Written Answers Nos. 223-249
223. Deputy Pearse Doherty asked the Minister for Finance if he will consider legislative changes to monitor the passing on of savings from insurers to consumers; and if he will make a statement on the matter. [8772/22]
View answerI note that the question refers to the impact of the Personal Injuries Guidelines on insurance premiums. At the outset, I would like to point out that there is no single solution to reducing insurance costs. This is why the Government is pursuing insurance reform on a whole-of-Government basis, through 66 cross-departmental actions in the Insurance Reform Action Plan, including, but not limited to, the Personal Injuries Guidelines.
The National Claims Information Database (NCID) has already proven to be an excellent tool when it comes to collecting information on the cost of claims and pricing trends. The NCID will continue to contribute to evidence-based decision making and will help to provide greater market-focussed transparency in the insurance sector.
The Central Bank indicated in its most recent NCID Motor Report that it intends to collect additional claim settlement data for all classes of business within the remit of the NCID so as to obtain further information on the impact of the Personal Injuries Guidelines on claims settlement. I understand that it intends to collect data that will allow it to distinguish claims settled under the new Guidelines from those settled under previous arrangements (i.e. the Book of Quantum), which will provide insight into the impact of the Guidelines on settling claims.
In light of these proposed enhancements, I believe that the NCID remains an effective mechanism to objectively monitor whether savings arising from the Guidelines, as well as the suite of other reform measures being pursued by this Government, are being passed on to customers. Accordingly, no further legislative changes are necessitated at this point.
224. Deputy Pearse Doherty asked the Minister for Finance the cost to the Exchequer of tax relief on pension contributions in 2019, disaggregated by salary band in intervals of €10,000, in tabular form. [9140/22]
View answer225. Deputy Pearse Doherty asked the Minister for Finance the number of persons who availed of tax relief on pension contributions in 2019, disaggregated by salary band in intervals of €10,000, in tabular form. [9141/22]
View answerI propose to take Questions Nos. 224 and 225 together.
I am advised by Revenue that the available information in relation to the cost of tax relief on pension contributions is available on the Revenue website at: www.revenue.ie/en/corporate/documents/statistics/tax-expenditures/costs-tax-expenditures.pdf.
The information includes the number of taxpayers availing of the relief as well as the total cost, broken down by year up to 2018, the latest year for which data are currently available.
The information at the link reflects the totals for each year. Information on pension contributions at individual (employee) level was not separately recorded on tax returns prior to 2019. However, following changes to the PAYE system, the information sought by the Deputy will become available in the coming weeks for 2019 and for subsequent years as soon as possible thereafter. The data will be published on the Revenue website once available.
226. Deputy Michael Healy-Rae asked the Minister for Finance when a rebate will issue to a person (details supplied); and if he will make a statement on the matter. [9145/22]
View answerI can confirm that this fuel grant claim was processed and paid as part of second claim file for January and should be with the claimant now.
229. Deputy Réada Cronin asked the Minister for Finance if his Department will examine a situation (details supplied) and the issues it raises for parents in a similar situation; and if he will make a statement on the matter. [9184/22]
View answerThe Single Person Child Carer Credit (SPCCC) is a tax credit that is available to a single person who has a qualifying child resident with him or her for the whole or greater part of the tax year and who satisfies the other conditions of the relief. To qualify as a single person for the purposes of the SPCCC, the claimant must not be jointly assessed for income tax as a married person or civil partner, or be living with his or her spouse or civil partner, or be cohabiting with a partner.
The value of the credit is €1,650 for each tax year. In addition to the credit, a claimant is entitled to an additional €4,000 on the standard rate income tax band. An individual can only receive one SPCCC irrespective of the number of qualifying children residing with him or her.
