Written Answers Nos. 280-304
281. Deputy Peadar Tóibín asked the Minister for Finance if the help-to-buy scheme will be extended given that the private construction sector has been restricted due to the Covid-19 pandemic; and if he will make a statement on the matter. [12783/21]
View answerThe Help to Buy (HTB) incentive was introduced in 2017. The measure is currently scheduled to expire on 31 December 2021.
HTB gives a refund of Income Tax and Deposit Interest Retention Tax (DIRT) paid in Ireland over the previous four years, subject to limits outlined in the legislation. An increase in the supply of new housing remains a priority aim of Government policy.
The scheme is designed to stimulate the supply of new houses in the housing market and to assist first-time buyers in accumulating a deposit for a new home. In order to further help meet these goals, I announced an enhancement to the existing scheme with effect from 23 July last for the remainder of 2020 as part of the July Stimulus Package. The legislation that gives effect to this is set out in the Financial Provisions (Covid-19) (No.2) Act 2020. The Finance Act 2020 further extended the period of application of the enhanced levels of support until 31 December 2021.
The question of the future of HTB support beyond its current expiry date is a matter that will be considered in due course in the context of Budget 2022 and the subsequent Finance Bill.
282. Deputy Thomas Gould asked the Minister for Finance the process by which credit union members can call an annual general meeting; and if the process was affected by the Finance (Miscellaneous Provisions) Act 2020. [12787/21]
View answerThe Credit Union Act 1997 does not include any provision for credit union members to call an annual general meeting.
Section 78(2) of the Credit Union Act 1997 provides that the annual general meeting of a credit union in respect of any financial year to 30 September shall be held in the October, November, December or January following the end of that financial year. Section 78(3) provides that the Central Bank can convene an annual general meeting if the credit union itself has failed to do so.
The Finance (Miscellaneous Provisions) Act 2020 provides that the annual general meeting of a credit union for the financial year ended September 2020 may be held at any time during the interim period, which is set to expire on 30 April 2021. The interim period is extendable on the basis set out in the 2020 Act.
283. Deputy Thomas Gould asked the Minister for Finance the length of time that may lapse between annual general meetings before the board of a credit union is under an obligation to convene such a meeting; and if the matter was affected by the Finance (Miscellaneous Provisions) Act 2020 or any Covid-19 measures related legislation. [12788/21]
View answerSection 78(2) of the Credit Union Act 1997 provides that the annual general meeting of a credit union in respect of any financial year to 30 September shall be held in the October, November, December or January following the end of that financial year.
The Finance (Miscellaneous Provisions) Act 2020 provides that the annual general meeting of a credit union for the financial year ended September 2020 may be held at any time during the interim period, which is set to expire on 30 April 2021. The interim period is extendable on the basis set out in the 2020 Act.
Under normal circumstances, the maximum length of time that may lapse between annual general meetings is therefore 16 months. However, in respect of the financial year end 30 September 2020 only, given the extended time provided by which credit unions must hold their AGMs under the 2020 amendments, the maximum period of time that may lapse between the AGM for 2020 and the previous AGM (i.e. the AGM held in respect of the financial year end 30 September 2019) is 19 months.
284. Deputy Jennifer Whitmore asked the Minister for Finance the estimated amount spent on the EWSS for the childcare sector on a monthly basis since it was introduced; and if he will make a statement on the matter. [12820/21]
View answerThe Deputy will be aware that Section 28B of the Emergency Measures in the Public Interest (Covid-19) Act 2020 provides for the operation of the Employment Wage Subsidy Scheme (EWSS), which is an economy-wide enterprise support for eligible businesses in respect of eligible employees. It provides a flat-rate subsidy to qualifying employers based on the numbers of paid and eligible employees on the employer’s payroll and charges a reduced rate of employer PRSI of 0.5% on wages paid which are eligible for the subsidy payment.
While the criteria for eligibility for business in general is based on a reduction in turnover as a result of the pandemic, childcare businesses in possession of tax clearance and registered in accordance with Section 58C of the Childcare Act 1991 are eligible for the EWSS.
The following table provides details of the amounts of EWSS paid per month to such businesses, rounded to the nearest €m:
|
Period |
€m |
|
July/August 2020 |
1 |
|
September 2020 |
19 |
|
October 2020 |
29 |
|
November 2020 |
31 |
|
December 2020 |
32 |
|
January 2021 |
32 |
|
February 2021 |
28 |
|
Total |
172 |
285. Deputy Bríd Smith asked the Minister for Finance the number of successful applicants who have applied in each year of the operation of the help-to-buy scheme. [12887/21]
View answerThe Help to Buy (HTB) incentive was introduced in 2017. The measure is scheduled to expire on 31 December 2021.
Revenue provide monthly and annual statistics on the scheme (available at: https://www.revenue.ie/en/corporate/information-about-revenue/statistics/tax-expenditures/index.aspx)
The following table summarises approved claims for each year since the inception of the scheme until end 2020 (the latest date for which data are available).
|
2017 |
2018 |
2019 |
2020 |
|
4812* |
4957 |
6713 |
6227 |
* The 2017 figure includes approved retrospective claims made in 2017 in respect of the period 19 July 2016 to end 2016, as provided for in the relevant legislation.
