Written Answers Nos. 518-536
518. Deputy Pearse Doherty asked the Minister for Finance if the proposal with regard to the addition at European Council level of the words, by the use of secondary markets, to Ireland's 2018 country specific recommendations was made by Ireland; if not, the way that Ireland voted on the amendment; and if he will make a statement on the matter. [20004/21]
View answerCountry Specific Recommendations (CSRs) provide individual tailored guidance to Member States on macro-economic, budgetary and structural policies in accordance with Articles 121 and 148 of the Treaty on the Functioning of the European Union (TFEU). These recommendations, issued by the European Commission as part of the framework of the European Semester for economic governance, are aimed at strengthening economic growth and job creation, while achieving or maintaining sound public finances and preventing excessive macroeconomic imbalances. Following discussions at the preparatory Council committees and adoption of the Country Specific Recommendations in Council, Member States are expected to implement the recommendations over the following 12-18 months.
As is usual practice, following the publication of the draft Country Specific Recommendations by the Commission in May 2018, Member States have the opportunity to discuss the recommendations and seek factual clarifications. Factual inaccuracies are highlighted and it is not uncommon for the text of the Country Specific Recommendations to be amended. This is done in the preparatory committees of Council. In the ECOFIN filiere, this work is carried out by the Economic Policy Committee (EPC) and the Economic and Finance Committee Alternates (EFC-A), before being approved by the Economic and Finance Committee and Finance Ministers at ECOFIN. A parallel set of discussions takes place in the Employment, Social Policy, Health and Consumer Affairs Council (EPSCO) filière.
Both the draft, as circulated by the Commission, and final versions of Recital 18 of the Country Specific Recommendations proposed for Ireland in 2018 noted that a stronger consumer protection framework for secondary market loan sales could improve the viability of repossessions and write-offs.
520. Deputy Seán Haughey asked the Minister for Finance if income taxpayers can make a paper tax return manually through the post; the procedures in place to facilitate such a return; if his attention has been drawn to the fact that some income tax payers have experienced difficulties in obtaining the necessary income tax forms to make a return for 2020 in this way and also in trying to speak to someone over the phone in the Revenue Commissioners to discuss these procedures; and if he will make a statement on the matter. [20055/21]
View answerI am advised by Revenue that the quickest and easiest way for taxpayers to manage their tax filing and tax payment obligations is through the online services at www.revenue.ie., using the myAccount facility for PAYE taxpayers and the Revenue Online Service (ROS) for business/self-assessed taxpayers.
While most self-assessed taxpayers are mandatory ‘e-filers’ and are therefore required to file an electronic return in accordance with section 917EA of the Taxes Consolidation Act 1997, Revenue recognises that some people may not be in a position to do so for a variety of reasons, for example, where there is poor broadband service. To facilitate these customers, Revenue provides hard copy returns that can be submitted by post. These hard-copy versions can be ordered by calling Revenue’s automated 24-hour forms ordering service on 01-738 3675.
Certain tax returns including the Form 11 for self-assessed taxpayers are also made available for printing/downloading on Revenue’s website at www.revenue.ie as soon as they are available. Revenue has confirmed that the 2020 version of the Form 11 return will be available on the website for printing/downloading in the coming weeks. In the interim, if the Deputy is aware of a taxpayer who is anxious to file a Form 11 in respect of 2020 at this time, he should provide the details to Revenue who will make direct contact with the person.
Regarding contact channels, Revenue has advised me that its telephone services for both PAYE and business/self-assessed customers are operational, Monday-Friday from 9:30am-1:30pm. The telephone number for PAYE queries is 01-738 3636 and 01-738 3630 for business/self-assessed queries. The contact details for all services are listed in the ‘contact us’ section of Revenue’s website.
523. Deputy Alan Dillon asked the Minister for Finance if provisions are being made to assist claimants (details supplied); if his attention has been drawn to an avenue which may support their claims; and if he will make a statement on the matter. [20217/21]
View answerI note that the details supplied relate to claims of a particular insurance firm. While I cannot adjudicate on the matter raised, I welcome the legal certainty provided by the recent High Court judgment relating to the claimants. I also welcome that the particular company indicated that it will not appeal the judgment of the High Court; will pay valid claims; and endeavour to process claims as quickly as possible and in line with the judgment. These are important commitments for the company to live up to. Notwithstanding this, elements of the case, including quantum, remain under legal consideration, and I will not make any further comment.
