Written Answers Nos. 289-309
289. Deputy Verona Murphy asked the Minister for Finance if he will provide an update on the Disabled Drivers Medical Board of Appeal; if he has formally appointed the five new board members; if confirmation has been received from the National Rehabilitation Hospital that it will host the board; when the board will be permitted to resume clinics and hearings; and if he will make a statement on the matter. [47270/23]
View answerProgress has been made on efforts to convene a new Disabled Drivers Medical Board of Appeals (DDMBA), to secure hosting arrangements for the DDMBA and to recommence the appeals process.
I have now formally appointed all five members to the new DDMBA. Funding arrangements between the Department of Finance and the Department of Health have been agreed. On this basis the National Rehabilitation Hospital has confirmed they will again host the DDMBA. Preparatory work is underway, that will include due deliberation on how best to clear the backlog. The appeals process will re-commence upon completion of this work. In parallel, my officials are working with the NRH to conclude other conditions for new hosting arrangements, which may continue after the appeals process is again up and running.
I appreciate that it has taken far longer than anticipated to get to this point. With the Department of Health we have had to run four Expression of Interest campaigns over 18 months to source the legislatively required five members. We have also had to re-negotiate new hosting arrangements with the NRH following their withdrawal of services in February 2023.
Finally you should note that I have no role in relation to the granting or refusal of PMCs and the HSE and the Medical Board of Appeal must be independent in their clinical determinations.
290. Deputy Ivana Bacik asked the Minister for Finance the number of households which have paid the vacant homes tax in 2023. [47277/23]
View answerAs the Deputy is aware, the Vacant Homes Tax is a new measure announced in Budget 2023, which aims to increase the supply of homes for rent or purchase to meet demand. Legislative provision for the tax was made in the Finance Act 2022. The first chargeable period commenced on 1 November 2022. The first self-assessed returns are due on 7 November this year and the tax will be payable on 1 January 2024.
The number of properties in scope and tax payable will depend on the self-assessed returns submitted by property owners, the number of properties declared as liable and the number of property owners entitled to claim exemption from the tax.
Revenue has advised it will require time to allow all returns and payments to be processed once the deadlines have passed and as a result, the information as requested by the Deputy is not yet available.
291. Deputy Michael Healy-Rae asked the Minister for Finance if he will examine the way tax credits are set up for couples who are not married but who are living together and have children (details supplied); and if he will make a statement on the matter. [47287/23]
View answerThe position is that where a couple is cohabiting, rather than married or in a civil partnership, they are treated as separate and unconnected individuals for the purposes of income tax. Each partner is a separate entity for tax purposes, therefore, cohabiting couples cannot file joint assessment tax returns or share their tax credits and tax bands in the same manner as married couples.
The basis for the current tax treatment of couples derives from the Supreme Court decision in Murphy vs. Attorney General (1980). This decision was based on Article 41.3.1 of the Constitution where the State pledges to protect the institution of marriage. The decision held that it was contrary to the Constitution for a married couple, both of whom are working, to pay more tax than two single people living together and having the same income. The Constitutional protection of Article 41.3.1 does not extend to non-married couples.
It is important to point out that if the tax treatment of married couples was to be extended to cohabiting couples, consideration would need to be given to the practicalities that would arise for Revenue if they were to administer such a system.
It would be very difficult for Revenue to administer a regime for cohabitants, similar to that for married couples. Married couples and civil partners have a verifiable official confirmation of their status. It would be difficult, intrusive and time-consuming to confirm declarations by individuals that they were actually cohabiting and to establish when cohabitation started or ceased.
There would also be legal issues with regard to ‘connected persons’. To counter tax avoidance, ‘connected persons’ are frequently defined throughout the various Tax Acts. The definitions extend to relatives and children of spouses and civil partners. This would be very difficult to prove and enforce in respect of persons connected with a cohabiting couple where the couple has no legal recognition.
To the extent that there are differences in the tax treatment of the different categories of couples, such differences arise from the objective of dealing with different types of circumstances while at the same time respecting the constitutional requirements to protect the institution of marriage.