The credit is ordinarily given to the primary claimant. The primary claimant is the individual who proves that a qualifying child resides with him or her for the whole or the greater part of the tax year (i.e. a period greater than six months) and that the child is either his or her own or has been placed in his or her custody. A primary claimant can relinquish entitlement to the SPCCC to a secondary claimant. The secondary claimant can then claim the credit if he or she qualifies as a single person and the qualifying child resides with him or her for at least 100 days throughout the tax year. Detailed information on the SPCCC can be found on Revenue’s website at: www.revenue.ie/en/tax-professionals/tdm/income-tax-capital-gains-tax-corporation-tax/part-15/15-01-41.pdf, which may be of interest to the Deputy.
I am advised by Revenue that it has reviewed the changed circumstances of the person in question and is satisfied that he now has full custody of one child while continuing to share custody for the second child and on that basis is entitled to claim the credit as a primary claimant. Revenue has confirmed that it will make direct contact with the person to assist him with the application process and to clarify any other questions that he may have.
231. Deputy John Lahart asked the Minister for Finance if he plans to change the measure whereby a childless, single person can only leave substantially less to a sibling, niece or nephew free of inheritance tax than to a son or daughter, who can inherit €335,000 from a parent before paying the tax; and if he will make a statement on the matter. [9267/22]
View answerAs the Deputy is aware, for Capital Acquisitions Tax (CAT) purposes, the relationship between the person giving a gift or inheritance (i.e. the disponer) and the person who receives it (i.e. the beneficiary) determines the maximum amount, known as the “Group threshold”, below which CAT does not arise.
The Group A threshold (currently €335,000) applies, inter alia, where the beneficiary is a child (including adopted child, stepchild and certain foster children) of the disponer. The Group B threshold (currently €32,500) applies where the beneficiary is a brother, sister, nephew, niece or lineal ancestor or lineal descendant such as a grandchild of the disponer. The Group C threshold (currently €16,250) applies in all other cases.
Any prior gift or inheritance received by a beneficiary since 5 December 1991 from within the same Group threshold is aggregated for the purposes of determining whether any tax is payable on a benefit. Where a person receives gifts or inheritances that are in excess of his or her relevant tax-free threshold, CAT at a rate of 33% applies on the excess benefit.
While a disponer may have no natural children, any stepchildren, adopted children or certain foster children can avail of the Group A threshold in respect of gifts and inheritances received from that disponer.
In addition, nieces or nephews of that disponer may qualify for favourite niece or favourite nephew relief in respect of gifts or inheritances of business assets. The relief allows a niece or nephew who qualifies for the relief to avail of the Group A threshold. Qualifying nieces or nephews are those who have worked substantially on a full-time basis for a period of five years prior to the gift or inheritance being given in carrying on, or assisting in the carrying on, the trade, business or profession, of the disponer.
For the nephew or niece to be deemed to be working substantially on a full-time basis in the business he or she must work:
- more than 24 hours per week at the place where the business, trade or profession is carried on; or
- more than 15 hours per week at the place where the business, trade or profession is carried on exclusively by the disponer, any spouse or civil partner of the disponer and the nephew or niece.
The options available for providing increases to CAT thresholds are considered in the context of available resources as part of the annual budgetary process and like all matters need to be balanced against competing demands. At the moment, I do not believe that a compelling case can be made for increasing the CAT Group threshold that applies to a sibling, niece or nephew.
232. Deputy Brian Stanley asked the Minister for Finance the total spend related to the special assignee relief programme in each of the years 2020 and 2021. [9309/22]
View answerThe Finance Act 2012 introduced section 825C to the Taxes Consolidation Act, 1997. This section, as amended, provides Income Tax relief for certain individuals assigned during any of the tax years 2012 to 2022 to work in the State. The relief is commonly known as SARP (Special Assignee Relief Programme).
The aim of the relief is to reduce the cost to employers of assigning skilled individuals in their companies from abroad to take up positions in the Irish-based operations of their employer or an associated company, thereby facilitating the creation of jobs and the development and expansion of businesses in Ireland.
SARP provides for relief from Income Tax on 30% of income over €75,000, subject to an upper income threshold of €1,000,000, where applicable. There is no exemption from USC. PRSI is payable where the individual is not liable to social insurance contributions in his or her home country. School fees of up to €5,000 per annum and expenses incurred on one trip home per year, where they are paid for by the employer, are not subject to Income Tax, USC or PRSI.