Separately, the Central Bank’s COVID-19 Business Interruption Supervisory Framework sets out its expectations of insurance firms in handling COVID-19 related business interruption claims. Where customers have an entitlement to claim under such a policy, I echo the Banks expectation that these will be processed, paid promptly and in full. The Bank has indicated that a number of insurers have already accepted and commenced settling claims as a result of its supervisory interventions. It has indicated that it is continuing to closely challenge insurers to ensure all valid claims are paid and on how those claims are being managed and processed. The Central Bank’s examination team is actively monitoring compliance by the relevant firms with its expectations.
In conclusion, working to protect customers during and after the COVID-19 crisis, with particular emphasis on business disruption insurance, remains a priority issue for Government and is thus included within the Action Plan for Insurance Reform. Both Minister of State Fleming and I have raised the issue of business interruption insurance repeatedly with the insurance industry, and have stated that insurers should engage with those impacted businesses honestly, fairly and professionally to honour the policy terms, in line with the Central Bank’s Consumer Protection Code. As a general rule, insurers need to take a longer term perspective as regards their customers.
Finally, I can assure the Deputy that Minister of State Fleming and I will also continue to monitor developments and will engage appropriately with both insurers and the Central Bank on this matter.
524. Deputy Richard Boyd Barrett asked the Minister for Finance if businesses impacted by the travel restrictions such as language schools, travel agents and so on the trading of which is unlikely to return to normal when domestic restrictions are lifted will have supports such as the temporary wage subsidy scheme, the Covid restrictions support scheme and so on extended beyond the current deadlines; and if he will make a statement on the matter. [20220/21]
View answerI am aware of concerns that have been raised regarding the pace of recovery for certain sectors, and that it has been suggested that the level of support be increased and/or that the application of some of the new State supports should be delineated on the basis of explicit sectoral qualification criteria. However, the reality of COVID-19 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, payments of over €2.7 billion and PRSI credit of over €450 million have been granted to 48,500 employers in respect of almost 550,000 workers.
The Covid Restrictions Support Scheme, the CRSS, a targeted support for businesses significantly impacted by restrictions introduced by the Government under the public health regulations to combat the effects of the Covid-19 pandemic. To date, 142,100 claims for CRSS payments totalling €464.3 million in respect of 24,500 premises have been made.
I have been clear that there will be no cliff-edge to the EWSS and, 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 key business supports should remain in place until the end of June 2021.
Motions seeking Dáil approval of the extension of the EWSS and the CRSS to 30 June 2021 are scheduled for debate in the Dáil on Thursday 22 April.
As the revised plan is implemented, the EWSS 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).
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 will continue to assess the effects of the Covid-19 pandemic on the economy and I will continue to work with Ministerial colleagues to ensure that appropriate supports are in place to mitigate these effects.
For those businesses who may need additional support during this period, 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 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.
525. Deputy David Cullinane asked the Minister for Finance if he has considered extending the help-to-buy scheme to divorcees who have no beneficial interest in a property; and if he will make a statement on the matter. [20257/21]
View answerThe definition of first time buyer in the legislation governing the Help-to-Buy (HTB) scheme is as follows:
" first-time purchaser' means an individual who, at the time of a claim under subsection (3) has not, either individually or jointly with any other person, previously purchased or previously built, directly or indirectly, on his or her own behalf a dwelling;" .
The intention is to target the scheme on those who have not had the opportunity to build up equity in another property which could be used to purchase the second or subsequent property.
The definition complements that used in the Central Bank's macro-prudential rules.
I do not propose to amend the definition of first time buyer in HTB.
