Tuesday, 2 Nov 2021

Written Answers Nos. 241-258

Parking Provision

Questions (241)

Holly Cairns

Question:

241. Deputy Holly Cairns asked the Minister for Transport his views on removing the €35 application fee for the disabled person's parking card. [53375/21]

Written answers

Minister for Transport

The €35 charge for the Disabled Parking Permit is set by the issuing bodies (the Disabled Drivers Association of Ireland and the Irish Wheelchair Association). The purpose of this fee is, firstly, to cover the administrative costs of processing applications and producing permits and, secondly, to allow for investment in improving the security features of the card.

Greenhouse Gas Emissions

Questions (242)

Carol Nolan

Question:

242. Deputy Carol Nolan asked the Minister for Finance his views on the analysis published by the International Monetary Fund on 16 June 2021 which found that meeting the envisaged emission reduction target in Ireland’s Climate Action and Low Carbon Development (Amendment) Bill 2021 is estimated to require significant investment of close to €20 billion or 5 % of GDP 1 annually over the next ten years; and if he will make a statement on the matter. [51987/21]

Written answers

Minister for Finance

As the Deputy will be aware, the Climate Action and Low Carbon Development (Amendment) Bill as enacted in July 2021 includes an interim target for 2030 of reducing greenhouse gases by 51% relative to 2018. The process of drawing up an updated Climate Action Plan, as led by the Minister for Environment, Climate and Communications, to reflect this increase in ambition is underway, with the new Plan to identify and set out the far reaching policy changes across every sector to deliver the necessary emissions reductions. The updated Plan is to be published shortly. The Deputy will also be aware that on 25 October the Climate Change Advisory Council proposed Ireland’s first carbon budget programme, consistent with a 51% reduction in greenhouse gases in 2030 relative to 2018.

There is no doubt that delivery of this level of climate ambition will be very challenging and will require transformational change for society and the economy. This will entail additional investment, comprising of private investment and public expenditure. Regarding the latter, the recently published National Development Plan (NDP) sets out the appropriate level of capital spending for the economy over the period to 2030. The allocation of these resources was informed by the needs identified in the development of the NDP, including climate priorities.

Decisions in relation to the current expenditure implications of the Climate Action Plan will be facilitated within the overall expenditure ceilings set out in the Summer Economic Statement and re-iterated at Budget 2022. The ceilings tie expenditure growth to the long-term growth rate of the economy. Stable public finances are essential in allowing us to make the significant large scale investments in climate mitigation and adaption outlined in the NDP.

I would also highlight to the Deputy that the revenues projected to be raised by increases in the carbon tax are to be allocated for climate action purposes. The commitment to increase the carbon tax gradually over the next decade to reach €100 a tonne by 2030 was given a legislative basis in the Finance Act of 2020. Placing the commitment to raise the carbon tax into legislation allows for multi-annual planning on the use of the resulting funds. For example in 2022, the revenue resulting from carbon tax receipts available for investment is €412m. This is comprised of the revenue made available in 2021 (€148m) and 2020 (€90m) and the allocation of an additional €174m as part of Budget 2022.

Tax Code

Questions (243)

Jackie Cahill

Question:

243. Deputy Jackie Cahill asked the Minister for Finance if a person who has never received correspondence regarding paying their property tax faces penalties in addition to their local property tax bill; and if he will make a statement on the matter. [52045/21]

Written answers

Minister for Finance

Local Property Tax (LPT) operates on a self-assessment basis and as such requires relevant residential property owners to comply with their legal requirements even where they have not received a communication from Revenue. This includes determining the market value of the property at 1 November 2021 in respect of the new ‘valuation period’ (2022 to 2025), submitting this valuation in the LPT return by 7 November 2021 and confirming a payment method for 2022.

