of the sectoral overlap between the two shocks. The analysis found that the sectors most exposed to both Covid-19 and a ‘disorderly’ Brexit appear to be distinct and relatively unconnected. While the analysis was based on the assumption of a ‘disorderly’ Brexit, this general conclusion is still applicable today.
Although the Trade and Cooperation Agreement between the EU and the UK provides for zero-tariffs and zero-quotas for qualifying goods, it will nevertheless introduce trade frictions in the form of non-tariff barriers. It is also a considerable ‘step-down’ in terms of services trade relative to the previous EU-UK relationship, which is significant as Ireland exports considerably more services than goods to the UK. Therefore, while the agreement protects Irish firms from the more significant impact of a ‘disorderly’ Brexit scenario, they will still be impacted by the change in trading arrangements. Thus, it represents a smaller Brexit shock for the same sectoral mix of Irish firms as under a no-deal scenario.
Using this analysis, my Department’s Budget 2021 forecasts accounted for the dual impact of the Covid-19 pandemic and a ‘no-deal’ Brexit on the Irish economy. However, the earlier than anticipated roll-out of Covid-19 vaccines and the Trade and Cooperation Agreement between the EU and the UK represent upsides to the outlook this year, though the re-introduction of Level 5 restrictions will have an offsetting negative effect.
The government has provided an enormous amount of fiscal support in response to the Covid-19 and Brexit crises. At just under €40 billion, the cumulative level of fiscal support made available in 2020 and 2021 has been unprecedented. Using counter-cyclical fiscal policy in this way has been the most appropriate course of action and was made possible only by the prudent management of the public finances in recent years. As the public health situation improves, we will have to move to a more sustainable fiscal trajectory. The Department will publish its medium-term macroeconomic and fiscal forecast with the Stability Programme Update in spring this year setting out the trajectory towards a more sustainable fiscal position.
Covid-19 Pandemic Supports
Questions (90)
Neale Richmond
Question:90. Deputy Neale Richmond asked the Minister for Finance if there is scope to extend the backdating of the Covid restrictions support scheme further than eight weeks to encompass companies that had issues with the initial application; and if he will make a statement on the matter. [9028/21]
View answerWritten answers
The CRSS is a targeted support for businesses significantly impacted by restrictions introduced by the Government under public health regulations to combat the effects of the Covid-19 pandemic. The support is available to companies, self-employed individuals and partnerships who carry on a trade or trading activities, the profits from which are chargeable to tax under Case I of Schedule D, from a business premises located in a region subject to restrictions introduced in line with the Living with Covid-19 Plan.
Details of CRSS are set out in Finance Act 2020 and detailed operational guidelines, which are based on the terms and conditions of the scheme as set out in the legislation, have been published on the Revenue website at: https://www.revenue.ie/en/corporate/press-office/budget-information/2021/crss-guidelines.pdf
Where a business is eligible to make a claim under the CRSS, a claim may be made through the Revenue Online System (ROS). A claim may be made up to eight weeks from the date on which a claim period commences, which in most cases will be the first day on which the Covid restrictions apply to the business concerned. Where Covid restrictions continue to apply to the business beyond a period of three weeks, the eight-week time limit applies from the first day of each three-week period for which the Covid restrictions continue to apply to the business.
In order to make a claim, a business must first register for CRSS via the eRegistration system on ROS. A person must have an up to date tax clearance certificate in order to successfully register. As part of the registration process, the person will be required to provide certain information in relation to the business premises and turnover. In some cases, the registration may not be completed within the eight-week time period for making a claim for payment under CRSS. This might arise where the registration application is made towards the end of the eight-week time limit or where Revenue requests additional information in connection with the application. In these circumstances, to ensure that a business is not adversely affected, and provided the business applies to be registered within the eight-week time period and provides the required information as part of the registration process, the business will be able to make a claim within three weeks of being registered for CRSS where this is later than the expiry of the eight-week time limit.
Covid-19 Pandemic Supports
Questions (91)
Richard Bruton
Question:91. Deputy Richard Bruton asked the Minister for Finance if a mechanism exists within the scope of the Covid restrictions support scheme, CRSS, to suspend, pause or cease receipt of payment of the direct support in order to make an application without penalty for support under the tourism business continuity scheme administered by Fáilte Ireland in the case of a business affiliated with an organisation (details supplied) that was not eligible for a full Covid restrictions support scheme payment but is in receipt of a partial payment towards sustaining their business costs during Covid restrictions; if no such mechanism exists, if he will request that officials in his Department contact the Office of the Revenue Commissioners and Fáilte Ireland to facilitate this mechanism; and if he will make a statement on the matter. [9046/21]
View answerWritten answers
The CRSS is a targeted support for businesses significantly impacted by restrictions introduced by the Government under public health regulations to combat the effects of the Covid-19 pandemic. The support is available to companies, self-employed individuals and partnerships who carry on a trade or trading activities, the profits from which are chargeable to tax under Case I of Schedule D, from a business premises located in a region subject to restrictions introduced in line with the Living with Covid-19 Plan.