There may be an advantage in tax legislation for a married couple or civil partners as regards the extended rate band, the ability to transfer certain tax credits and entitlement to the home carer tax credit in specific circumstances. However, the legal status for married couples has wider consequences from a tax perspective both for themselves and persons connected with them.
Therefore, any changes in the tax treatment could only be considered in the broader context of the tax system and future social and legal policy development, given that the legal status of married couples has wider consequences than from a tax perspective.
The tax treatment of couples was reviewed and considered as part of the 2020 Tax Strategy Group process. The Income Tax TSG Paper included an overview of the tax treatment of couples and outlined the rationale for the different treatment between married couples/civil partnerships and cohabiting couples. Further details can be located at the following link - www.gov.ie/en/publication/fdd38-budget-2021-tsg-papers/
It should be noted that the recent report of the Commission on Taxation and Welfare put forward no recommendation regarding the tax treatment of cohabiting couples. However, it did recommend a phased move towards individualisation of the Standard Rate Cut Off Point as a step towards addressing disparities in the income tax system, facilitating increased employment, and decreasing the gap in the employment rate between men and women.
Should this occur, couples that are married or in a civil partnership would no longer be treated differently to cohabitants as each person would be treated as a single taxpayer without the option of being jointly assessed.
It should be noted that both the PRSI and USC are already applied on an individualised basis.
Finally, I have no immediate plans to amend the tax treatment of cohabitating couples.
292. Deputy Alan Dillon asked the Minister for Finance how much projected tax liability the State will generate on the back of a proposal to prohibit income being mandated to GP partnerships or employers, meaning that any GMS income will need to be declared as income by the individual GMS list holder in their tax return from January 2024; and if he will make a statement on the matter. [47315/23]
View answer301. Deputy Éamon Ó Cuív asked the Minister for Finance whether there are new proposals for treating the income of doctors who are in partnerships together; the details of these proposals and the reason for them; and if he will make a statement on the matter. [47575/23]
View answerI propose to take Questions Nos. 292 and 301 together.
My Department and Revenue have, for some time, been aware of issues arising from contractual arrangements within the General Practitioner (GP) community whereby some GPs treat income under their General Medical Services (GMS) contract as income of a GP practice in which they are a partner or an employee, rather than income of that individual GP.
Revenue issued a guidance note to tax practitioners through the Tax Administration Liaison Committee in July of this year clarifying the correct tax treatment of GMS income under tax legislation. That guidance confirmed there would be a transitional period for compliance with existing tax law, until 1 January 2024. Revenue will soon publish supplementary guidance on this matter. Although the guidance is being widely reported as a proposed tax change, I would note that it does not, in fact, introduce a change to the tax treatment of GPs. Instead, it simply clarifies the existing legal and administrative position.
In accordance with Section 58C of the Health Act, a GMS contract is between the HSE and an individual GP. My Department and Revenue understand that, as such, the HSE does not enter into GMS contracts with a medical practice, whether the practice is structured as a partnership or a company. This means that, as a matter of law, income under a GMS contract belongs to the GP who entered into the contract with the HSE – this legal position was confirmed in a recent Tax Appeals Commission determination issued in January 2022 (01TACD2022). The position does not change because a GP mandates the payment of GMS income to a medical practice.
A GP who holds a GMS contract is, under tax legislation, a chargeable person as regards income arising under the GMS contract and should report that income under the self-assessment system. The GP is entitled to claim a credit for Professional Services Withholding Tax deducted by the HSE on GMS payments.
There is no legal basis to treat income arising under a GMS contract entered into between a GP and the HSE as if it were income arising under a contract between the HSE and the medical practice in which the GP is a partner or an employee. The approach being taken is intended to ensure that the tax treatment of GMS income reflects the contractual position. In response to Deputy’s Dillon’s query, as there has been no change to existing tax law, the State is not expected to generate additional revenue as a result.
As it currently stands, the relevant tax policy and legislation remain unchanged, however, to assist GPs and medical practices in complying with their obligations under tax law, Revenue is allowing a transitional period to 1 January 2024 and, as I indicated earlier, is preparing further guidance to assist GPs in applying the correct tax treatment in respect of their GMS income.