Revenue has advised me that it issued over 1.4 million notices to property owners in recent weeks outlining what is required to meet their LPT obligations for the new valuation period. These notices issued either through Revenue’s online systems or in hard copies through the postal system. The online notifications are available through the ‘My Documents’ service in MyAccount and the ‘Revenue Record’ service in ROS. A notice may not have issued to a relatively small number of property owners for a variety of reasons, for example where the property in question is not included on the LPT Register or the address on file is incorrect.

In either scenario, the onus is on the property owner to rectify the matter by registering the property on the LPT Register or amending the information on record if it is incorrect. These processes can be completed through the MyAccount, ROS or LPT online services. Alternatively, the necessary changes can be completed by contacting the LPT Helpline at 01-7383626 or by writing to Local Property Tax Branch, P.O. Box 100, Limerick.

Revenue’s clear preference is to work with property owners to ensure they become compliant with their LPT obligations rather than deploying debt collection/enforcement sanctions. This could include agreeing a mutually acceptable phased payment arrangement where full payment is not possible without causing financial hardship. However, where LPT returns are not filed and liabilities are not paid, interest will accrue and penalties may apply.

Finally, if the Deputy is aware of a property owner who is not compliant with his or her LPT obligations, either in respect of the current valuation period (2013 to 2021) or is experiencing difficulties in complying with the requirements for the new valuation period (2022 to 2025), he should advise the person to immediately contact Revenue at 01-7383626 to discuss the matter. Revenue has assured me that it will provide every assistance possible to help the person become LPT compliant.

National Asset Management Agency

Questions (244, 245)

Neasa Hourigan

Question:

244. Deputy Neasa Hourigan asked the Minister for Finance his plans to amend the National Asset Management Agency Act 2009 to allow NAMA to build affordable housing on its land holdings instead of the need to maximise commercial returns; and if he will make a statement on the matter. [52055/21]

Neasa Hourigan

Question:

245. Deputy Neasa Hourigan asked the Minister for Finance his plans to amend the National Asset Management Agency Act 2009 to restrict the sale of existing and new build property at an affordable price to individual home buyers and social housing providers; and if he will make a statement on the matter. [52056/21]

Written answers

Minister for Finance

I propose to take Questions Nos. 244 and 245 together.

As the Deputy will be aware, NAMA does not generally own properties, rather NAMA acquired loans for which the properties act as security. Secured properties remain in the ownership and control of their registered owners, or appointed receivers in the event of enforcement.

NAMA cannot restrict the sales of properties to specific purchasers below market value, as suggested by the Deputy, as this may have the effect of breaching its statutory commercial obligations under section 10 of the NAMA Act. In addition, it is important to note that NAMA’s debtors have the right to maximise the sales value of properties securing their loans so as to enable them to maximise their debt repayments. Therefore, NAMA cannot require a debtor to take action which would reduce his/her repayment capacity, such as selling a property for less than market value. Notwithstanding this, I am advised that the majority of NAMA-funded newly built residential units are sold to individual purchasers, many of them first-time-buyers.

Within the context of its overriding commercial mandate, I can advise the Deputy that NAMA has already made a significant contribution to social housing, including establishing a special vehicle (NARPS) to expedite delivery, which has leased 1,370 units to Local Authorities and Approved Housing Bodies. To date, NAMA has delivered over 2,640 homes for social housing. These figures exclude social housing delivered on NAMA-funded residential developments in compliance with Part V planning obligations.

NAMA was established as an independent commercial body with a very specific legal and commercial mandate, which was approved by the European Commission in 2010. It is important that NAMA’s role is preserved and that it completes its work in line with its original mandate; to achieve the best possible return to the State by protecting, enhancing where possible, and ultimately realising the value of assets it has acquired. NAMA has made considerable progress toward the achievement of its objectives and a key part of NAMA's remaining mandate will be to continue to make a significant contribution to the supply of housing within the State where it is in a position to do so. Accordingly, at this late stage in NAMA’s lifecycle, it is not my intention to amend its legislation.

Question No. 245 answered with Question No. 244.