I am advised that the latest costs available for the Special Assignee Relief Programme (SARP) can be found in the 2019 SARP report which is published on the Revenue website and as part of the Budget 2022 Tax Expenditures Report on the Government's Budget 2022 website.
The cost of SARP for 2018 and 2019 (the latest year for which data are available) is set out below.
|
SARP |
2018 |
2019 |
|
Cost (€m) |
42.4 |
38.2 |
I expect that figures in relation to 2020 will be published later this year and that figures in respect of 2021 will become available next year.
233. Deputy Michael Creed asked the Minister for Finance if consideration has been given to raising the age threshold for stamp duty exemption with particular reference to the next Common Agricultural Policy, CAP, period, land mobility ambition and for farmers who did not avail of green certificate courses during Covid-19 due to pandemic circumstances; and if he will make a statement on the matter. [9323/22]
View answerMy Department carried out a review of the age limits applicable to four agri-tax reliefs last year. The findings of this review are set out as part of the Report on Tax Expenditures 2021 which was published on 12th October on the Gov.ie website as part of the package of papers associated with Budget 2022.
The four agri-tax reliefs/tax credits covered, where eligibility is (amongst other factors) determined subject to an age limit, are:
1. Stock relief for young trained farmers (section 667B of the Taxes Consolidation Act 1997)
2. Stock relief for registered farm partnerships (section 667C of the TCA 1997)
3. Succession Farm Partnerships (Tax Credit) (section 667D of the TCA 1997)
4. Young trained farmer (stamp duty) relief (section 81AA of the Stamp Duties Consolidation Act 1999)
The report found that the age limits currently in place for each of these are consistent amongst themselves, and that they remain appropriate in the context of their intended purpose.
It also noted that introducing special exemptions from those age limits, even in limited circumstances would both add complexity to, and weaken the intended impact of, the age limits currently in place.
The report therefore recommended that no changes in the age limits applicable to the four reliefs concerned be recommended to me.
In relation to the situation that was applicable over the course of the Covid-19 pandemic, I am informed that, as with many other businesses, providers of the Green Cert. responded to the impact of the pandemic with contingency arrangements to ensure continuity of service.
Teagasc continued to deliver existing Level 5 and Level 6 green cert programmes in agricultural colleges and regional centres in accordance with the national Covid-19 guidelines for provision of further and higher education. Contingencies were introduced in line with QQI guidance which enabled Teagasc programmes (full-time, distance education and part-time) to maintain their schedule of delivery. This included increased use of online learning technology to support teaching and learning in addition to on-campus skills training.
Teagasc also continued to recruit students and has commenced a number of new green cert programmes nationwide over the past two years, with over 30 part-time/distance education green cert courses commencing during 2021 alone.
I therefore see no need to provide any extension of, or exemption from, the age limits currently in effect.
234. Deputy Marian Harkin asked the Minister for Finance if he will consider increasing the threshold for the value of gifts received from outside of the European Union before customs will be charged (details supplied); if he will investigate this anomaly; and if he will make a statement on the matter. [9336/22]
View answerI am advised by Revenue that the provisions for the relief of Customs Duty and VAT for gifts sent from one private individual in a non-EU country to another private individual in Ireland are set out in European legislation and it is not a matter on which Ireland can determine or apply separate provisions. The relief for gifts is agreed and harmonised at EU level and the provisions are common throughout the 27 EU Member States.
Under EU legislation, the relief of Customs Duty and VAT for gifts applies where the Customs Value of the consignment sent is less than €45. The Customs value is the value of the item plus the cost of transport and insurance. This also includes the cost of postage where consignments are sent via the postal network. Where the value of the gifts imported from outside of the European Union exceeds this €45 threshold, then the applicable rates of Customs Duty and VAT apply.