Revenue has engaged with tax practitioners on the matter through the Tax Administration Liaison Committee. In an effort to find a solution to this issue, discussions have taken place between officials in my Department, Revenue, the HSE and the Department of Health. Although my Department and Revenue are conscious of the difficulties being experienced by GP practices, they must be cognisant of the legislation.
In response to Deputy Ó Cuív’s query, I would note that, given the core issue concerns the contractual arrangements involving GPs, there may be scope for the Department of Health and the HSE to examine the issue from a contractual viewpoint. Meanwhile, officials in my Department, Revenue, the HSE and the Department of Health continue their consideration of the issue. I will provide a further update on the matter soon.
293. Deputy Holly Cairns asked the Minister for Finance to detail any ongoing or previous use of artificial intelligence within his Department; and if he will make a statement on the matter. [47335/23]
View answerI can confirm to the Deputy that Cybersecurity Guidance from the National Cyber Security Centre (NCSC) in relation to Generative AI issued to Government departments, including my department, during the year. A National AI Strategy, “AI – Here for Good”, prepared by the Department of Enterprise, Trade and Employment was also published in 2021. The NCSC guidance referred to recommends that new technology should only be adopted based on a clearly defined business need following an appropriate risk assessment.
I understand that the Department of Public Expenditure, NDP Delivery and Reform and the Department of Enterprise Trade and Employment have established a working group on AI in Public Services. This group are currently drafting principles concerning the use of AI in public services, which the two Departments expect to publish shortly. Guidelines on the use of generative AI will also be produced in the near future.
For operational and security reasons, my Department has previously been advised by the NCSC not to disclose details of systems and processes which could in any way compromise departmental security. In particular, it is not considered appropriate to disclose information which might assist criminals to identify potential vulnerabilities in departmental cybersecurity arrangements, this includes any particular arrangements in place in relation to total spend on cybersecurity measures, cyber security tools and services.
My Department does not comment on operational security matters.
294. Deputy Cian O'Callaghan asked the Minister for Finance if he is planning to review the chargeable excess tax and standard fund threshold regime; and if he will make a statement on the matter. [47418/23]
View answerI am advised by Revenue that the SFT was introduced in Finance Act 2005, with the purpose of addressing excessive pension accrual, and it applies to all private and public sector pension arrangements. It is provided for in Chapter 2C of Part 30 of the Taxes Consolidation Act 1997 (TCA) which sets out the maximum tax-relieved pension fund at retirement. If the relevant threshold is exceeded, the excess over the threshold (the “chargeable excess”) is subject to an upfront, ring-fenced income tax charge (known as “chargeable excess tax”) at 40%.
The SFT was initially set at €5m. The legislation allowed the Minister for Finance to amend the SFT in line with an “earnings adjustment factor”, which happened on two occasions. The SFT was reduced to €2.3m in December 2010 as part of a package of measures to deliver significant savings in the broad pension area following agreement reached with the EU/IMF. The SFT was further reduced in Finance Act 2013 to €2m, with effect from 1 January 2014, as part of reforms introduced to make supplementary pension provision more sustainable and equitable over the long term. The primary purpose of these changes was to further restrict the capacity of higher earners to fund or accrue large pensions through tax-subsidised sources.
Given that the SFT was last adjusted in 2014 I believe it is now timely to carry out a focused and targeted exercise to review of the current calibration of the SFT.
My Department had already begun the examination which will consider any available evidence regarding the current calibration of the SFT and the potential impacts it is having on public and private sector recruitment. It will also consider issues of tax equity and assess if the current SFT threshold is continuing to fulfil its original policy intent given changes in the CPI and wage inflation since the last such exercise in 2014.
The targeted examination will require input from a range of stakeholders, including the Department of Public Expenditure and Reform and other Departments and agencies. A public consultation is planned which will allow for engagement from all interested parties.
This process is expected to conclude by summer 2024 and following this I will consider the outcomes of the examination.