526. Deputy John Paul Phelan asked the Minister for Finance the cost of the key employee engagement programme in the most recent reporting period arising from figures compiled up to 31 March 2021; the number of persons and companies and size of the companies that availed of same in that reporting period; and if he will make a statement on the matter. [20292/21]
View answer527. Deputy John Paul Phelan asked the Minister for Finance the cost of the employee share incentive schemes for the most recent period arising from figures compiled up to 31 March 2021 including save as you earn, RSS, approved profit-sharing schemes, the key employee engagement programme and employee share ownership trusts; the number of persons and companies that availed of same in that reporting period; and if he will make a statement on the matter. [20293/21]
View answerI propose to take Questions Nos. 526 and 527 together.
Revenue publishes an annual Cost of Tax Expenditures table, which shows the cost and numbers availing of a wide range of expenditures. I am advised by Revenue that it is available at:
www.revenue.ie/en/corporate/information-about-revenue/statistics/tax-expenditures/costs-expenditures.aspx
This table includes the following:
- Approved Profit Sharing Schemes (2018: cost €55.2m, 34,000 participants);
- Approved Save as You Earn Schemes (2018: cost €1.3m, 1,100 participants); and
- Employee Share Ownership Trusts (2018: cost €0.1m, 11,900 participants).
The table provides data up to and including 2018 on the measures but does not include data on participating companies.
Due to the COVID-19 pandemic, Revenue extended the return filing deadlines in respect of 2019 returns. As a result, the full information for such returns was available to Revenue much later in 2020. These returns are being processed and analysed and the information in the table for 2019 will be updated by Revenue in due course. The tax returns for 2020 have very recently been filed and these are also being processed and analysed by Revenue. Information in the table for 2020 will be updated at a later date.
The Key Employee Engagement Programme (KEEP) was introduced with effect from 1 January 2018, but due to the holding period requirement, the first year that an actual cost occurred was in 2019 (when share options were exercised). Revenue advises me that information on KEEP for 2019 will be included when the Cost of Tax Expenditures table is up-dated.
Finally, I am also advised by Revenue that a new reporting return is being developed by Revenue that will capture details of restricted share schemes (RSS). The new electronic share return is expected to be available from mid-June with an extended filing deadline for the first year, which will cover the 2020 tax year
528. Deputy David Cullinane asked the Minister for Finance the reason PAYE workers who were on the temporary wage subsidy scheme or the employment wage subsidy scheme but file taxes jointly with a self-employed person must pay tax due on the temporary wage subsidy scheme or the employment wage subsidy scheme payment in lump sum and not through tax credits as promised; if he will facilitate this for PAYE workers who file jointly with self-employed persons; and if he will make a statement on the matter. [20295/21]
View answerThe Temporary Wage Subsidy Scheme (TWSS) was introduced on 26 March 2020. It was legislated for in Section 28 of the Emergency Measure in the Public Interest (Covid-19) Act 2020 and was an emergency measure to deal with the impact of the Covid-19 pandemic on the economy. The Scheme operated until 31 August 2020 and was replaced by the Employment Wage Subsidy Scheme (EWSS) from 1 September 2020.
It will be recalled that in order to maximise the financial support provided to recipients, income tax and the Universal Social Charge (USC) on TWSS payments was not collected in real-time through the PAYE system and instead the liability for the 2020 tax year was determined at the end of the year.
I am advised by Revenue, that self-assessed taxpayers whether single or jointly assessed operate to different rules than PAYE taxpayers. The system to collect any underpayment from self-assessed taxpayers from their employment income in the same manner as happens for PAYE workers, such as by reducing the person’s tax credits over a number of years does not exist. A commitment to self-assessed taxpayers about the availability of collecting any tax liability by reducing tax credits over 4 years was not provided; instead Finance Act 2020 included income tax 2020 liabilities (including TWSS liabilities for self-assessed taxpayers) in the debt warehousing programme.
In the case of a PAYE worker who is jointly assessed with a self-employed person, any undercharges of tax and USC arising in 2020 from the TWSS are determined when the couple’s income tax return for the year is submitted. This return is due by 31 October 2021 (with a short extension provided for taxpayers who file electronically) and, in general, any balances due in such cases are settled by direct payment of the amount in question to the Collector General.