Where a business is eligible to make a claim under the CRSS, a claim may be made through the Revenue Online System (ROS). A claim may be made through ROS up to eight weeks from the date on which a claim period commences, which in most cases will be the first day on which the Covid restrictions apply to the business concerned. Where Covid restrictions continue to apply to the business, a new claim is required every three weeks.
The Tourism Business Continuity Scheme (TBCS) was recently launched by the Minister for Tourism, Culture, Arts, Gaeltacht, Sport and Media to provide support for tourism businesses which have not received Covid-19 support from other schemes. I understand that the businesses which are eligible for the CRSS at any level of restrictions or for any portion of their business are not eligible for the TBCS. I should also point out that businesses eligible for the Fáilte Ireland Coach Tourism Business Continuity or the Ireland Based Inbound Agents Business Continuity Scheme are not eligible to apply for the TBCS.
It is not intended to create a situation in which businesses can “shop around” to find the scheme which results in them receiving the greatest support but my officials will consider the matter further in conjunction with Revenue and Fáilte Ireland and the Department of Tourism, Culture, Arts, Gaeltacht, Sport and Media.
I also understand that the TBCS eligibility does not mean an entitlement to funding, which is at the sole discretion of Fáilte Ireland, rather it means eligibility to make an application for grant funding.
Disabled Drivers and Passengers Scheme
Questions (92)
Cathal Crowe
Question:92. Deputy Cathal Crowe asked the Minister for Finance if the recent changes in vehicle registration tax, VRT, will be expanded in order that they are reflected in exemption relief on VRT and VAT as it pertains to disability access vehicles (details supplied). [9054/21]
View answerWritten answers
The Disabled Drivers & Disabled Passengers Scheme provides relief from VRT and VAT on the purchase and use of an adapted car, as well as an exemption from motor tax and an annual fuel grant. Details of these reliefs and the grant in respect of fuel usage are available on the Revenue website at the following link: https://www.revenue.ie/en/importing-vehicles-duty-free-allowances/guide-to-vrt/reliefs-and-exemptions/scheme-for-persons-with-disabilities.aspx
The relief from Value Added Tax and Vehicle Registration Tax are generous in nature amounting to up to €10,000, €16,000 or €22,000, depending on the level of adaption required for the vehicle.
It should be noted that the new VRT charging table does not necessarily result in increased VRT rates. VRT is an emissions-based tax and therefore the amount of VRT incurred will vary across different vehicle makes and models. Typically, the new rates structure will result in increases for high emission vehicles, and decreases for lower emission vehicles.
Banking Sector
Questions (93, 97, 98)
Alan Dillon
Question:93. Deputy Alan Dillon asked the Minister for Finance if his attention has been drawn to plans to make an exemption for negative interest rates on solicitor client accounts, in particular, client monies being held from mortgages while a purchase is being concluded; and if he will make a statement on the matter. [9070/21]
View answer
John McGuinness
Question:97. Deputy John McGuinness asked the Minister for Finance if he will raise with banks (details supplied) and the Central Bank the issue of the negative consequences of the decision to charge negative interest rates on solicitor client accounts largely affecting those buying or selling houses and land; and if he will make a statement on the matter. [9236/21]
View answer
Gerald Nash
Question:98. Deputy Ged Nash asked the Minister for Finance his views on the proposed imposition of charges, so called negative interest, by banks (details supplied) on transaction monies held in solicitor client accounts for clients and consumers; if he plans to address this matter given the State's shareholding in both banks; and if he will make a statement on the matter. [9242/21]
View answerWritten answers
I propose to take Questions Nos. 93, 97 and 98 together.
As the Deputy is aware, as Minister for Finance I have no role in the day to day operations of any bank operating within the State including banks in which the State has a shareholding. I'm precluded from intervening on behalf of any individual customer in any particular bank. Decisions in relation to commercial matters are the sole responsibility of the board and management of the banks, which must be run on an independent and commercial basis. The independence of banks in which the state has a shareholding is protected by Relationship Frameworks which are legally binding documents that cannot be changed unilaterally. These frameworks, which are publicly available, were insisted upon by the European Commission to protect competition in the Irish market.
The application of interest rate charges is solely a commercial matter for the board and management of each bank.