295. Deputy Bríd Smith asked the Minister for Finance if he will consider establishing a national insurance company to cover the costs of flooding damage and other associated costs, especially when so many are currently unable to obtain insurance to protect against flooding damage; and if he will make a statement on the matter. [47431/23]
View answerAs Minister for Finance, I have policy responsibility for the development of the legal framework governing financial services regulation, including for the insurance sector. Within this context, it should be noted that the provision of insurance cover and the price at which it is offered is a commercial matter for insurance companies providing the service and is based on an assessment of the risks that such companies are willing to accept.
Neither the Minister for Finance, nor the Central Bank of Ireland, can interfere in the provision or pricing of insurance products, nor do they have the power to direct insurance companies to provide cover to specific businesses or individuals. This position is reinforced by the EU Solvency II Directive insurance framework. As such, the Government faces constraints in seeking to address this matter.
While Ireland has one of the highest rates of flood cover across the EU, the provision of insurance by the State has been previously considered and there are a number of reasons that need to be taken account of:
• Any State insurance scheme would be required to comply with the same prudential rules as private companies, as set out in the Solvency II Directive, which means that the cost would need to reflect the risk involved.
• Such an approach could, as an unintended consequence, actually decrease competition, with insurers potentially discontinuing certain other lines if there is a view the State will insure these risks instead, particularly for market segments considered as of greater risk or unprofitable. This would in turn reduce competition, potentially increasing the cost of premiums elsewhere in the economy.
• There is no reason to believe that the State would be any better at managing risks than private insurance companies, and as a result, there potentially would be a large financial exposure to the State if significant losses were incurred.
Nevertheless, Government policy in relation to flooding is focused on the development of a sustainable, planned and risk-based approach to dealing with this issue. The cornerstone of this approach is the €1.3 billion committed to the delivery of flood relief schemes over the lifetime of the National Development Plan (NDP) 2021-2030. Where defences have been built, there is the reasonable expectation that insurers will provide cover.
Accordingly, work on flood cover with the insurance industry continue to take place as part of an OPW-Insurance Ireland Memorandum of Understanding Working Group that meets on a regular basis. This focuses upon how the levels of insurance cover might be improved in areas where flood defence works have been completed. The Department also participates in the OPW-chaired Interdepartmental Flood Policy Coordination Group along with the Department of Housing and Local Government and other stakeholders.
Arising from this, separate industry and Central Bank of Ireland surveys indicate the majority of policies in areas with fixed defences have flood cover. However, it is acknowledged that some households are still experiencing difficulties, particularly in areas with demountable flood defences - these are systems that require a degree of human intervention in their mobilisation.
Separately, the Department has regular meetings with Insurance Ireland on a range of insurance-related issues including flood cover. The Department of Finance will continue to monitor and assess the provision of flood cover, including the impact of climate change on insurance over the long term.
Of note also is that Insurance Ireland operates an Insurance Information Service for those who have queries, complaints or difficulties in relation to obtaining insurance, which can be accessed at feedback@insuranceireland.eu. Likewise, Brokers Ireland, the representative body for insurance brokers in Ireland, can be contacted. They have access to a wide range of providers and products, and can offer advice for customers in sourcing cover. They can be reached at 01 6613067.
As has been the case, my Department will continue to monitor and assess any flood insurance matters, including through: its participation in the OPW and Insurance Ireland Working Group; actively encourage industry to have a more responsive approach to the matter; engage with the Central Bank of Ireland; and consider domestic and international policy developments, including at the EU and OECD level to these issues as they arise.
Furthermore, it should be noted that Government has made available humanitarian assistance supports to households, businesses and community groups affected by recent flooding events. These targeted funds aim to assist those severely impacted to repair their homes or premises.
Finally, the Deputy should be assured that both I and Minister of State Carroll MacNeill will continue to engage on all aspects of insurance reform, including flood cover issues, and that every effort is being made to encourage a responsive approach from the insurance industry. In upcoming meetings with industry later this month this position will continue to be advanced.
297. Deputy Jim O'Callaghan asked the Minister for Finance the tax yield from the gambling levy for the years 2019, 2020, 2021, 2022 and 2023 to date, in tabular form; and if he will make a statement on the matter. [47480/23]
View answer298. Deputy Jim O'Callaghan asked the Minister for Finance the total tax yield from the gambling sector for the years 2019, 2020, 2021, 2022 and 2023 to date, in tabular form; and if he will make a statement on the matter. [47481/23]
View answerI propose to take Questions Nos. 297 and 298 together.