286. Deputy Louise O'Reilly asked the Minister for Finance the number of students who undertook work experience or internships with State and semi-State agencies under his aegis in 2019; the cost in terms of wages and allowances; and the estimated numerical capacity of State and semi-State agencies to provide work experience and internships on an annual basis. [12954/21]
View answerThere are 17 bodies under the aegis of my Department, 8 of which facilitated student work experience or internships in 2019.
The Central Bank provided 90 student placements for work experience and internships, with a total wage cost of €618,000. It estimates capacity for 78 such placements on an annual basis. In addition, the Central Bank also facilitates unpaid transition year work placements.
Two students undertook internships with the Irish Fiscal Advisory Council in 2019, with an associated wage cost of €6,359. Two internship opportunities are offered annually at the Fiscal Council.
Collectively, the National Treasury Management Agency (NTMA), the National Asset Management Agency (NAMA), Home Building Finance Ireland (HBFI) and the Strategic Banking Corporation of Ireland (SBCI) facilitated paid work experience for 9 students in 2019. The total cost of €41,078 was borne by the NTMA. It is anticipated that these placements will be advertised on an annual basis.
The Office of the Comptroller & Auditor General engaged 10 University students during 2019 on a nine-month work placement forming part of a degree course at a gross cost of €149,074. The Office examines its capacity and options annually to maximise the potential opportunities to provide work experience and internships and on average can absorb 9 to 13 placements annually.
In 2019, Revenue had a total of 12 college student interns who were engaged in work across specialist fields such as Economic Research and Information and Communications Technology. The total cost of these internships was €169, 251.57. Revenue typically provides approximately 15 internships each year.
287. Deputy Fergus O'Dowd asked the Minister for Finance his views on the announcement by a bank (details supplied) that it will close 103 branches including a significant number of rural branches, such as the Dunleer branch in County Louth; his plans to encourage the bank to defer closures until such time that the country is exiting the Covid-19 pandemic to ensure persons in more isolated areas have banking supports to hand; and if he will make a statement on the matter. [13062/21]
View answer308. Deputy Michael Lowry asked the Minister for Finance the engagement that has taken place with his Department and officials in the Central Bank following the decision of a bank (details supplied) to close 88 branches in Ireland; if he or the Central Bank officials plan to meet with senior management of the bank to discuss these closures; and if he will make a statement on the matter. [13519/21]
View answerI propose to take Questions Nos. 287 and 308 together.
As the Deputy may be aware, as Minister for Finance, I have no role in the commercial decisions made by any bank in the State. This includes banks in which the State has a shareholding.
Decisions in this regard, including the management of branch networks, 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 Bank of Ireland Relationship Framework can be found at the following link:
BOI: https://www.gov.ie/en/publication/fc36e6-bank-of-ireland-relationship-framework-march-2012/
Notwithstanding this, Bank of Ireland provided me with a briefing in advance which was consistent with its announcement on the matter on 1 March.
Some of the key points contained in the announcement are:
- The decision to close these branches is in response to changing customer behaviour with a significant acceleration in digital banking.
- The branches closing are predominately self-service locations which do not offer a counter service.
- To preserve local access to physical banking for those who want it, the bank has agreed a new partnership with An Post which will allow personal and business customers use their local post office for a range of banking services – including to withdraw cash and make cash and cheque lodgements – at no additional cost. The closing Bank of Ireland branches all have a post office within, on average, less than 500 meters.
- The bank confirmed that the new partnership with An Post will be available to all Bank of Ireland customers before any branch closes.
- Furthermore, the bank stated that there will be no closures for six months.
On staff, the bank commented that it will be working closely with all colleagues at these branches and will be setting out a range of options which include relocating to a different branch, moving to a new role in the bank, or voluntary redundancy for those who choose it.
The full Bank of Ireland announcement on the matter can be found at the following link:
https://www.bankofireland.com/about-bank-of-ireland/press-releases/2021/bank-of-ireland-announces-significant-changes-to-branch-network-and-local-banking-services/
288. Deputy Cathal Crowe asked the Minister for Finance if he will extend the employment wage subsidy scheme extension to the end of 2021 for the tourism and aviation sectors which are both unlikely to see a substantial recovery in 2021; and if he will make a statement on the matter. [13123/21]
View answer297. Deputy Martin Browne asked the Minister for Finance his views on extending the employment wage subsidy scheme until the end of 2021; and if he will make a statement on the matter. [13239/21]
View answerI propose to take Questions Nos. 288 and 297 together.
I am aware of the particular concerns and issues that arise for the aviation and tourism sectors arising from the Covid-19 pandemic. However, the reality is that our whole economy and labour market have been rapidly transformed by this unprecedented shock and nearly all sectors have been negatively impacted either directly or indirectly.
The objective of the Employment Wage Subsidy Scheme (EWSS) is to support all employment and maintain the link between the employer and employee insofar as is possible. The EWSS has been a key component of the Government’s response to the continued Covid-19 crisis to support viable firms and encourage employment in the midst of these very challenging times. To date, subsidy payments of over €2.2 billion have been made and PRSI relief worth over €378m granted to over 47,600 employers in respect of over 537,100 employees.