Deposit balances and liquidity in general has risen significantly across the banking system in Europe in recent years as the ECB has continued to provide additional funds through their asset purchase schemes and long term refinancing operations. This has been further exacerbated by the Covid19 pandemic as households continue to stay at home and save and businesses defer investment decisions. This excess liquidity which has grown significantly in the European system has to go somewhere and in large part it gets placed back on deposit with the ECB who charge the banks -0.50%. The application of negative deposit rates by the ECB has resulted in European banks incurring a consequent cost on deposit accounts. The Irish banks are impacted in a similar way to their European counterparts. The banks across Europe have looked to pass some of the costs associated with negative rates to deposit holders with larger balances. The Irish banks are no different in this regard.
In passing on some of these costs it is important to note that banks cannot differentiate between customers in different sectors and for that reason the approach taken is to apply charges based on the size of the deposit balance.
Grant Payments
Questions (94)
Seán Sherlock
Question:94. Deputy Sean Sherlock asked the Minister for Finance the contact details for the sections that deal with all ongoing and established grant funding in his Department and in each agency under the remit of his Department in tabular form. [9128/21]
View answerWritten answers
Contact details in respect of the Disabled Drivers and Disabled Passengers Fuel Grant Scheme, which is administered by my Department, are in the table below. None of the bodies under the aegis of my Department manage grant funding.
|
Grant Scheme |
Contact Details |
|
Disabled Drivers and Disabled Passengers Fuel Grant Scheme |
Indirect Tax Policy Section 076-1007729 |
Covid-19 Pandemic Unemployment Payment
Questions (95)
Claire Kerrane
Question:95. Deputy Claire Kerrane asked the Minister for Finance the tax implications for those in receipt of the pandemic unemployment payment, PUP, who return to work in 2021 with regard to tax credits and standard rate cut-off points; and if he will make a statement on the matter. [9176/21]
View answerWritten answers
The Pandemic Unemployment Payment (PUP) is a social welfare payment for workers who have become unemployed due to the COVID-19 pandemic. PUP payments are classified in legislation as income supports and are subject to income tax. The taxation arrangements for the PUP were legislated for in Finance Act 2020 which reflects the standard approach to taxation of social welfare type payments, which means they are liable to income tax but exempt from the Universal Social Charge (USC) and Pay Related Social Insurance (PRSI).
The PUP along with the Temporary Wage Subsidy Scheme (TWSS) were introduced in March 2020 as emergency measures to deal with the impact of the COVID-19 pandemic on the economy. The Government objective at that time was to get much needed assistance to employees as quickly as possible. To meet that objective, both subsidies were not taxed in ‘real-time’ in the normal manner, meaning the collection of any tax due was deferred until year end. This approach was based on an expectation at the time that the emergency supports would be short-term in nature, which turned out to not be the case due to the continued prevalence of COVID-19.
The replacing of the TWSS with the EWSS from 1 September 2020 and the continuation of both that scheme and the PUP into 2021 has re-established the practice of operating PAYE in the normal (real-time) manner for such payments. However, those people receiving PUP payments in 2021 will only pay tax when they return to work. The mechanism to tax PUP payments is by reducing the recipient’s tax credits and rate bands. Revenue has published information on the taxation of the PUP at the following link www.revenue.ie/en/life-events-and-personal-circumstances/pup-tax-liability/index.aspx, which may be of interest to the Deputy.
When a PUP recipient returns to work, he or she should immediately cease the PUP claim with the Department of Social Protection (DSP). In turn, DSP will notify Revenue that the payment has ceased, and Revenue will then adjust the employee’s tax credits accordingly. For a person in receipt of the PUP at the start of the year, the weekly amount is annualised on the Tax Credit Cert (TCC), with knock on impacts on the tax credit and standard rate cut off point, as if that person will be on the PUP for the full year. When the person comes off PUP, the TCC is amended to reflect the fact that the payment has ceased. A revised instruction (Revenue Payroll Notification) will issue to the relevant employer to reflect the updated position and the revised TCC will issue to the employee via the online myAccount service.
Revenue has confirmed to me that income tax is normally calculated using the ‘cumulative basis’, which means that for each pay day, all earnings and all tax credits are accumulated, and the tax due is calculated on a year to date basis. This ensures employees pay the correct amount of tax as it falls due. In exceptional circumstances, employees may be placed on the ‘Week 1’ basis (also known as the ‘non-cumulative basis’). This normally occurs where there is a large reduction in tax credits that could cause financial hardship or where there is a lack of information on prior employments within the current tax year. Where employees are placed on a ‘Week 1’ basis, income tax is deducted on a pay-period to pay-period arrangement, without reference to previous pay or tax paid. As such, the employee will not suffer a large deduction of tax in a pay-period but will also not receive any refunds that might be due until the ‘cumulative basis’ is implemented. These normal taxing arrangements are operating in respect of PUP payments received by employees in 2021 and are in accordance with the legislation as set down.