However, as the couple is subject to self-assessment and, provided they meet the conditions for income tax warehousing, they can warehouse all liabilities including any tax and USC liabilities relating to the PAYE worker’s TWSS payments. The general terms of the scheme as they apply to income tax can be found in section 3.2 of the Information Booklet on Debt Warehousing - https://www.revenue.ie/en/corporate/communications/documents/debt-warehousing-reduced-interest-measures.pdf.
This facility is not available to a couple whose income is taxed exclusively through the PAYE system. If the self-assessed couple does not qualify for debt warehousing for whatever reason, they should contact Revenue to discuss their options to repay the liability, including their capacity to agree a phased payment arrangement. Revenue is always willing to discuss the payments of arrears with taxpayers and to come to arrangements to ensure that mutually acceptable outcomes are achieved.
Regarding the Employment Wage Subsidy Scheme (EWSS), this was legislated for under the Financial Provisions (Covid-19) (No. 2) Act 2020. The specific nature and terms of the EWSS are separate and distinct from the TWSS. EWSS re-establishes the normal requirement to operate PAYE and normal PRSI on all payments made to the employee by the employer. Employers operate payroll as normal and report employer and employee deductions based on the employee’s appropriate existing tax credits and rate band; this ensures that payroll deductions operate as normal. I am advised by Revenue that no additional tax liability on the salary payments made should accrue to employees.
529. Deputy John Paul Phelan asked the Minister for Finance if the insurance section of his Department has conducted an analysis of issues in relation to the complications for persons seeking mortgage protection cover who have underlying but completely controlled medical conditions in accessing this vital protection; if his Department has proposals or suggestions for these persons to be able to access such cover; and if he will make a statement on the matter. [20315/21]
View answerSince the onset of COVID-19 in particular, I am aware of reports of some customers experiencing difficulties in obtaining mortgage protection cover as a result of having conditions deemed to be of a higher risk. As the Deputy will appreciate, while I have sympathy for the situation detailed, neither I, nor the Central Bank of Ireland, can interfere in the provision or pricing of insurance products or have the power to direct insurance companies to provide cover, including mortgage protection, to specific individuals or businesses. This position is reinforced by the EU Solvency II Directive insurance framework.
Notwithstanding the above, both I and Minister of State Fleming have consistently and publicly stated that in the context of COVID-19 we expect insurance firms to treat their customers fairly, honestly, and in accordance with the Central Bank’s Consumer Protection Code. Indeed, working to protect consumers during and after the COVID-19 pandemic is a commitment included in both the Programme for Government and Action Plan for Insurance Reform . Accordingly, the Government continues to engage with the insurance industry in relation to how it responds to, and works to protect its customer’s needs.
Minister of State Fleming held a meeting with Insurance Ireland, the representative body for such providers, in late February, which was also attended by An Tánaiste as well as Ministers of State English and Troy. The issue of mortgage protection insurance was discussed at this meeting and following it, Insurance Ireland wrote to myself and Minister of State Fleming. In that correspondence, it noted that given the ongoing pandemic, it is understandable that COVID-19 would be included in a new application. It said that it is unlikely that once the applicant has fully recovered from an illness that it would have an impact on the policy they are seeking to take out, although this does depend on the individual case, the severity of the impact of the infection and any residual complications. While aware of recent media reports about individual cases where cover has been declined, Insurance Ireland has not had reports of individuals being declined cover following recovery from COVID-19 from among its membership. It also noted that the continued rollout of the COVID-19 vaccination programme will have a positive impact in assessing the risk for individuals. Furthermore, Insurance Ireland will continue to keep in close contact with its members on this issue, which I welcome. That said, the Government will continue to engage bilaterally with the insurance industry on this issue. In this regard, I would note the recent meetings between the CEOs of the main insurers and Minister of State Fleming, who again raised this issue.
Finally, it is worth recalling that where somebody feels they have been treated unfairly by a particular insurance provider, they have the option of making a complaint to the Financial Services and Pensions Ombudsman (FSPO). The FSPO acts as an independent arbiter of disputes which consumers may have with their insurance company or other financial service provider. The FSPO can be contacted either by email at info@fspo.ie or by telephone at 01-567-700.