I have been clear that there will be no cliff-edge to the EWSS. It is likely that continued support will be necessary out to the end of 2021 to help maintain viable businesses and employment and to provide businesses with certainty to the maximum extent possible. Decisions on the form of such support will take account of emerging circumstances and economic conditions.
As the Deputies will be aware from announcements made on Tuesday 23 February, it has been decided that the scheme is now to be extended until the end of June 2021.
With the agreement by Government on the revised plan, COVID-19 Resilience and Recovery 2021: The Path Ahead, a cautious and measured approach will be taken as we lay the foundations for the full recovery of social life, public services and the economy. It is therefore appropriate that a key business support such as the EWSS should remain in place at current levels of subsidy until the end of the second quarter of 2021.
As the revised plan is implemented, the scheme will play an important role in getting people back to work as public health restrictions are eased, thereby reducing the numbers dependant on social welfare payments over time, including the Pandemic Unemployment Payment (PUP).
For those businesses who may need additional support at this time, I would draw attention to the comprehensive package of other business and employer supports that have been made available since the July Stimulus Plan and Budget 2021 - including the Covid Restriction Support Scheme (CRSS), the Credit Guarantee Scheme, the SBCI Working Capital Scheme, Sustaining Enterprise Fund, and the Covid-19 Business Loans Scheme.
The Government remains fully committed to supporting businesses and employers insofar as is possible at this time.
289. Deputy Cathal Crowe asked the Minister for Finance if he will engage with the pillar banks to ensure that concession-based moratoriums are being provided to tourism businesses until such time as Covid-19 restrictions are lifted; and if he will make a statement on the matter. [13124/21]
View answerAs the Deputy will be aware, on 18 March 2020, the Banking and Payments Federation of Ireland (BPFI) announced a coordinated approach by banks and other lenders to help their customers, including those in the tourism industry, who were economically impacted by the Covid-19 crisis. The measures included flexible loan repayment arrangements where needed, including loan payment breaks initially for a period up to three months and then subsequently extended for up to six months. The implementation of this voluntary moratorium by the banking industry was a flexible response to the emerging Covid-19 crisis and ensured that a large volume of affected customers could benefit quickly during a fast moving and evolving public health crisis.
Borrowers whose payment break has ended are been given an option to return to full repayments based on the same term of the loan or to extend the term of the loan or to engage further with their bank on suitable arrangements. The BPFI reported, that as of 31 December 2021, approximately 49% of SMEs returned to repaying on the existing term whilst 46% returned to repaying on extended term basis and just over 5% were receiving other supports from lenders.
As Minister for Finance I have no function in the commercial decisions made by banks. However, the Central Bank has confirmed that there is no regulatory impediment to lenders offering payment breaks to borrowers, providing they are appropriate for the individual borrower circumstance. The BPFI has also reiterated that standard payment breaks continue to be part of the wide range of tailored solutions which are being made available to customers upon assessment of their situation.
SME borrowers have regulatory protections via the Central Bank's SME lending regulations. The SME Regulations https://centralbank.ie/news/article/regulations-for-firms-lending-to-smes-from-2016 set out the required treatment of SMEs by regulated entities in relation to various aspects of business lending. This includes detailed provisions around the credit application process, requirements regarding security or collateral, credit refusals and withdrawals, handling complaints, managing arrears and having in place policies for engaging with SMEs in financial difficulty. 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 recently wrote to all lenders indicating that lenders are to 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. The Central Bank’s clear expectation is that lenders engage effectively and sympathetically with distressed borrowers.
In addition, Credit Review https://www.creditreview.ie was established to assist those SMEs and farm borrowers that have had credit applications of up to €3 million refused or indeed an existing credit facility withdrawn or amended by the participating bank. SMEs can apply to Credit Review after exhausting the internal appeals process in the participating institution, which are currently AIB, BOI, Ulster Bank and Permanent TSB.
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.
290. Deputy Cathal Crowe asked the Minister for Finance if he will consider retaining the tourism VAT rate at 9% until at least 2025 to assist the recovery of the tourism sector post Covid-19; and if he will make a statement on the matter. [13125/21]
View answer295. Deputy Martin Browne asked the Minister for Finance his plans to retain the 9% tourism VAT rate until 2025; his views on the way this would assist the recovery of the hospitality and hotel industry; his views on whether such a commitment must be made without delay as tourism contracting has commenced for 2022 and 2023; and if he will make a statement on the matter. [13236/21]
View answer305. Deputy Christopher O'Sullivan asked the Minister for Finance if he will consider extending the hospitality VAT rate of 9% until 2025; and if he will make a statement on the matter. [13428/21]
View answerI propose to take Questions Nos. 290, 295 and 305 together.
Deputies will be aware that in recognition of the unprecedented challenges facing the Hospitality and Tourism sector, I provided for a reduction in the VAT rate to supplies of certain goods and services which primarily relate to the hospitality and tourism sector in Budget 2021. The rate was reduced from 13.5% to 9% from 1 November 2020 to 31 December 2021.
These changes introduced in the context of the pandemic are kept under review by my Department. Separately, tax changes are generally taken in the context of the Budget. Deputies will be aware that my officials prepare a series of papers containing tax options for the Tax Strategy Group to be considered in the context of the Budgetary process, alongside a wide range of submissions from various stakeholders and lobby groups.