236. Deputy Emer Higgins asked the Minister for Finance if his Department is considering reducing the VAT rate to 9% for dry-cleaning businesses in line with all other sectors of the hospitality industry; and if he will make a statement on the matter. [9429/22]
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 general, the EU VAT Directive provides that all goods and services are liable to VAT at the standard rate, 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. The scope under the VAT Directive to apply a 9% rate is limited to certain categories, including tourism and hospitality related goods and services, but this does not include dry-cleaning and laundry services, which remain liable at the 13.5% rate.
237. Deputy Ged Nash asked the Minister for Finance the status of the transposition of the pan-European personal pension product regulation; the expected timeline for the transposition of the regulation into Irish law; and if he will make a statement on the matter. [9505/22]
View answerThe objective of the Pan-European Personal Pension Product Regulation is to lay the foundations for a safer, more cost-efficient and transparent market in affordable and voluntary personal pension savings that can be managed on a pan-European scale. It is envisaged that the PEPP framework will constitute a complementary voluntary scheme alongside national regimes.
The European Commission proposal for a Pan-European Personal Pension Product was adopted by Council in 2019. Separately, the Level II Regulatory Technical Standards were approved by Council and published in March 2021. Accordingly, the Pan-European Personal Pension Product Regulation is scheduled to enter into application on 22 March 2022 - a year from the publication of the technical standards.
My Department had domestic responsibility for negotiating this file and has engaged with key domestic stakeholders such as the Department of Social Protection, the Pensions Authority, the Central Bank of Ireland and the Office of the Revenue Commissioners, as well as with market participants, as part of the negotiation process.
Work is ongoing on the necessary transposition with a view to completing the work within the time-frame and my Department will keep the EU authorities updated on progress. The first PEPP products may be expected to come to markets with the EU this year. Providers and distributors will follow the normal approval process through the relevant national authorities to ensure they and their products comply with the necessary requirements.
238. Deputy Pearse Doherty asked the Minister for Finance the number of applications made to the disabled drivers and disabled passengers scheme in each of the years from 2018 to and including 2021. [9530/22]
View answer239. Deputy Pearse Doherty asked the Minister for Finance the number of applications made for the primary medical certificate with respect to the disabled drivers and disabled passengers' scheme in each of the years from 2018 to and including 2021; the number of applications rejected in each of those years; the number of applications that were rejected and subsequently appealed to the disabled drivers medical board of appeal; and the number of those appeals which were rejected or accepted in tabular form. [9531/22]
View answerI propose to take Questions Nos. 238 and 239 together.
The Disabled Drivers & Disabled Passengers Scheme (DDS) provides relief from VRT and VAT on the purchase and use of an adapted car, as well as an exemption from motor tax and an annual fuel grant.
The Scheme is open to severely and permanently disabled persons who also meet one of six specified medical criteria, as a driver or as a passenger and also to certain 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. In the event that a PMC is not granted by the relevant Senior Area Medical Officer an appeal may be made to the independent Disabled Drivers Medical Board of Appeal (DDMBA) who operate out of the National Rehabilitation Hospital in Dun Laoghaire.
The number of applications for a Primary Medical Certificate and the number of those that were successful are a matter for the HSE. The below table outlines the PMC assessment data for 2021 as recently supplied by the HSE.