National Asset Management Agency

Questions (246, 247, 253, 265, 266)

Neasa Hourigan

Question:

246. Deputy Neasa Hourigan asked the Minister for Finance his plans to amend the National Asset Management Agency Act 2009 to direct receivers to leave tenants in situ during sale of properties; and if he will make a statement on the matter. [52057/21]

Neasa Hourigan

Question:

247. Deputy Neasa Hourigan asked the Minister for Finance if NAMA can provide a map and details of lands it holds by location, size, planning permission and commercial viability analysis, respectively. [52058/21]

Cian O'Callaghan

Question:

253. Deputy Cian O'Callaghan asked the Minister for Finance if NAMA will make available a map and the details of land that NAMA holds by location, size, planning permission and commercial viability analysis; the details of its property portfolio locations and vacant units; the details of the person or body NAMA is selling its property to and the amount; if NAMA receivers are evicting any tenants; and if he will make a statement on the matter. [52075/21]

Joan Collins

Question:

265. Deputy Joan Collins asked the Minister for Finance the persons or bodies NAMA is selling its property to; the amount they are being sold for; and if NAMA receivers are evicting tenants. [52441/21]

Joan Collins

Question:

266. Deputy Joan Collins asked the Minister for Finance if he will provide a map and details of land that NAMA holds including location, size, planning permission and commercial viability analysis; and if he will provide a list of its property portfolio including locations and vacant units. [52442/21]

Written answers

Minister for Finance

I propose to take Questions Nos. 246, 247, 253, 265 and 266 together.

As the deputies may be aware, assets often referred to as "NAMA land" or "NAMA properties" are not owned by NAMA. NAMA owns loans. Such property is owned by private persons or companies who owe money to NAMA (“NAMA debtors”) and serves as collateral for those amounts owed.

I am advised that Sections 99 and 202 of the NAMA Act prohibit NAMA from disclosing confidential debtor information, including inter alia information on the specific location of assets owned by NAMA’s debtors, details on the purchasers of properties sold by NAMA’s debtors and receivers, or the sales prices attained. I will therefore respond to the deputies’ questions within this context.

I would firstly draw the deputies’ attention to the fact that, to date, NAMA has directly facilitated the delivery of 13,000 residential units on secured sites and a further 8,900 units have been built on sites which benefitted from NAMA funding but which were subsequently sold by current and former NAMA debtors and receivers.

I wish to point out that there has recently been some uninformed commentary on the amount of residential units that NAMA can and has delivered. It is important in that context to set out the factual situation regarding the restrictions under which NAMA operates.

- Firstly, NAMA does not own the development sites in its portfolio; rather these are owned by private entities (debtors). NAMA cannot force them to act in a manner which may hinder or reduce their repayment capacity.

- Secondly, NAMA must act in a market conform way; meaning the Agency cannot provide preferential funding terms to its debtors.

- Thirdly, many of the sites in NAMA’s portfolio are simply not suitable for residential development at present owing to a lack of appropriate planning, zoning, or essential infrastructure and services (roads, water, sewerage, utilities).

- Fourthly, the growth in property values has allowed a number of NAMA debtors to refinance their debt and exit NAMA with their landbanks. These sites will be developed with funding from their new lenders.

- Finally, under NAMA’s legislation, commercial viability is the most important and relevant criterion for NAMA-funded residential development. This basically means that NAMA can only finance developments that are expected to yield a profit – this is an important demonstration that NAMA is in compliance with EU State Aid rules.

On this basis, NAMA expects to directly deliver a further 2,000+ units from its secured portfolio.

Table 1 illustrates NAMA’s delivery potential based on the viability and profile of the remaining sites with planning permission in NAMA’s portfolio. I am advised that delivery of the 2,000+ units in the first 2 rows, (a) and (b), where it is indicated that funding is approved or under consideration, will be extremely challenging. NAMA’s objective is to make the sites under (d) and (e) as shovel ready as possible by achieving planning before disposal. The sites under (f) will only likely become available post-2025, but it is important to asset manage them between now and then by trying to resolve infrastructure and zoning, and ultimately planning.