I am advised by Revenue that the receipts from Betting Duty in each of the years 2019 to 2022 are available on the Revenue website at:www.revenue.ie/en/corporate/information-about-revenue/statistics/excise/receipts-volume-and-price/betting-duty-receipts.aspx
The provisional Betting Duty receipts for January to October 2023 are €102.7m.
The total tax receipts received across all taxpayers who identify their primary business activity within the Gambling and Betting Activities sector for the years 2019 to 2023 year-to-date, is shown in the table below. Business activity is identified using the Nomenclature of Economic Activities (NACE) statistical classification code. Some taxpayers who self-classify within this NACE sector engage in other, secondary economic activities outside of gambling and as such, it is not possible to separately identify tax receipts relating solely to gambling related business activity. It should also be noted that not all taxpayers who file a betting duty return are classified under this NACE code.
In relation to VAT, a large proportion of business within this sector are VAT-exempt and as such are not required to file a VAT return. Lotteries, on and off course betting, remote-on line gambling and gambling via betting exchanges are all exempt from VAT.
A small number of tax heads are excluded due to the low number of taxpayers filing these returns in accordance with Revenue’s Statistical Disclosure Protocol.
|
Tax Head |
Year (€ millions) |
||||
|
2019 |
2020 |
2021 |
2022 |
2023 |
|
|
Betting Duty |
94.4 |
86.4 |
88.4 |
98.5 |
102.1 |
|
Capital Gains Tax |
1.5 |
1.8 |
4.5 |
0.8 |
- |
|
Corporation Tax |
18.4 |
9.5 |
14.9 |
20.8 |
25.1 |
|
Customs & Excise |
1.5 |
1.4 |
1.0 |
1.0 |
0.4 |
|
Excise Licence |
4.1 |
2.0 |
2.2 |
3.5 |
4.4 |
|
Income Tax (Non-PAYE) |
4.5 |
4.4 |
-0.9 |
2.2 |
0.7 |
|
Income Tax (PAYE) |
43.4 |
43.7 |
50.1 |
59.9 |
50.9 |
|
VAT |
19.5 |
6.4 |
3.5 |
62.7 |
20.8 |
299. Deputy Michael Collins asked the Minister for Finance if, considering that the average cost of a house in Ireland is currently estimated at €305,000, and recognising that prices vary significantly in cities like Cork and Dublin, he will provide a breakdown of the approximate income levels that individuals or families would need to afford a home in these high-cost areas; to provide similar insights for other regions with varying housing costs across the country; and if he will make a statement on the matter. [47485/23]
View answerThe Central Statistics Office (CSO) compiles monthly statistics on the volume of purchases of residential property, together with the monthly Residential Property Price Index (RPPI). The latest RPPI statistics available are for August 2023 and provide statistics on the average prices paid for a residential property in the 12 months to August 2023. In Dublin, the average price of a home in the 12 months to August was €533,717, in the Cork City Council area it was €333,222 and in the Cork County Council area it was €338,331. The average price of a home purchased in the 12 months to August 2023 at market rates by household buyers across different regions is given in Table 1.
Table 1: Average price of residential dwellings purchased at market prices by household buyers in the 12 months to August 2023
|
Region |
Average Price |
|
Border Excluding Louth |
€ 202,674 |
|
Midland |
€ 239,571 |
|
West |
€ 268,057 |
|
Dublin |
€ 533,717 |
|
Mid-East including Louth |
€ 379,307 |
|
Mid-West including South Tipperary |
€ 249,127 |
|
South-East excluding South Tipperary |
€ 275,247 |
|
South-West |
€ 323,867 |
|
National |
€ 367,240 |
In relation of the approximate income needed to afford a home, it depends on a variety of circumstances individual to each buyer. These include, inter alia, their level of savings, whether they are a first-time or second and subsequent buyer, their eligibility for various government schemes and the interest rate on their mortgage. The CSO’s ‘Earnings Analysis using Administrative Data Sources’ show that in 2022, the average salary nationally was €52,053. In Dublin, the average salary was €60,804 and in Cork it was €52,284. Based on these figures, for example, a First Time Buyer couple with each on the average income would be able to borrow just over €416,000. To note, this is an indicative amount based on national average wages and is used as an example. With the inclusion of a 10 per cent deposit, that couple could purchase a home in 7 of the 8 regions above, as well as at the national average price. Encouragingly, this level of affordability (7 out of 8 regions) holds when median as opposed to average income is used.