Specifically, regarding the taxation of PUP, the following points are also relevant:
- A single person currently in receipt of the PUP will continue to receive the payment gross and tax is not collected from these payments until s/he returns to work. This is also the case where both married spouses/civil partners are receiving PUP;
- 50% of all PUP recipients are not on the highest rate of €350 per week. A single person’s weekly tax credits will fully cover any tax due on weekly PUP payments at the €203, €250 and €300 payment rates. For these rates, the employee will in fact have excess weekly tax credits of between €3.46 and €22.86 which will build up for the period s/he is out of work. This means that the employee will have additional tax credits to offset against income when s/he returns to work;
- For a single person in receipt of PUP of €350 per week, his/her weekly tax credits cover 90% of the tax payable, leaving tax due of approximately €6.50 per week.
- USC is not chargeable on PUP payments which will either fully or partially offset any tax impact on overall net wages.
Revenue advise me that, for example, if a single person is in receipt of the PUP from January 2021 to end of February 2021 before then returning to work (i.e. 8 payments of PUP at €350 per week = €2,800) the total outstanding tax due on the payments received at that point is approximately €52. By adjusting the employee’s tax credits, as outlined above, this, eliminates or reduces any liability at year end. Any such liability will also be fully or partly offset by the reduction in the total USC liability for the year because, as explained above, PUP payments are not liable to USC. In effect, this means that in most cases the net take home pay of PUP recipients that return to employment will be unaffected by the taxation measures.
The position for married couples/civil partners is slightly different. Where a couple is taxed under joint assessment and one spouse or civil partner is in receipt of the PUP but does not have sufficient tax credits to cover the tax due, the tax credits of the working spouse or civil partner are reduced to ensure that the balance of the tax is collected during the year. Effectively, the personal tax credit of the PUP recipient is not assigned to the working spouse in the usual manner as it is instead allocated to the excess PUP amount over and above the (PUP) recipient’s PAYE tax credit and rate band.
Finally, Revenue further advise me that in taxing PUP payments in accordance with the legislation, Revenue is seeking to ensure, as far as possible, that people do not end up with a tax liability at the end of 2021 that will have to be paid in future years, particularly where there is already an underpayment in respect of 2020. The alternative ‘year-end’ approach would result in employees having further underpayments in the years ahead in addition to their 2020 liabilities, which could cause financial difficulties for them down the road. The normal deduction arrangements now applying to both EWSS and PUP for 2021 insures against this, as tax credits are set aside for offset against any tax due. The arrangement also ensures an equity of tax treatment between those receiving the PUP and employees who are working and receiving similar levels of wages (although the person on PUP will have a lower USC liability).
Social and Affordable Housing
Questions (96)
Cian O'Callaghan
Question:96. Deputy Cian O'Callaghan asked the Minister for Finance the position of the Central Bank on the proposed shared equity loan scheme; and if he will make a statement on the matter. [9190/21]
View answerWritten answers
The Affordable Purchase Shared Equity Scheme is a policy initiative which falls under the remit of the Department of Housing, Local Government and Heritage following the allocation of €75m of funding as part of Budget 2021.
Officials in my Department have been providing on-going support and assistance to the Department of Housing, Local Government and Heritage and the Housing Agency in relation to the development of the scheme including interacting with the Central Bank, the Banking and Payments Federation (BPFI) and the participating banks. The scheme is being designed to respect the macro prudential rules and the views of the Central Bank will be carefully considered.
The Central Bank has provided the following statement:
“The Central Bank of Ireland is aware of plans by the Department of Housing, Local Government and Heritage to introduce an Affordable Housing Shared Equity Scheme. Any queries in respect of the Scheme should be referred to the Department. Upon finalisation of the scheme design, the Central Bank will consider the interaction between the scheme and the mortgage measures as well as the proposed operation of the scheme from the perspective of our consumer protection mandate.
The mortgage measures were introduced with the aim of strengthening the resilience of both borrowers and the banking sector. The Central Bank is committed to annually reviewing the calibration of the mortgage measures in the context of wider housing and mortgage market developments, to ensure that they continue to meet their objectives of:
- Increasing the resilience of banks and borrowers to negative economic and financial shocks
- Dampening the pro-cyclicality of credit and house prices so a damaging credit-house price spiral does not emerge.”
Questions Nos. 97 and 98 answered with Question No. 93.