Table 1: NAMA Residential Delivery Pipeline

NAMA delivery potential	(a) Under construction (600 units) or with funding approved (900 units)	1,500 units
(b) Planning permission granted and funding under consideration	800 units
Future delivery by private developers	(c) Planning permission granted but will be sold or refinanced by debtors	2,000 units
(d) Planning applications lodged and under consideration by the planning authorities	800 units
Long term (post-2025)	(e) Planning applications being prepared	3,200 units
(f) Longer term potential subject to viability, planning, various infrastructural requirements and zoning	11,700 units
Total		20,000 units

Land Assets

I am advised that NAMA debtors and receivers own an estimated 426 hectares of land that is potentially suitable for residential development in Ireland between now and 2035. It should be noted that only 63 hectares of this land has planning permission; the remaining 363 hectares does not yet have planning. Table 2 sets out the size, unit capacity, and local authority area of residential land with planning permission securing NAMA’s loan portfolio. This data excludes sites which are currently under construction or where funding is approved for construction (circa 1,500 units). NAMA regularly assesses the feasibility of sites with planning permission and, where development is deemed commercially viable, NAMA provides funding for the delivery of new residential units on the sites.

Table 2: Sites with planning permission

Local Authority Area	Potential Units	Site area (hectares)
Cork County Council	24	4
Dublin City Council	199	3
Dún Laoghaire-Rathdown County Council	745	14
Fingal County Council	411	15
South Dublin County Council	817	15
Wicklow County Council	549	12
	2,745	63

Table 3 details residential zoned land without planning permission owned by NAMA debtors and receivers. This data includes sites where planning permission is lodged, being prepared or which are subject to pre-planning and feasibility assessments. The development of the majority of sites in Table 3 can only occur over the medium to long term.

Table 3: Sites without planning permission

Local Authority Area	Potential Units	Site area (hectares)
Cork County Council	300	32
Dublin City Council	7,400	94
Dún Laoghaire-Rathdown County Council	720	7
Fingal County Council	4,751	136
Kildare County Council	1,340	37
Meath County Council	415	9
South Dublin County Council	110	10
Wexford County Council	436	15
Wicklow County Council	219	23
	15,691	363

Additionally, NAMA holds security over 212 hectares of unzoned land which is not yet included in any local authority development plans.

Vacant Units

As regards NAMA’s remaining property portfolio, the majority of the units are already rented. I am advised that there are 26 vacant and habitable residential units currently available to let within NAMA’s secured portfolio. This figure is at a point in time and reflects some of the frictional vacancy typical in a functioning property portfolio. I would point out that this figure excludes properties that are on the market for sale, being prepared for imminent sale, or contracted for sale and as a result are not available currently for letting. The figure also excludes properties that require fitout works or have a legal or other issue which needs to be resolved before they can be either rented or sold. NAMA debtors or receivers do not request people with leases to exit the property pre sale. NAMA is currently working with its debtors and receivers regarding appropriate strategies for these units, which includes assessing the suitability of the units for social housing. While NAMA does not own residential properties, it ensures that its debtors and receivers keep vacant periods in residential properties to a minimum and in instances where Local Authorities express an interest in any vacant units, NAMA facilitates the purchase of the units at market value.

Property Sales

NAMA’s legislation requires the Agency to obtain the best achievable value for its assets. I am advised that it is NAMA policy that sales of secured properties by debtors and receivers are openly marketed; accordingly, properties are typically sold to the highest bidder. Purchasers range from first-time-buyers to multi-national property investors. While NAMA cannot divulge the identity of purchasers, I am advised the majority of NAMA-funded newly built residential units are sold to individual purchasers.