292. Deputy Richard Bruton asked the Minister for Finance if his attention has been drawn to defects in sections of the Financial Services and Pensions Ombudsman Act 2017 whereby banks can initiate proceedings to avoid adjudication in defects in their treatment of a customer; and if there are plans to consult the Ombudsman regarding the need to amend the Act to make it more fit for purpose in this respect or in other respects. [13186/21]
View answerAs the Deputy will be aware, the Financial Services and Pensions Ombudsman (FSPO) is independent in the performance of his statutory functions. I have no role in the day to day workings of the office or in the decisions which he takes.
One of the main roles of the Ombudsman is to investigate, mediate and adjudicate complaints about the conduct of financial or pension service providers. The Financial Services and Pensions Ombudsman was established on 1 January 2018, by the Financial Services and Pensions Ombudsman Act 2017 (‘the Act’). The Act outlines the functions of the FSPO in the investigation of complaints against financial service providers and pension providers.
Section 44(2)(a)(i) of the Act prescribes that
“a complainant may not make a complaint…where – the conduct giving rise to the complaint is or has been the subject of legal proceedings before a Court or Tribunal .”
This position is however, counterbalanced by the provisions of Section 50(1) which provides that:
“Notwithstanding Section 44(2)(a)(i) the Ombudsman may accept a complaint against a financial service provider or a pension provider that has initiated legal proceedings in relation to a matter to which the complaint relates, where the Ombudsman believes, based on reasonable grounds, that the financial service provider or the pension provider, as the case may be, has begun those proceedings in order to prevent the making of the complaint, or to frustrate or delay its investigation.”
The provisions of Section 50(3)(b) are also relevant, as these prescribe that
“The Ombudsman shall not investigate or make a decision on a complaint where… there are or have been proceedings (other than where the proceedings have been stayed under Section 49) before any Court in respect of the matter that is the subject of the investigation.”
Section 49 makes clear that where one of the parties to a complaint before the Ombudsman subsequently commences proceedings in any Court, then any party to those proceedings may apply to the Court for an Order to formally stay the proceedings. It is a matter for the Court to make an order pursuant to Section 49 if it is satisfied that:-
“(i) there is no sufficient reason why the matter in respect of which the proceedings have been commenced, should not be investigated by the Ombudsman, and
(ii) the party that commenced the proceedings was at the time when the proceedings were commenced and still remains ready and willing to do all things necessary for the proper conduct of the investigation.
It is also notable that pursuant to Section 52 of the FSPO Act 2017:
“The Ombudsman may decline to investigate or may discontinue an investigation of, a complaint where in the opinion of the Ombudsman … the subject matter of the complaint is of such a degree of complexity that the Courts are a more appropriate forum.”
The Ombudsman has informed me that these counterbalancing provisions within the governing legislation, recognise the statutory functions of the FSPO to impartially investigate complaints against financial service providers and pension providers, against the background of the overarching jurisdiction of the Courts. Together these statutory provisions ensure that any issues to be determined between a financial service provider and its customer, can be determined by one forum, being the one more suitable to the particular circumstances.
293. Deputy Marian Harkin asked the Minister for Finance the breakdown of individual consumption per capita across Ireland's NUTS III regions from 2008 to date. [13188/21]
View answerData for individual consumption per capita across Ireland’s NUTS III regions are not currently available. Overall, personal consumption per capita in 2020 was €20,593 (in current market prices). In 2019, there had been a recovery of approximately 24 per cent since the trough of per capita consumption in 2011. This has been followed by a fall of 9 per cent in 2020 due to the Covid-19 crisis. (Table 1 in link)
However, data are available for disposable income per capita across Ireland’s NUTS III regions from 2009 to 2018 as per table 2. (Table 2 in link)
294. Deputy Éamon Ó Cuív asked the Minister for Finance the amount of the UK to Ireland customs documentation that is handled electronically arising from the EU-UK free trade agreement; the amount handled by way of the presentation or use of paper documentation; if paper documentation is used, when is it planned to migrate to a purely electronic system of customs controls and checks; and if he will make a statement on the matter. [13214/21]
View answerI am advised by Revenue that Ireland’s customs import declaration system, Automated Import System (AIS) which was introduced in November 2020 and Ireland’s Automated Entry Processing (AEP) which processes both import and export declarations, use electronic data processing for managing customs declarations. In that regard, the customs import and export documentation required arising from the EU-UK Trade and Cooperation Agreement is managed electronically.
There are some other customs procedures that are scheduled for development over the next four years in line with the EU Commission development schedule which currently require a declarant to present paper-based declarations to Revenue e.g. using an ATA Carnet for the temporary admission of goods to Ireland. An ATA Carnet is an international document that cannot be submitted electronically, as yet, and must be presented to Customs to be stamped and validated. The volume of these declarations is very low.
There are also some occasions where there is a requirement for original supporting documentation to be authenticated by Revenue as part of an import or export e.g. an original certificate of origin. In these cases, the physical document may be requested. Again however, the volumes are very low.