530. Deputy Eoghan Murphy asked the Minister for Finance if he has raised with the Central Bank the activities undertaken by a bank (details supplied) in relation to mortgage customers whose mortgages were securitised without their knowledge leading to their mortgage payments being collected by a different entity; if the rights of these customers have not been affected as a result; his views on whether such activities by the bank are within the scope of the legislation as intended; and if not, if the legislation will be amended. [20559/21]
View answerI am advised by the Central Bank consistently reviews the regulatory framework to ensure it is fit for purpose. In this context, the Central Bank advocated for a legislative regime whereby customers would be protected regardless of whether their loan was held by a bank or a non-bank.
As the Deputy is aware, the Consumer Protection (Regulation of Credit Servicing Firms) Act 2015 brought ‘credit servicing’– in effect interfacing with borrowers – under Central Bank regulation and supervision. This resulted in a significant strengthening of consumer protection for borrowers where loans had been sold by a bank, as the 2015 legislation meant consumer protection obligations would travel with loans when sold. In 2018, the Consumer Protection (Regulation of Credit Servicing Firms) Act 2018 (the 2018 Act) extended the definition of ‘credit servicing’ to also bring the owners of the legal title to credit directly under Central Bank regulation and supervision, and within the scope of the relevant consumer protection framework. This means that both loan owners and credit servicing firms must adhere to the same consumer protection requirements as the original regulated entity, including the Code of Conduct on Mortgage Arrears 2013 and the Consumer Protection Code 2012.
The 2018 Act excludes securitisation special purpose entities from the requirement to be authorised and regulated where
- the securitisation special purpose entity was established by or on behalf of the owner of credit as part of the securitisation arranged by or on behalf of that owner of credit,
- the owner of credit retains the legal title to the credit so assigned or otherwise disposed of,
- and the originator, sponsor or original lender of the securitisation is required to retain on an ongoing basis a material net economic interest in the securitisation of not less than 5 per cent.
While the Central Bank cannot comment on a specific transaction, it is important to note that loans involved in a securitisation transaction continue to be subject to all Central Bank requirements, including the Codes outlined above and the contractual rights of borrowers are not affected.
Beneficial owners were excluded from the scope of the 2018 Act as their inclusion could have had an impact on entities like passive securitisation vehicles. Irish and European banks use securitisation as a matter of course to raise funds for on-lending to the real economy, mortgage borrowers and SMEs who need access to credit. This is an important and ongoing aspect of the international financial system and passive securitisation vehicles do not have any implications for consumer protection.
If securitisation vehicles needed to be authorised and regulated, a number of unintended consequences may arise. For example, such vehicles could find it impossible to comply with the regulatory requirements of the Central Bank and therefore could be forced out of the market completely. Alternatively, they would have to take on staff and premises and adopt structures in order to meet these requirements and the costs of this would be factored in the price that buyers would be willing to pay for securitisations thereby increasing costs which are likely to be passed to consumer.
531. Deputy Eoin Ó Broin asked the Minister for Finance the status of the future of the National Asset Residential Property Services; and the options being considered for the future of the special purpose vehicle post the winding down of NAMA. [20663/21]
View answerAs the Deputy may be aware, National Asset Residential Property Services DAC (NARPS) is a NAMA subsidiary which operates by purchasing suitable residential units directly from NAMA debtors and receivers and leasing them on to Local Authorities or Approved Housing bodies for social housing use.
As regards the future plans for NARPS, the Deputy will note the recommendation regarding NARPS contained in my Section 227 Review of NAMA, published in July 2019. In recognition of the important role of NARPS in terms of social housing provision, I recommended that NAMA retains ownership of NARPS until it is in a position to be transferred to another State entity as part of NAMA’s terminal surplus of €4 billion. To support this recommendation, I issued a Direction to NAMA in September 2019 under Section 14(2) of the NAMA Act.
Suitable transfer options are currently being considered by my Department in the context of NAMA completing its wind down by end 2025.