Receiver Obligations

The deputies will be aware that receivers have independent fiduciary duties which they must fulfil and cannot take an action which would reduce a debtor’s repayment capacity, such as the sale of property at less than its market value. I, as Minister for Finance, have no role in respect of these obligations. That being said, I am advised that NAMA receivers do not typically seek vacant possession of residential properties before they are offered to the market for sale; this is particularly true for larger block sales of residential units. In cases where vacant possession is required, I am advised that, where possible, existing tenants are offered the opportunity to purchase the relevant property at market value.

Question No. 247 answered with Question No. 246.

Banking Sector

Questions (248)

Fergus O'Dowd

Question:

248. Deputy Fergus O'Dowd asked the Minister for Finance if he will respond to concerns raised by a person (details attached) in respect of the decision by a bank to close SME accounts in the UK.; and if he will make a statement on the matter. [52065/21]

Written answers

Minister for Finance

The Deputy will be aware that 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 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 AIB Relationship Framework can be found on my department's website.

In December 2020, AIB announced a revised three year strategy against the backdrop of three accelerated trends: digitalisation, ways of working and sustainability.

As part of this revised strategy, the bank is making changes to its AIB UK business model, that include the withdrawal from SME banking in Great Britain to focus on its corporate business, particularly in renewables, infrastructure, health and manufacturing. The bank will continue to provide Asset Finance, Invoice Discounting and Merchant Services to all business customers.

The bank has contacted its customers who are impacted by this and has established a dedicated customer helpline to provide further help and advice. If a customer is experiencing difficulty in securing another banking provider, its staff are available to assist on an individual basis.

Tax Code

Questions (249, 250, 251, 252)

Catherine Murphy

Question:

249. Deputy Catherine Murphy asked the Minister for Finance the estimated revenue that would be forgone by the Exchequer annually by making maternity benefit exempt from income tax; and if he will make a statement on the matter. [52070/21]

Catherine Murphy

Question:

250. Deputy Catherine Murphy asked the Minister for Finance the estimated revenue that would be forgone by the Exchequer annually by making adoptive benefit exempt from income tax; and if he will make a statement on the matter. [52071/21]

Catherine Murphy

Question:

251. Deputy Catherine Murphy asked the Minister for Finance the estimated revenue that would be forgone by the Exchequer annually by making paternity benefit exempt from income tax; and if he will make a statement on the matter. [52072/21]

Catherine Murphy

Question:

252. Deputy Catherine Murphy asked the Minister for Finance the estimated revenue that would be forgone by the Exchequer annually by making parents benefit exempt from income tax; and if he will make a statement on the matter. [52073/21]

Written answers

Minister for Finance

I propose to take Questions Nos. 249 to 252, inclusive, together.

I am advised by Revenue that a tentative estimate of the revenue foregone by exempting:

- maternity benefit from income tax is of the order of €45m;

- adoptive benefit from income tax is of the order of €0.04m; and

- paternity benefit from income tax is of the order of €2.6m.

I am advised by Revenue that it does not have information available yet in relation to the cost of exempting Parent's Benefit, as this was introduced in 2019 and the latest year for which a full set of income tax returns is available for analysis is 2018.

Finally, as a general rule, social welfare payments are taxable and exemption from taxation usually occurs only in cases where the payment in question is a mean-tested payment.

Question No. 250 answered with Question No. 249.

Question No. 251 answered with Question No. 249.

Question No. 252 answered with Question No. 249.

Question No. 253 answered with Question No. 246.

Tax Code

Questions (254)

Seán Canney

Question:

254. Deputy Seán Canney asked the Minister for Finance if he will consider a reduction in the rate of VAT for music and live entertainment performers from 23% to 9% to realign with the hospitality sector; and if he will make a statement on the matter. [52080/21]

Written answers

Minister for Finance

The VAT rating of goods and services is subject to EU VAT legislation with which Irish VAT law must comply. In general, the EU VAT Directive provides that all goods and services are liable to VAT at the standard rate, currently 23% in Ireland, unless they fall within categories of goods and services specified in Annex III of the VAT Directive, in respect of which Member States may apply a lower rate from VAT. Ireland, in line with the VAT Directive, also maintains several standstill provisions and derogations that allows it to maintain reduced rates to certain supplies for historical reasons. It is on this basis that Ireland has provided for an exemption from VAT to live theatrical or musical performances (excluding dances) where no food or drink is served. A reduced VAT rate of 9% applies to live theatrical and musical events where food or drink are available for consumption.