Primary Medical Certificates - data at December 2021
|
CHO Area |
Number of applications for a primary medical certificate received in 2021 |
Number of applications for a primary medical certificate approved in 2021 |
Number of applications for a primary medical certificate which were not approved (application not successful) in 2021 |
Number of people waiting to be assessed for a primary medical certificate at December 2021 |
|
CHO 1 |
285 |
170 |
80 |
75 |
|
CHO 2 |
498 |
430 |
247 |
46 |
|
CHO 3 |
401 |
229 |
172 |
87 |
|
CHO 4 |
680 |
287 |
315 |
82 |
|
CHO 5 |
309 |
149 |
97 |
63 |
|
CHO 6 |
170 |
125 |
40 |
5 |
|
CHO 7 |
241 |
135 |
108 |
21 |
|
CHO 8 |
440 |
232 |
134 |
69 |
|
CHO 9 |
249 |
186 |
49 |
5 |
|
Total |
3,273 |
1,943 |
1,242 |
453 |
Primary Medical Certificates - data at December 2021
|
CHO Area |
Number of applications for a primary medical certificate received in 2021 |
Number of applications for a primary medical certificate approved in 2021 |
Number of applications for a primary medical certificate which were not approved (application not successful) in 2021 |
Number of people waiting to be assessed for a primary medical certificate at December 2021 |
|
CHO 1 |
285 |
170 |
80 |
75 |
|
CHO 2 |
498 |
430 |
247 |
46 |
|
CHO 3 |
401 |
229 |
172 |
87 |
|
CHO 4 |
680 |
287 |
315 |
82 |
|
CHO 5 |
309 |
149 |
97 |
63 |
|
CHO 6 |
170 |
125 |
40 |
5 |
|
CHO 7 |
241 |
135 |
108 |
21 |
|
CHO 8 |
440 |
232 |
134 |
69 |
|
CHO 9 |
249 |
186 |
49 |
5 |
|
Total |
3,273 |
1,943 |
1,242 |
453 |
The below table outlines the number of appeals heard by the Disabled Drivers Medical Board of Appeal and, of those, the numbers that were successful and unsuccessful.
|
Disabled Drivers Scheme |
2018 |
2019 |
2020 |
2021 |
|
New appeals |
674 |
684 |
204 |
382 |
|
Number of Appeals Assessed |
386 |
424 |
116 |
148 |
|
Number of Successful Appeals |
20 |
9 |
4 |
12 |
|
Number of Unsuccessful Appeals |
366 |
415 |
112 |
136 |
*260 appeals outstanding at 01/2017
**Appeal hearings were lower than usual for 2020 due to both public health considerations and the Supreme Court Case in June 2020. Appeal hearings resumed in early 2021 following an amendment to the Finance Bill to provide for the existing medical criteria in primary legislation which, following the approval of the Finance Act 2020, allowed assessments to recommence.
***2021 appeal hearings have also been impacted by the Covid-19 pandemic.
240. Deputy Pearse Doherty asked the Minister for Finance the annual cost of the disabled drivers and disabled passengers scheme to the Exchequer in each of the years 2016 to 2021. [9555/22]
View answerThe Disabled Drivers & Disabled Passengers Scheme (DDS) provides relief from VRT and VAT on the purchase and use of an adapted car, as well as an exemption from motor tax and an annual fuel grant.
The Scheme is open to severely and permanently disabled persons who also meet one of six specified medical criteria, as a driver or as a passenger and also to certain 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. In the event that a PMC is not granted by the relevant Senior Area Medical Officer an appeal may be made to the independent Disabled Drivers Medical Board of Appeal (DDMBA) who operate out of the National Rehabilitation Hospital in Dun Laoghaire.
The table below outlines the costs of the DDS Scheme and the Fuel Grant Scheme for the years 2016-2021. These figures do not include the revenue foregone in respect of the relief from Motor Tax provided to members of the Scheme.
|
Year |
2016 |
2017 |
2018 |
2019 |
2020 |
2021 |
|
Cost of scheme (€ m) |
65 |
65 |
70 |
72 |
67 |
68 |
241. Deputy Michael Ring asked the Minister for Finance the amount that his Department has paid for advertising, features and so on in a magazine (details supplied). [9574/22]
View answerI can advise the Deputy that the Department of Finance has no record of any payments for advertisements or content in the publication mentioned.
243. Deputy Sorca Clarke asked the Minister for Finance the number of applications for exemption from income tax in respect of certain payments made under employment law as updated in May 2021; the number of applications approved; the number refused and the number granted upon appeal by the relevant Act in each of the years 2018 to 2021, in tabular form; and if he will make a statement on the matter. [9600/22]
View answerIt is my understanding that the Deputy is referring to section 192A of the Tax Consolidation Act 1997, which deals with exemptions in respect of certain payments made by employers to employees arising from claims under employment law.