532. Deputy Denis Naughten asked the Minister for Finance the month in which the new central bank Bill underpinning the implementation of the senior executive accountability regime will be published; if the public consultation process concerning the key aspects of SEAR will not be curtailed and that sufficient time for implementation of the new regime will be ensured by his Department; and if he will make a statement on the matter. [20664/21]
View answerAs the Deputy will be aware, the Programme for Government includes a commitment to introduce a Senior Executive Accountability Regime (SEAR). SEAR will drive positive changes in terms of culture, greater delegation of responsibilities, and enhanced accountability while simplifying the taking of sanctions against individuals who fail in their financial sector roles.
My officials are engaging with the Attorney General's Office in advance of submitting draft heads of Bill to Government so as to ensure that the correct balance is struck between appropriate additional powers for the Central Bank and the protection of individuals' constitutional rights.
It is my hope that the Heads of Bill can be published in July. This, however, will be subject to the Attorney General’s advice on the adequacy of the safeguards included to protect the constitutional rights at stake.
Clearly, the first step in the process is to get the heads of the Bill agreed and published by Government. This will allow the pre-legislative process to begin which will allow Deputies and other interested parties to make their views known.
After that, and on conclusion of the drafting phase, the timing of the passage of the Bill will be a matter for the Oireachtas.
With regards to the timing of how and when the Bill will be implemented, experience from other jurisdictions suggests that a change as significant as this will take some time to bed down.
The Central Bank has indicated that it intends to hold a public consultation on the implementation of the Bill following enactment of the legislation.
Nevertheless, it is my view that once the scheme of the legislation becomes clearer the financial sector will commence considering the implementation of the regime.
533. Deputy Mattie McGrath asked the Minister for Finance if his attention has been drawn to the fact that the banks are not allowing customers to draw down approved mortgages in cases in which their employers are on the employment wage subsidy scheme even in cases in which the customer in question is still working full-time and not in receipt of the pandemic unemployment payment (details supplied); if he will engage with the banking institutions to address the issue; and if he will make a statement on the matter. [20668/21]
View answerSince the COVID-19 situation first arose, I have maintained contact with the BPFI and lenders on the measures they have put in place to assist their customers who are economically impacted by the pandemic. In relation to the particular issue of new mortgage lending, the main retail banks previously confirmed that they are considering mortgage applications and mortgage drawdowns in relation to their customers who were on the Employment Wage Subsidy Scheme on a case by case basis and that they are taking a fair and balanced approach. Lenders continue to process mortgage applications and have supports in place to assist customers impacted by COVID-19. Therefore, if mortgage applicants have any queries or concerns about the impact of COVID-19 on their mortgage application, they should in the first instance contact their lender directly on the matter.
However, there are certain consumer protection requirements which govern the provision of mortgage credit. For example, the European Union (Consumer Mortgage Credit Agreements) Regulations 2016 (CMCAR) provide that, before concluding a mortgage credit agreement, a lender must make a thorough assessment of the consumer’s creditworthiness with a view to verifying the prospect of the consumer being able to meet his or her obligations under the credit agreement. The CMCAR further provide that a lender should only make credit available to a consumer where the result of the creditworthiness assessment indicates that the consumer’s obligations resulting from the credit agreement are likely to be met in the manner required under that agreement. The assessment of creditworthiness must be carried out on the basis of information on the consumer’s income and expenses and other financial and economic circumstances which are necessary, sufficient and proportionate.
In addition, the Central Bank’s Consumer Protection Code 2012 imposes ‘Knowing the Consumer and Suitability’ requirements on lenders. Under these requirements, lenders are required to assess affordability of credit and the suitability of a product or service based on the individual circumstances of each borrower. The Code specifies that the affordability assessment must include consideration of the information gathered on the borrower’s personal circumstances and financial situation. Furthermore, where a lender refuses a mortgage application, the CMCAR requires that the lender must inform the consumer without delay of the refusal. In addition, the Code requires that the lender must clearly outline to the consumer the reasons why the credit was not approved, and provide these reasons on paper if requested.
Within this regulatory framework, the decision to grant or refuse an application for mortgage credit remains a commercial matter for the individual lender. Also a loan offer may contain a condition that would allow the lender to withdraw or vary the offer if in the lender’s opinion there is any material change in circumstances prior to drawdown. In such cases, the decision to withdraw or vary the offer is also a commercial and contractual decision for the lender.