It is not possible under the VAT Directive to allow a reduced rate of VAT to be applied to the fee charged by a performer; this can only be applied to the promotion and admission charges. This means that where a band or entertainer is hired for a function such as a wedding, the hiring service is subject to the standard rate of VAT, currently 23%.

Tax Exemptions

Questions (255)

Michael Creed

Question:

255. Deputy Michael Creed asked the Minister for Finance the categories of income or property that are exempt from liability for the local property tax; and if he will make a statement on the matter. [52105/21]

Written answers

Minister for Finance

The Finance (Local Property Tax) Act 2012 (as amended) provides for certain properties to be exempt from LPT during the current valuation period (2013 to 2021) and the next valuation period (2022 to 2025) where they meet certain qualifying conditions. The full list of exemptions that apply for the new valuation period and how they can be claimed is available on the Revenue website.

It is important to note that certain exemptions that are available for the current valuation period will expire on 31 December 2021 and will not be available for the new valuation period. These include properties purchased as a home during 2013, properties in unfinished housing estates, unsold properties held by builders or developers and new or unused properties purchased from a builder or developer. The current exemption in respect of pyrite damaged properties is being phased out and will not apply after 21 July 2023. However, any properties that qualify for the exemption up to that date will benefit for the full six-year period from the next valuation date (i.e. from the following 1 November). The legislation also provides for an exemption from LPT for a period of six years for property owners who are eligible for the Defective Concrete Blocks Grant Scheme.

While the legislation does not provide for an exemption from LPT based on income levels, the option to defer liabilities remains in place where certain conditions are met. A deferral differs from an exemption in that the LPT liability remains as a charge against the property that must be paid before any sale or transfer of ownership can happen. The qualifying income thresholds for deferrals for the new valuation period are increased to €18,000 (from €15,000) for a single owner and €30,000 for a couple (from €25,000) while the applicable interest rate has been reduced from 4% per annum to 3% per annum from 1 January 2022. Further details on deferrals of LPT are available on the Revenue website.

Tax Reliefs

Questions (256, 257)

Eoin Ó Broin

Question:

256. Deputy Eoin Ó Broin asked the Minister for Finance the status of the comprehensive review into the disabled drivers and disabled passengers scheme; when proposals will be presented and considered by his Department; and when reforms to the criteria will take place. [52159/21]

Cormac Devlin

Question:

257. Deputy Cormac Devlin asked the Minister for Finance if any change has taken place over the past 12 months in relation to the disabled drivers and passengers scheme; and if he will make a statement on the matter. [52171/21]

Written answers

Minister for Finance

I propose to take Questions Nos. 256 and 257 together.

The Disabled Drivers & Disabled Passengers Scheme provides relief from Vehicle Registration Tax and VAT on the purchase and use of an adapted car, as well as an exemption from motor tax and an annual fuel grant.

The Scheme is open to severely and permanently disabled persons as a driver or as a passenger and also to certain charitable organisations. In order to qualify for relief, the applicant must hold a Primary Medical Certificate issued by the relevant Senior Area Medical Officer (SAMO) or a Board Medical Certificate issued by the Disabled Driver Medical Board of Appeal. Certain other qualifying criteria apply in relation to the vehicle, in particular that it must be specially constructed or adapted for use by the applicant.

To qualify for a Primary Medical Certificate an applicant must be permanently and severely disabled, and satisfy at least one of the following medical criteria, in order to obtain a Primary Medical Certificate:

- be wholly or almost wholly without the use of both legs;

- be wholly without the use of one leg and almost wholly without the use of the other leg such that the applicant is severely restricted as to movement of the lower limbs;

- be without both hands or without both arms;

- be without one or both legs;

- be wholly or almost wholly without the use of both hands or arms and wholly or almost wholly without the use of one leg;

- have the medical condition of dwarfism and have serious difficulties of movement of the lower limbs.