296. Deputy Martin Browne asked the Minister for Finance his views on increasing the Covid restriction support scheme for businesses with a 75% drop in revenue; his views on the way the hotel industry estimates that 44% of hotel bedroom stock is excluded from the scheme entirely; and if he will make a statement on the matter. [13238/21]
View answer303. Deputy Christopher O'Sullivan asked the Minister for Finance if he will increase the rate of the Covid restrictions support scheme and extend it until the end of 2021; and if he will make a statement on the matter. [13419/21]
View answerI propose to take Questions Nos. 296 and 303 together.
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. 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
To qualify under the scheme, a business must carry on a trade or trading activities, the profits from which are chargeable to tax under Case I of Schedule D. The trade must be carried on from a business premises that is located in a region subject to restrictions introduced in line with the Government’s ‘Living with Covid-19 Plan’, with the result that the business is required to prohibit or considerably restrict customers from accessing its business premises.
To make a claim under the CRSS, a business must be able to demonstrate that, because of the Covid restrictions, the turnover of the business in the period for which the restrictions are in operation, and for which a claim is made, will be no more than 25% of an amount equal to the average weekly turnover of the business in 2019 (or average weekly turnover in 2020 in the case of a new business) multiplied by the number of weeks in the period for which a claim is made.
Domestic travel restrictions or social distancing measures are not the level of restrictions to which the CRSS refers. To be eligible to make a claim under the CRSS, the applicable restrictions must require the business to either prohibit, or significantly restrict, customers from accessing the business premises in which the relevant business activity is carried on.
In relation to the eligibility of hotels to claim under the CRSS, I understand the Deputy is referring to a statistic that was included in a media statement made by the Irish Hotels Federation on 11 December 2020. At that time, public health restrictions had been eased, with a phased move to a revised Level 3 restrictions applying nationally, which meant that hotels were allowed to reopen to provide accommodation services to the general public. Gyms, leisure centres and swimming pools, including those within hotels, were also allowed to reopen for individual use. Where, on the relaxation of restrictions, a hotel ceased to be substantially restricted, and therefore ceased to be eligible to claim under the CRSS, it could claim an additional week’s support under the scheme (referred to as a ‘restart week’) to assist it with the costs of reopening at that time.
Since 24 December 2020 hotels have, under public health regulations, been required to close to the public (other than for guests who had a booking and were due to check in up to and including 26 December 2020), with limited opening allowed only for essential non-social and non-tourist purposes. Therefore, hotels are currently eligible to make a claim under the CRSS because public health restrictions are in place which require the business to either prohibit, or significantly restrict, customers from accessing their business premises.
In relation to eligibility criteria and increasing the rates of the scheme, I have no plans to change the eligibility criteria for the CRSS or to increase the rates. The CRSS is just one of the Government’s supports to assist businesses impacted by COVID-19. Businesses who are not eligible for CRSS may be entitled to alternative supports put in place by the Government, including the COVID Pandemic Unemployment Payment (PUP), the Employment Wage Subsidy Scheme (EWSS) and the Tourism Business Continuity Scheme. Businesses may also be eligible under the Debt Warehousing Scheme to ‘park’ certain VAT and PAYE (Employer) liabilities, excess payments received under the Temporary Wage Subsidy Scheme (TWSS), outstanding balances of self-assessed Income Tax for 2019 and Preliminary Tax for 2020.
The legislation provides that the Scheme will run to 31 March 2021 but may be extended by Ministerial Order (subject to Dáil approval) but not later than 31 December 2021.
I have been clear that there will be no cliff-edge to supports and, as Deputies will be aware from announcements made on Tuesday 23 February, it has been decided that both the EWSS and the CRSS are now to be extended until the end of June 2021.
With the agreement by Government on the revised plan, COVID-19 Resilience and Recovery 2021: The Path Ahead, a cautious and measured approach will be taken as we lay the foundations for the full recovery of social life, public services and the economy. It is therefore appropriate that key business supports should remain in place until the end of the second quarter of 2021.
Consideration is being given to the fact that continued support could be necessary out to the end of 2021 to help maintain viable businesses and employment and to provide businesses with certainty to the maximum extent possible. Decisions on the form of such support will take account of emerging circumstances and economic conditions as they become clearer.
The Government remains fully committed to supporting businesses and employers insofar as is possible at this time.
299. Deputy Michael Fitzmaurice asked the Minister for Finance if he will consider lifting the four-year rule for recoupment of overpayment or refunds for a short period during the Covid-19 pandemic to allow struggling businesses claim back refunds beyond this period; and if he will make a statement on the matter. [13329/21]
View answerI am advised by Revenue that the time limit for making refunds of overpaid tax is set out in section 865 Taxes Consolidation Act 1997. There have been numerous decisions of the Tax Appeals Commission which state that the Revenue Commissioners have no discretion to repay tax if a claim has been received from a taxpayer outside the four-year statutory period.
Although the “four year limit” has not been relaxed, the Government has put a range of tax based measures in place to help businesses who are experiencing difficulties during the pandemic. Revenue has been assisting such businesses by implementing measures including the Temporary Wage Subsidy Scheme (TWSS), the Employment Wage Subsidy Scheme (EWSS), the Covid Restrictions Support Scheme (CRSS), Debt Warehousing for VAT, PAYE (Employer), Income Tax and excess TWSS liabilities, reduced interest rates for debts subject to phased payment arrangements, suspension of the surcharge for late filing of Corporation Tax returns and iXBRL financial accounts, and not restricting certain reliefs where returns are filed late due to the impact of COVID-19.