Nevertheless, the Central Bank has indicated that it expects all regulated firms to take a consumer-focused approach and to act in their customers’ best interests at all times, including during the COVID-19 pandemic. If a mortgage applicant is not satisfied with how a regulated firm is dealing with them in relation to an application for credit or the drawn down of credit, or they believe that the regulated firm is not following the requirements of the Central Bank’s codes and regulations or other financial services law, they should make a complaint directly to the regulated firm. If the mortgage applicant is still not satisfied with the response from the regulated firm, he or she can refer the complaint to the statutory Financial Services and Pensions Ombudsman.
534. Deputy Jim O'Callaghan asked the Minister for Finance the number of persons currently being supported by the employment wage subsidy scheme; the total expenditure on the scheme and its predecessor since March 2021; his plans to extend the scheme; and if he will make a statement on the matter. [20682/21]
View answerI assume the Deputy is seeking the total expenditure on the Employment Wage Subsidy Scheme (EWSS) and its predecessor, the Temporary Wage Subsidy Scheme (TWSS) since March 2020 and I will answer as such.
The TWSS was in place for 22 weeks between 26 March and 31 August 2020. It was introduced as an emergency income support for employees of vulnerable firms whose businesses had been negatively impacted by the restrictions that had to be introduced to stop the spread of the COVID-19 virus and whose turnover had reduced by at least 25% during Q2 while the strictest public health measures were in place. The support was paid via the employer so as to maintain employment links between the employee and employer insofar as was possible and, to that end, the rate of Employers' PRSI was also significantly reduced to 0.5%. The level of income given to each individual employee was based on previous wages received in January and February 2020. Over 66,500 employers received a subsidy under the TWSS with payments worth just under €2.9 billion paid out to a total of 664,000 workers.
The EWSS replaced the TWSS from 1 September 2020. The EWSS is an economy-wide scheme, the objective of which is to support 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.
In terms of the numbers of persons currently being supported by EWSS, the most recent data relate to the March 2021 where 309,000 employees were supported at a cost of €399.5 million in direct subsidy payments and a further €62.1 million in Employers' PRSI foregone. These figures are provisional and subject to revision.
The EWSS focuses primarily on business eligibility, delivering a per-head subsidy on a flat rate basis to the employer. The EWSS “turnover test” has been specifically designed so as to target the subsidy at otherwise viable employers whose businesses continue to be adversely impacted by COVID-19 by requiring a comparison of the firm’s pre-pandemic operations with their current operations. The legislation provides that the employer must be able to demonstrate that they are operating at no more than 70% in either the turnover of the employer’s business or the customer orders received by the employer in Q1 and Q2 2021 compared with the same period in 2019.
To date, including the March 2021 figures above, EWSS subsidy payments of over €2.7 billion have been made in addition to PRSI relief worth over €455m granted to over 48,500 employers in respect of over 549,600 employees.
I have been clear that there will be no cliff-edge to the EWSS and, as the Deputy will be aware from announcements made on Tuesday 23 February last, it has been decided that the scheme is now to be extended until the end of June 2021. Similarly, the COVID Restrictions Support Scheme has also been extended to end 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 June 2021.
As the revised plan is implemented, the EWSS will play an important role in getting people back to work as public health restrictions are eased, thereby reducing the numbers dependent on social welfare payments over time, including the Pandemic Unemployment Payment (PUP).
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 will continue to assess the effects of the Covid-19 pandemic on the economy and I will continue to work with Ministerial colleagues to ensure that appropriate supports are in place to mitigate these effects.
The Government remains fully committed to supporting businesses and employers insofar as is possible at this time.
535. Deputy Jim O'Callaghan asked the Minister for Finance the number of companies currently being supported by the Covid restrictions support scheme; the total expenditure on this scheme since its introduction; his plans to extend the scheme; and if he will make a statement on the matter. [20683/21]
View answerThe legislative basis for the Covid Restrictions Support Scheme (CRSS) is provided by Section 11 of the Finance Act 2020 and is available to companies, self-employed individuals and partnerships who carry on a trade or trading activities the profits of which are chargeable to tax under Case 1 of Schedule D.