Section 192A provides that compensation payments made to an employee will be exempt from income tax, universal social charge and PRSI in instances where the employee’s statutory rights or entitlements, or an employer’s obligations under employment legislation, have been infringed or breached.
The exemption provided for by section 192A applies to payments arising out of claims made under a “relevant Act” following a formal hearing before a “relevant authority”, on foot of a recommendation, decision, or determination by that relevant authority. The exemption also applies to payments made under an out of court settlement, in place of a formal hearing before a relevant authority, which has been agreed between an employee and his or her employer, subject to certain conditions being met.
I am advised by Revenue that its Tax Duty Manual Part 07-01-27 - Exemption from Income Tax in respect of Certain Payments made under Employment Law offers extensive guidance on the application of this exemption.
The update in May 2021 referred to in the question relates to an amendment to the aforementioned Tax Duty Manual, where paragraph 4 “Out of Court Settlements” was updated to outline on what information should be included in such a settlement agreement and the format it should take – “the format of the employee’s original statement of claim, which must be evidenced in writing, and the details to be included in same, will vary depending on the facts and circumstances of each individual case. However, such written documentation may reasonably be expected to include information such as the nature of the claim, the nature of the relationship between the parties involved or a high-level summary of the allegations and the impact of same. The employee need not engage an external advisor to prepare such written documentation on their behalf and there is no requirement for the statement of claim to have been formally submitted to a relevant Authority, provided all other conditions set out above are met.”
Where payments are made under the provisions of section 192A, generally a self-assessment approach applies and Revenue approval is not obligatory. However, it is possible for an employer to seek Revenue approval if there is any doubt as to the application of the exemption. As there is no formal application or approval process, Revenue advise that the details requested are not available. However, it is important to note however, that where such payments to employees are encountered during the course of a Revenue compliance intervention, details of the payment would be examined to ensure they meet the requirements of the legislation.
244. Deputy Ged Nash asked the Minister for Finance his plans to abolish the prohibitive VAT rate on defibrillators; and if he will make a statement on the matter. [9648/22]
View answer250. Deputy Niamh Smyth asked the Minister for Finance if a matter raised in correspondence by a person (details supplied) in relation to the removal of VAT on defibrillators will be examined; the status of same; and if he will make a statement on the matter. [9729/22]
View answerI propose to take Questions Nos. 244 and 250 together.
As the Deputies will be aware, the EU Commission published a proposal on the reform of VAT rates in January 2018 which would allow Member States more flexibility in how they apply VAT rates. The compromise text agreed at ECOFIN in December has been amended significantly in comparison to the original proposal so the EU Parliament will once again be consulted for their opinion.
Once the Parliament has issued its opinion on the proposal, the Council will formally adopt the directive. It will then enter into force on the twentieth day following that of its publication in the Official Journal of the European Union.
In the interim officials in my Department will be reviewing the options now available to Ireland in setting VAT rates. Future 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.
245. Deputy Carol Nolan asked the Minister for Finance if he will provide an update on the status of the universal social charge; if there are plans to abolish or substantially reduce the universal social charge or incorporate it into the wider taxation system such as PRSI; and if he will make a statement on the matter. [9270/22]
View answerThe USC was designed and incorporated into the Irish taxation system in 2011 to replace two other charges, namely the Health and Income Levies. Its primary purpose was to widen the tax base and to provide a steady income to the Exchequer to provide funding for public services.
The USC is an individualised tax, meaning that a person’s liability to the tax is determined on the basis of his/her own individual income and personal circumstances. The USC is applied at a low rate on a wide base, which ensures that it is a stable and sustainable source of revenue for the State.
Currently individuals with incomes of less than €13,000 are exempt from USC. For 2022, it is estimated that 28% of all taxpayer units will be exempt from USC. I would also note that in recent Budgets, including Budget 2022, this Government actively increased the USC ceiling for the 2% rate in line with increases to the national minimum wage, to ensure that a full-time adult worker who benefits from the increase in the hourly minimum wage rate would remain outside the top rates of USC.