301. Deputy Mairéad Farrell asked the Minister for Finance the details of the recommendations from the 2019 report by a company (details supplied) on community banking that have been implemented; his plans to implement other recommendations made by the report in future; and if he will make a statement on the matter. [13352/21]
View answerAs the Deputy is aware, Indecon submitted their report on Evaluation of Concept of Community Banking in Ireland to the Department of Finance in late 2019. The report was sent to Government and published in December 2019.
The report contained 15 recommendations, grouped under the following subject areas:
- Leveraging role of state supports for SMEs infrastructure to address market gaps;
- Reducing financial exclusions and managing of existing information by credit unions, An Post and local authorities;
- Enhancing competition;
- Reducing information asymmetries and building skills; and
- Enhanced responsibility for commercial banks.
These recommendations are listed below and were a matter for a range of Departments and Agencies. The Deputy should note that Recommendations 9 and 11 matters for my Department. Following publication, I circulated the report directly to the relevant Ministers and Agencies and asked them to consider the recommendations relevant to their organisation. Any subsequent implementation would be a matter for said Departments and Agencies, based on their own considerations and who will be able to supply further information if required by the Deputy.
Recommendation 1: “Continue to target rural enterprise support in future counter-guarantee loan schemes.”
The Strategic Banking Corporation of Ireland (SBCI) operates a number of schemes on behalf of the Department of Enterprise, Trade and Employment and Department of Agriculture, Food and the Marine.
I am informed by the Department of Enterprise, Trade and Employment that the COVID-19 Credit Guarantee Scheme is the largest loan guarantee scheme in the history of the State. The Scheme provides €2 billion in lending, for terms up to five-and-a-half years and offers a range of lending products between €10,000 and €1 million at below market interest rates and is available to SMEs and small mid-caps (business with less than 500 employees). The scheme, which was developed under European Commission’s Temporary State-Aid Framework enabled the inclusion of primary producers.
The Future Growth Loan Scheme makes up to €800m in lending available to SMEs and small mid-caps. Like the COVID-19 Credit Guarantee Scheme, the Future Growth Loan Scheme is available to businesses engaged in primary agriculture and aquaculture (the farming and seafood sectors), supporting businesses in these sectors as they seek financing for long-term investment.
Recommendation 2: “Expand Microfinance Ireland’s mandate to provide enterprise loans of up to €50,000.”
I am informed by the Department of Enterprise, Trade and Employment that Microfinance Ireland provides vital support to microenterprises by filling the lending gap in the market by lending to business that cannot obtain loans from other commercial lenders. It lends to business that do not meet the conventional risk criteria applied by commercial lenders and applies interest rate charges for its lending which are not reflective of its credit risk.
With the arrival of COVID-19 in Ireland and the subsequent impact on businesses across the country, as an emergency measure Microfinance Ireland introduced the COVID-19 Loan Scheme to provide support to microenterprises directly impacted by the effects of the virus. Phase 1 of the scheme had significant demand with the equivalent of three years lending provided in a four-month period. Phase 2 of the scheme commenced in August 2020 and MFI customers can apply for a COVID-19 Business Loan up to €25,000 in addition to their existing borrowings, subject to a maximum credit exposure of €50,000.
The Department Enterprise, Trade and Employment has assured me that it will continue to work with MFI to provide appropriate loans to microenterprises.
Recommendation 3: “Promotion by Local Enterprise Offices of Micro Enterprise Loan Fund.”
Local Enterprise Offices are bodies under the aegis of the Department of Enterprise, Trade and Employment. I am informed by the Department of Enterprise, Trade and Employment that the LEOs actively work with MicroFinance Ireland to promote their loan fund. The LEOs submitted 751 loan applications to Micro Finance Ireland in 2020.The LEOs have a provisional target to submit 550 loan applications to Micro Finance Ireland in 2021.
Recommendation 4: “Set ambitious targets for regional impact of any revised Brexit loan scheme.”
I am informed by the Department of Agriculture, Food and the Marine that while there are currently no regional targets for the Brexit Loan Scheme, analysis of applications indicates a good geographical spread of beneficiaries.
I am informed by the Department of Enterprise, Trade and Employment that work is under way to scope potential options for adjustments/revisions to the Brexit Loan Scheme, however given the structure of the scheme, which is counter-guaranteed by the European Investment Fund through its InnovFin SME guarantee facility, there may be limitations on the extent of any alterations to the scheme.
Any revised Brexit Loan Scheme will be promoted across the regions.
Recommendation 5: “Consider new initiatives to support expansion of SME lending by newer platforms.”
The Strategic Banking Corporation of Ireland (SBCI) significantly expanded the number of on-lenders offering SBCI products over the course of 2020. The participation of non-bank credit providers (3 signed, 3 to sign in near future) and the inclusion of 19 Credit unions in the COVID-19 Credit Guarantee scheme (CCGS) has significantly broadened the access to guarantee schemes both by type of institution and by geographic spread, and has increased access to the target audience considerably.