A qualifying business must operate from a premises located in a region that is subject to restrictions introduced in line with the Government’s Living with COVID-19 Plan and must be required to either prohibit or significantly restrict customers access (to the premises) to purchase goods or services. Also, for the period of restrictions, the turnover of the business must not exceed 25% of its average weekly turnover in 2019 (2020 in the case of a new business). For the purposes of the scheme, a business premises is defined as a building or other similar fixed physical structure from which a business activity is ordinarily carried on.
As at 15 April, 22,000 businesses have registered 25,800 premises for CRSS with Revenue. 142,100 claims for CRSS payments of €464.3 million in respect of 24,500 premises have been made to date and €461.0 million of this has been processed for payment.
With regards to the extension of the scheme, in the context of the roll out of the Covid Plan, Covid-19 Resilience and Recovery 2021 The Path Ahead, the Government has accepted that public health restrictions will remain in place for some businesses through early spring, so has agreed that it is appropriate that business supports remain in place until at least the end of June 2021.
Motions seeking Dáil approval of the extension of the Covid Restrictions Support Scheme and the Employment Wage Subsidy Scheme to 30 June 2021 are scheduled for debate on Thursday 22 April.
Revenue has published detailed statistics on the main COVID-19 subsidy schemes since late March 2020, including the Temporary Wage Subsidy Scheme (TWSS), the Employment Wage Subsidy Scheme (EWSS) and the Covid Restrictions Support Scheme (CRSS). These statistics are available on the Revenue website and are updated on a weekly basis.
536. Deputy Eoin Ó Broin asked the Minister for Finance the progress made on strengthening the enforcement of the vacant site levy; if he has considered or is considering the introduction of a site value tax; and if he will make a statement on the matter. [20718/21]
View answerThe vacant site levy falls within the area of responsibility of the Minister for Housing, Local Government and Heritage and is not a matter for the Minister for Finance.
In relation to a site value tax, the 2012 report of the Inter-departmental Group on the Design of a Local Property Tax comprehensively examined the basis of assessment for the Local Property Tax (LPT), including both the taxable value of the property option and a site value tax (SVT). The report favoured the use of market value of residential properties as the basis of assessment and this recommendation was accepted by the Government.
The Group concluded that the arguments for SVT were outweighed by the likely difficulties in ensuring acceptance by taxpayers, i.e., arriving at values that were evidence based, understandable and acceptable to the public in addition to complexities and uncertainties in the valuation effort necessary to put an SVT in place. In contrast, the Group considered that under a market value approach applied to housing, the market value of a residential property would be related to the characteristics of the building itself, the site on which it was located and the characteristics and amenities of the neighbourhood. There would be a relationship between the market value of a house and benefits to the owners in terms of enjoyment of the amenity value of the properties.
At the request of the Minister for Finance, the operation of the LPT was reviewed in 2015 by Dr. Don Thornhill. A number of submissions to the review favoured changing the basis of determination of LPT liabilities to site value, floor area or variations thereof. Dr. Thornhill considered these but remained of the view that market value is the most appropriate and equitable basis on which to determine LPT liabilities. The 2019 Inter-departmental review of the LPT noted that a review of international practice suggests that market value is more commonly applied as a basis than site value. The 2019 Review Group accepted the rationale outlined in earlier reports and concluded that market value remained the best option as it was aligned with the guiding principles of transparency and equity.
Both Commissions on Taxation in 1985 and 2009 favoured property taxation based on market value citing inter alia significant difficulties in communicating to home-owners and land-holders the nature of the taxation charge that is involved and the benefits that would accrue from that change.
More recently the Government has approved the terms of reference of the new Commission on Taxation and Welfare which were published earlier this week, and include inter alia, consideration of "the appropriate role for the taxation and welfare system, to include an examination of the merits of a Site Value Tax, in achieving housing policy objectives. This consideration should include reviewing the sustainability of such a role. It should also have regard to the experience of previous interventions in the housing and construction market and the current significant State supports for housing provision ."
I look forward to seeing the outcome of the Commission’s deliberations in this area.