The USC has played a vital part in meeting the many expenditure demands placed on the Exchequer. USC receipts have been central to the current stability of the public finances since March 2020, despite the challenges arising from the Covid-19 pandemic.
Receipts from the USC in 2021 amounted to €4.4 billion – 16.5% of total income tax receipts or 6.4% of total Exchequer receipts. The projected USC yield for 2022 is broadly similar. If USC were to be abolished, it would be necessary to raise approximately €4.4 billion from other sources.
In 2016, joint Department of Finance/Economic and Social Research Institute (ESRI) research found that USC represented a more stable form of revenue than income tax. The findings highlighted that USC revenues would fluctuate by less than income tax revenues whenever income is volatile, for example where the economy moves from a boom into a bust. Given the openness of the Irish economy and consequent susceptibility to economic shocks, the contribution that the USC makes to the stability of the State’s revenue sources is considerable.
The Deputy may wish to note that an inter-departmental working group was established in February 2018 to examine and report on options for the amalgamation of USC and PRSI over the medium-term. The Report of the Working Group can be located here: //assets.gov.ie/180893/1c9cd219-fb8a-47d2-86c3-d1cd9c3bcf03.pdf.
The report acknowledged the complexity of the amalgamation proposal and confirmed that there is no single option that can deliver the proposed amalgamation without leading to implications at the individual level, with some people paying more, or significant loss of Revenue for the State overall. In the light of the information brought forward in the report, the proposal has not been pursued.
The Deputy refers to the concept of incorporating the USC into the wider taxation system. I have already referred to the examination of USC/PRSI above. Another idea might be to incorporate the USC into the personal income tax system and, on the face it, a single unified income tax system may appear to offer advantages as compared with current arrangements. However, many of the significant challenges outlined in “The Report of the Working Group on the Amalgamation of USC and PRSI”, published in September 2018, remain valid in the context of an amalgamation of USC and Income Tax.
There are no plans at present to carry out any further analysis on the proposal suggested by the Deputy.
Ireland has one of the most progressive personal income tax systems in the world, which plays a crucial role in the process of income redistribution. Our redistributive tax system has been acknowledged by the IMF, the OECD and the ESRI. In my view, a broad-based, progressive income tax system, where the majority of income earners make some contribution but according to their means, is the most fair and sustainable income tax system in the long term.
246. Deputy Carol Nolan asked the Minister for Finance the most up-to-date estimated cost of Covid-19-related support schemes introduced by Government from March 2019 to date; and if he will make a statement on the matter. [9271/22]
View answerIn relation to Covid-19 support schemes under the aegis of my Department, I am advised by Revenue that the total cost of the Covid Restrictions Support Scheme (CRSS) as of 17 February is €727m which has been paid in respect of 25,600 premises.
In terms of the Employment Wage Subsidy Scheme (EWSS), currently 24,900 employers are registered with Revenue for EWSS. €6.454 billion in subsidies has been paid to 51,900 employers in respect of 715,300 Employees under the Scheme. An additional €1.009 billion in employer PRSI has been forgone due to the reduced rate of PRSI on wages paid which are eligible for EWSS.
The Temporary Wage Subsidy Scheme (TWSS) was in place from 26 March to 31 August 2020. The cost to the Exchequer of the Scheme over that period is just under €2.9 billion.
At end January 2022, there were 105,000 individual businesses availing of the Tax Debt Warehousing scheme, including 3,200 Large Cases and Medium Enterprises Divisions taxpayers. Warehoused liabilities stood at €3.2bn, this figure includes VAT (€1,496m), Employers’ PAYE (€1,592m), Income Tax (€59m) and TWSS / EWSS (€57m).
The Business Resumption Support Scheme (BRSS) was in place from 6 September 2021 to 30 November 2021. 2,150 businesses with 2,300 trades have availed of BRSS and €6.8 million has been paid under the Scheme.