The inclusion of non-bank finance providers has allowed SBCI products be delivered via new lending platforms and has brought competition and choice to the market.
SBCI also increased the number of on-lenders participating in delivering the Future Growth loan Scheme (FGLS) by two, increasing the number to six participating institutions. SBCI also has a permanent open call on its website for interested on-lenders to apply for liquidity facilities to help increase price competition and customer choice.
Recommendation 6: “Expansion of Personal Micro Credit Scheme by member-owned credit unions.”
This is a policy matter for the Minister for Social Protection.
I understand that the Personal Micro Credit Scheme (PMC) provides for small scale loans, known as "It Makes Sense" loans, ranging from €100 to €2,000, by Credit Unions to borrowers in receipt of social welfare payments who may have difficulty accessing low cost credit. Currently 107 credit unions at some 281 locations are participating in the Scheme.
An Post facilitates the repayment of these loans for social welfare recipients who receive their payment through a Post Office, by utilising the Department of Social Protection's Household Budgeting Facility. As part of a pilot scheme since Q1 2020, the Department of Social Protection has funded the weekly administrative cost for access to the Household Budgeting Facility.
Recommendation 7: “Facilitation of new providers to enhance access to credit in communities.”
This recommendation focusses on potential for the An Post or other community-based providers to increase access to credit.
My role in relation to the provision of financial services specifically by the post office network relates primarily to payment services, for which I as the Minister for Finance authorise An Post to provide. This authorisation is under the Postal and Telecommunications Services Act 1983 (Section 67) Order 2016.
For all other matters related to the post office network, I defer to the Minister for the Environment, Climate and Communication, Mr Eamon Ryan, TD. An Post is a body under the aegis of the Department of the Environment, Climate and Communications.
I understand from the Department of the Environment, Climate and Communications that An Post is transforming its retail network by delivering new products and new formats. This includes, among other things, diversifying and growing the financial services products it provides for individuals and SMEs to include loans, credit cards and more foreign exchange products, local banking in association with the major banks and a full range of State Savings products. Two new dedicated sub-brands, An Post Money and a new business-to-business brand, An Post Commerce, were launched. Investment by An Post of €50 million in the network is designed to encourage communities to use the enhanced services in their local post office.
While it is longstanding Government policy that postal services will not be directly subsidised by the Government, we remain fully committed to a sustainable post office network as a key component of the economic and social infrastructure in both rural and urban areas.
Initiatives by the SBCI are outlined above under Recommendation 5. SBCI is currently exploring a number of new initiatives in partnership with both existing and new on-lenders that will further increase the level of competition and choice in the market, particularly in relation to emerging opportunities associated with the Green agenda and energy efficiency.
Recommendation 8: “Development of initiatives by local authorities as part of digital strategies to assist individuals to apply online for banking services.”
Policy on local authorities is the responsibility of the Minister for Housing, Local Government and Heritage.
Recommendation 9: “Support the Credit Union Market to deliver Expanded Range of Community Banking Services.”
Credit Union policy is a responsibility under my Department. Revised Central Bank lending regulations were enacted on 1 January 2020 which materially expanded the lending capacity of the sector, including for mortgage and SME lending. The sector had a combined mortgage and SME loan book of €344 million at end 2020. More recently, I welcomed the announcement that nineteen credit unions have been approved to participate in the COVID-19 Credit Guarantee Scheme (CGS).
The Government is supportive of credit unions who have the financial strength, the competence and the capability, undertaking more SME and mortgage lending. However, the decision to lend is to be made by the board of each individual credit union, taking into account their own specific commercial, risk appetite and regulatory factors.
I am also aware that many credit unions have improved their digital offerings. In 2016, the Central Bank defined and described a suite of additional services known as MPCAS, under which approved credit unions may offer personal current accounts with debit cards, overdrafts and a wide range of payment services within an appropriate risk framework. To date, 54 credit unions have been approved to provide MPCAS.
I am also aware of a number of collaborative projects underway to support finance for retro-fitting and agri-lending, as well as collaborative projects being developed in the areas of SME lending, insurance and investment in social housing. These are all positive examples of how many credit unions are widening their products and services for their members.
It should also be noted that the Government has committed to a review of the policy framework for credit unions in the Programme for Government. This project is already well advanced.
Recommendation 10: “An Post to explore and discuss with its parent Government Department, NewEra, and, where appropriate, the Department of Finance, the possibility of investing in partner financial organisations, where such investment is commercially viable and where it would enhance competition in lending market.”
Please see information provided on Recommendation 7.
Recommendation 11: “Extend Exemption for New Community Banking Entrants from Notification of Charges for 5 Years.”
This recommendation is still under consideration by officials in my Department. Indecon accepted that the current 3 year exemption is not a major barrier. The extent of any additional attraction for new community banking entrants is limited and has to be balanced against the potential impact on consumers dealing with such new entrants.
Recommendation 12: “Development of Technology Based Lending Tool Kit by Enterprise Ireland and Local Enterprise Offices.”
Please see information provided on Recommendation 13.
Recommendation 13: “Advisory supports by Local Enterprise Offices to include assistance with preparation of lending applications.”