Insurance Industry
Questions (99)
Emer Higgins
Question:99. Deputy Emer Higgins asked the Minister for Finance the progress made by his Department in tackling the high cost of insurance and the competitiveness of the insurance market here; and if he will make a statement on the matter. [9258/21]
View answerWritten answers
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.
Furthermore, the Deputy will be aware that parts of the Irish insurance market have experienced reduced competition in recent years due to withdrawals by several insurers and a curtailment of risk appetite in some market segments. In this regard, the Programme for Government includes a commitment to create an Office tasked with encouraging greater competition in the Irish insurance market. As part of the Action Plan, an Office to Promote Competition in the Insurance Market was subsequently established in my Department. At its first meeting on 15 December, chaired by Minister of State Fleming, the terms of reference for the Office were agreed and these are available on the Office’s webpage.
The Office will develop a strategic approach to the promotion of insurance competition; encourage transparency and champion the provision of information in relation to the insurance market and available products; tailor its approach reflecting the particular circumstances pertaining in the business sector and that of the wider consumer market which may have different priorities; and importantly provide for more joined-up policy thinking and communications. Minister of State Fleming will report on a regular basis to the Cabinet Sub-Group on Insurance Reform on the work of the Office.
In conclusion, it is important to remember that this Office is part of the Government's overall insurance reform programme which seeks to reduce insurance costs and increase the availability of insurance cover.
Value Added Tax
Questions (100)
Emer Higgins
Question:100. Deputy Emer Higgins asked the Minister for Finance the status of the operation of the VAT refund scheme for charities which he introduced; his views on the uptake of the scheme; and if he will make a statement on the matter. [9259/21]
View answerWritten answers
As the Deputy will be aware, I introduced the VAT Compensation Scheme in Budget 2018 to relieve the VAT burden on charities and to partially compensate them for the VAT paid on expenditure related to independently raised income on or after 1 January 2018. The scheme was not applicable to VAT paid in years prior to 2018.
The funding for the scheme is capped at €5 million per year and where the total amount of claims in any year exceeds this amount, refunds are paid to charities on a pro-rata basis. Charities can only make one claim per year in respect of the previous year, which must be submitted between 1 January and 30 June. For example, a claim in respect of 2018 had to be made between 1 January 2019 and 30 June 2019.
Revenue started accepting claims for the scheme in January 2019 in respect of eligible VAT paid by charities in 2018. A total of 1,143 claims were received for that year and as the total amount claimed exceeded the €5m fund, refunds were issued on a pro-rata basis, with the full fund allocated.
Last year, in response to the impact of the COVID-19 pandemic, the closing date for submission of claims was extended from 30 June 2020 to 31 August 2020. In total, 910 claims were received for that year and as the total amount claimed exceeded the €5m fund, refunds were issued on a pro-rata basis, with the full fund allocated.
Revenue is now accepting claims in respect of eligible VAT paid by charities in 2020 which must be submitted between 1 January and 30 June 2021.
As the scheme is now in its third year of operation, it is subject to review. Accordingly, officials of my Department and Revenue are engaged with the sector to review the operation of the scheme.
EU Funding
Questions (101)
Louise O'Reilly
Question:101. Deputy Louise O'Reilly asked the Minister for Finance if Ireland plans to apply for loans under the EU Recovery and Resilience Fund; and if he will make a statement on the matter. [9304/21]
View answerWritten answers
The Recovery and Resilience Facility (RRF) is the key element of the Next Generation EU / Recovery Plan Package of €750bn (€360bn in loans and €390bn in grants) agreed by the European Council in July 2020. The instrument accounts for the vast majority of that €750bn package (€672.5bn, made up of €360bn loans and €312.5bn in grants). It is a large scale financial support to public investments and reforms which aims to assist Member States to address the impact of Covid-19 and become more resilient for the future.
Ireland’s plan is being prepared by the Department of Public Expenditure and Reform working with the Department of the Taoiseach, the Department of Enterprise Trade and Employment, and my own Department. Work is ongoing in relation to the broad areas we are seeking funding for and the analysis is underway on the investment and reform projects which could be supported by the Recovery and Resilience Facility. Our plan will set out an ambitious but targeted programme of impactful, mature investments and reforms up to 2026.
The Recovery and Resilience Facility makes provision for lending by the European Commission to Member States. An application for a loan must be received by the European Commission before the end of 2023. No details of the loan agreements are available at this stage.
Consideration of whether Ireland should seek to avail of the loan element will take place once the Government consider the package of investment and reform projects and when the relevant information on loans becomes available from the European Commission. The Government will make a decision on a loan application at the appropriate time.