The current medical criteria medical criteria were included in the Finance Act 2020, by way of amendment to Section 92 of the Finance Act 1989. This amendment arises from legal advice in light of the June 2020 Supreme Court judgement that the medical criteria in secondary legislation was not deemed to be invalid, nevertheless it was found to be inconsistent with the mandate provided in Section 92 of the Finance Act 1989 (primary legislation).

While I am very aware of the importance of this scheme to those who benefit from it, I am also aware of the disquiet expressed by members of this house and others in respect of the difficulties around access to the scheme. With this in mind I provided an undertaking to review the scheme, including a broader review of mobility supports for persons with a disability. My officials have been carrying out preliminary work, including an examination of the main issues which will frame the scope of the review and engaging with other Departments and agencies.

Separately, I have reached out to the Minister for Children, Equality, Disability, Integration and Youth, in the context of a review that was commenced in March 2020 under the auspices of the National Disability Inclusion Strategy, to examine transport supports encompassing all Government funded transport and mobility schemes for people with disabilities. Its work was interrupted by the COVID-19 pandemic. Minister O’Gorman has confirmed that he has asked his officials to reconvene the working group established to carry out that review at the earliest opportunity and we are both agreed that this is the most appropriate forum for the review. With this in mind, my officials will work closely with officials from the Department of Children, Equality, Disability, Integration and Youth to progress this review, and on foot of that will bring forward proposals for consideration.

Question No. 257 answered with Question No. 256.

Insurance Coverage

Questions (258)

Catherine Murphy

Question:

258. Deputy Catherine Murphy asked the Minister for Finance if he has engaged with insurance providers in respect of their lack of consistency regarding the way in which and the grounds on which they refuse to provide insurance cover in areas that are not identified as flood risk by the OPW in the context of their mapping and modelling of flood risk areas. [52191/21]

Written answers

Minister for Finance

As Minister for Finance, I am responsible for the development of the legal framework governing financial services regulation, including for the insurance sector. However, the provision of cover is a separate commercial matter for insurance companies based on an assessment of the risks they are willing to accept. Consequently, neither I nor the Central Bank of Ireland can interfere in the provision or pricing of insurance products, as reinforced by the EU framework for insurance (Solvency II Directive).

The Office of Public Works (‘OPW’) is the lead agency for flooding matters. I am informed that the OPW flood maps are community based and as such, they do not designate individual properties at risk. While these maps are available to the public, users are not permitted to use the flood maps for commercial purposes. As such the insurance industry has highlighted to the OPW that it does not use its flood maps to inform its flood modelling. At a general level, it is my understanding that firms examine the claims history of the individual risk, the risk of flooding in the area and consider any flood protection measures when deciding what underwriting action to take.

The Government has committed circa €1 billion to the delivery of these flood relief schemes over the lifetime of the National Development Plan to 2030 to protect approximately 23,000 properties in threatened communities from river and coastal flood risk. This investment is the cornerstone of the Government’s policy on flood insurance which is focused on sustainable flood risk management. Where defences have been built there is a reasonable expectation that insurers will provide cover.

The Department of Finance is engaging with Insurance Ireland, the OPW, the Department of Housing and Local Government and other stakeholders through the OPW-led Memorandum of Understanding Working Group regarding how the levels of insurance cover might be improved in areas where flood defence works have been completed. Furthermore, the Deputy should be aware that flood insurance matters were also discussed by the Cabinet Committee Sub Group on Insurance Reform on 20 October 2021.

This is a difficult issue, however please be assured that both I and Minister of State Fleming will continue to engage on all aspects of insurance reform, including flood insurance issues, and that every effort is being made to encourage a responsive approach from the insurance industry.