Enterprise Ireland and Local Enterprise Offices are bodies under the aegis of the Department of Enterprise, Trade and Employment. I am informed by the Department of Enterprise, Trade and Employment that The LEOs offer financial mentoring which helps firms with the preparation of lending applications. The LEOs also offer financial training which upskills small business owners and managers to be in a position to prepare their own loan applications.
Recommendation 14: “Skillnet Ireland to offer analysis of lending requirements as a component in their Management Development Programmes.”
Skillnet Ireland is a State agency under the aegis of the Department of Further and Higher Education, Research, Innovation and Science.
Recommendation 15: "Commercial Banks should consider the establishment of an increased number of Community Banking Hubs or provide alternative methods of banking services delivery in areas where branch closures may have hindered access to banks.”
This recommendation is a matter for the commercial banks and the Deputy will be aware that decisions in regards to operational matters are the sole responsibility of the boards and management of the individual banks which are run on an independent and commercial basis. Furthermore, 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 are publicly available and were insisted upon by the European Commission to protect competition in the Irish market.
However, I am advised that the Central Bank's Consumer Protection Code 2012 (the Code) states that a bank must not, through its policies, procedures, or working practice, prevent access to basic financial services. The Central Bank adopts a ‘technology neutral’ approach meaning that the same principles of regulation, including the rules of the Code, apply equally to both digital and traditional delivery environments.
Branch closures are always a matter of regret, and I as Minister, would hope that closures are kept to the minimum necessary for financial sustainability. Where there are branch closures, the Central Bank’s Consumer Protection Code must be complied with. Requirements include immediate notification to the Central Bank, at least two months notice to affected consumers and either ensuring all branch business is properly completed prior to closure or informing as to how continuity of service will be provided. Notwithstanding this, I do expect that any bank closing branches will do everything it can to mitigate the impacts of the branch closures on local communities, including technology and the use of alternative means of service delivery. In this regard, I note Bank of Ireland has agreed a new partnership with An Post which will allow personal and business customers use their local post office for a range of banking services – including to withdraw cash and make cash and cheque lodgements – at no additional cost.
302. Deputy Thomas Pringle asked the Minister for Finance if there are circumstances under which VAT can be charged on medical tests used to diagnose and for treatment of cancer; the specific circumstances under which VAT can be charged on such tests; and if he will make a statement on the matter. [13383/21]
View answerI am advised by Revenue that the VAT rating of goods and services is subject to the requirements of EU VAT law with which Irish VAT law must comply. In accordance with the Directive our legislation exempts from VAT hospital and medical care or treatment provided by a hospital, nursing home, clinic or similar establishment, which includes medical tests used to diagnose and treat cancer. The legislation further provides that professional medical care services recognised as such by the Department of Health are exempt from VAT. This means that all medical tests used to diagnose and treat cancer which are provided by a recognised medical professional are exempt from VAT.
304. Deputy Christopher O'Sullivan asked the Minister for Finance if he will adopt a standard position on a moratorium for loan repayments for the hospitality sector to reflect the extended Covid-19 restrictions; and if he will make a statement on the matter. [13421/21]
View answerAs the Deputy will be aware, on 18 March 2020, the Banking and Payments Federation of Ireland (BPFI) announced a coordinated approach by banks and other lenders to help their customers, including those in the hospitality sector, who were economically impacted by the Covid-19 crisis. The measures included flexible loan repayment arrangements where needed, including loan payment breaks initially for a period up to three months and then subsequently extended for up to six months. The implementation of this voluntary moratorium by the banking industry was a flexible response to the emerging Covid-19 crisis and ensured that a large volume of affected customers could benefit quickly during a fast moving and evolving public health crisis.
Borrowers whose payment break has ended are been given an option to return to full repayments based on the same term of the loan or to extend the term of the loan or to engage further with their bank on suitable arrangements. The BPFI reported, that as of 31 December 2020, approximately 49% of SMEs returned to repaying on the existing term whilst 46% returned to repaying on extended term basis and just over 5% were receiving other supports from lenders.
As Minister for Finance I have no function in the commercial decisions made by banks. However, the Central Bank has confirmed that there is no regulatory impediment to lenders offering payment breaks to borrowers, providing they are appropriate for the individual borrower circumstance. The BPFI has also reiterated that standard payment breaks continue to be part of the wide range of tailored solutions which are being made available to customers upon assessment of their situation.
SME borrowers have regulatory protections via the Central Bank's SME lending regulations. The SME Regulations https://centralbank.ie/news/article/regulations-for-firms-lending-to-smes-from-2016 set out the required treatment of SMEs by regulated entities in relation to various aspects of business lending. This includes detailed provisions around the credit application process, requirements regarding security or collateral, credit refusals and withdrawals, handling complaints, managing arrears and having in place policies for engaging with SMEs in financial difficulty. 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 recently wrote to all lenders indicating that lenders are to 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. The Central Bank’s clear expectation is that lenders engage effectively and sympathetically with distressed borrowers.
In addition, Credit Review https://www.creditreview.ie was established to assist those SMEs and farm borrowers that have had credit applications of up to €3 million refused or indeed an existing credit facility withdrawn or amended by the participating bank. SMEs can apply to Credit Review after exhausting the internal appeals process in the participating institution, which are currently AIB, BOI, Ulster Bank and Permanent TSB.
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.