The Deputy may wish to note that Revenue publishes detailed statistics on its website each week on the operation of COVID-19 support schemes including totals claimed to date.
247. Deputy Catherine Connolly asked the Minister for Finance further to Parliamentary Question No. 145 of 16 December 2021, his plans for the phasing out of the special assignee relief programme, which has a sunset date of 31 December 2022; the total cost to the Exchequer of the programme in 2020 and 2021; and if he will make a statement on the matter. [9725/22]
View answerAs stated in my reply to the Deputy on 16 December last, as the Special Assignee Relief Programme (SARP) sunsets this year, there will be an opportunity for review. Any decisions on the future of SARP arising from this review will be taken in the context of the Budget 2023 and Finance Bill 2022 processes.
With regard to the total cost to the Exchequer of SARP in 2020 and 2021, I am advised that the latest costs available can be found in the 2019 SARP report which is published on the Revenue website and as part of the Budget 2022 Tax Expenditures Report on the Government's Budget 2022 website.
The cost of SARP for 2018 and 2019 (the latest year for which data are available) is set out below.
|
SARP |
2018 |
2019 |
|
Cost (€m) |
42.4 |
38.2 |
I expect that data in relation to 2020 will become available later this year and that data in relation to 2021 will be available in 2023.
249. Deputy Catherine Connolly asked the Minister for Finance the status of the review of the policy framework for credit unions; the timeline for the publication of the review; and if he will make a statement on the matter. [9728/22]
View answerThe Programme for Government includes a number of commitments in relation to the credit union sector. Work on the Review of the Policy Framework is well advanced. We intend to discuss proposals emanating from the Review with representative bodies in the next few weeks.
As part of the Review of the Policy Framework, Minister of State Fleming has conducted extensive stakeholder engagement, meeting with the representative bodies, collaborative ventures, service providers, the Credit Union Advisory Committee, the Registrar of Credit Unions and individual credit unions. The information gained from these meetings will help inform the next steps taken by Government.
In terms of supporting the sector to provide essential financial services to local communities, the following are some recent developments which highlight the potential of the sector to grow and fulfil a role in relation to community banking.
Lending and Investment
The Central Bank has in recent years reviewed both the lending and investment frameworks. Since 1 January 2020, credit unions now have a combined capacity to provide up to €1.1 billion in additional SME and mortgage loans, with further capacity available to credit unions who can comply with certain conditions or on approval by the Central Bank. As of September 2021, credit unions had a combined mortgage and SME loan book of circa €387 million, an increase of 19% year-on-year.
Credit unions are permitted to place their surplus funds that have not been lent to members in a range of investments including Tier 3 Approved Housing Bodies (AHBs). I am pleased to share with the Deputy that three credit union backed funds have received approval from the Central Bank. Credit unions will be able to invest up to €900 million in these regulated funds, which will subsequently lend to AHBs.
SME Lending
Nineteen credit unions were approved in early 2021 for participation in the Covid-19 Credit Guarantee Scheme. Further, in November five credit unions were announced as participants in the Brexit Impact Loan Scheme (BILS). The BILS provides low-cost loans of €25,000 to €1.5m to eligible Brexit-impacted businesses.
In total, SME lending has grown 6.9% year on year to end September 2021. Further development of SME lending in a controlled manner could also assist credit unions in growing and diversifying their loan book.
Access to Finance for Retrofit
The Government significantly increased the funding available to support retrofit. My officials have been engaging with stakeholders to support increased credit union participation in retrofit loan schemes.
Other Services
Other than member savings and lending, in order to provide “additional services”, a credit union must receive approval from the Central Bank.
66 credit unions are approved to provide current accounts.
The Central Bank has prescribed a list of exempt services which may be provided without requiring approval. The Central Bank is undertaking a review of the Exempt Services Schedule to ensure that the services listed reflect the current financial services landscape. The Central Bank has commenced a public consultation seeking views from stakeholders on the proposed changes arising from this review.