I would also advise people to check their eligibility for the various government schemes such as Help to Buy, First Home and the Local Authority Home Loan, which all boost affordability and help people buy their own home.
Key to alleviating the cost of housing is to increase the supply of homes and recent indicators on housing supply have been encouraging. In Q3 2023, there were 8,452 new homes completed, 14.4 per cent higher than Q3 2022. In the 12 months to end September 2023, 31,567 new homes were completed. This is the highest number of new homes built in any 12 month period since the CSO series began in 2011. In the 12 months to end September 2023, 29,961 new homes commenced construction, the highest rolling 12 month figure since March 2022.
300. Deputy Cathal Crowe asked the Minister for Finance if he will factor overall household income, including all earners in a family unit, for the purposes of calculating lower and higher rates of taxation; and if he will make a statement on the matter. [47538/23]
View answerBased on further clarification sought from the Deputy, I understand this question relates to the treatment of cohabiting couples for tax and social welfare purposes.
Therefore, on that basis, the position is that where a couple is cohabiting, rather than married or in a civil partnership, they are treated as separate and unconnected individuals for the purposes of income tax. Each partner is a separate entity for tax purposes, therefore, cohabiting couples cannot file joint assessment tax returns or share their tax credits and tax bands in the same manner as married couples.
The basis for the current tax treatment of couples derives from the Supreme Court decision in Murphy vs. Attorney General (1980). This decision was based on Article 41.3.1 of the Constitution where the State pledges to protect the institution of marriage. The decision held that it was contrary to the Constitution for a married couple, both of whom are working, to pay more tax than two single people living together and having the same income. The Constitutional protection of Article 41.3.1 does not extend to non-married couples.
The treatment of cohabiting couples for the purposes of social welfare is primarily a matter for the Minister for Social Protection. However, it is based on the principle that married couples should not be treated less favourably than cohabiting couples. This was given a constitutional underpinning following the Supreme Court decision in Hyland v Minister for Social Welfare (1989) which ruled that it was unconstitutional for the total income a married couple received in social welfare benefits to be less than the couple would have received if they were unmarried and cohabiting.
It is important to point out that if the tax treatment of married couples was to be extended to cohabiting couples, consideration would need to be given to the practicalities that would arise for Revenue if they were to administer such a system.
It would be very difficult for Revenue to administer a regime for cohabitants, similar to that for married couples. Married couples and civil partners have a verifiable official confirmation of their status. It would be difficult, intrusive and time-consuming to confirm declarations by individuals that they were actually cohabiting and to establish when cohabitation started or ceased.
There would also be legal issues with regard to ‘connected persons’. To counter tax avoidance, ‘connected persons’ are frequently defined throughout the various Tax Acts. The definitions extend to relatives and children of spouses and civil partners. This would be very difficult to prove and enforce in respect of persons connected with a cohabiting couple where the couple has no legal recognition.
To the extent that there are differences in the tax treatment of the different categories of couples, such differences arise from the objective of dealing with different types of circumstances while at the same time respecting the constitutional requirements to protect the institution of marriage.
There may be an advantage in tax legislation for a married couple or civil partners as regards the extended rate band, the ability to transfer certain tax credits and entitlement to the home carer tax credit in specific circumstances. However, the legal status for married couples has wider consequences from a tax perspective both for themselves and persons connected with them.
Therefore, any changes in the tax treatment could only be considered in the broader context of the tax system and future social and legal policy development, given that the legal status of married couples has wider consequences than from a tax perspective.
The tax treatment of couples was reviewed and considered as part of the 2020 Tax Strategy Group process. The Income Tax TSG Paper included an overview of the tax treatment of couples and outlined the rationale for the different treatment between married couples/civil partnerships and cohabiting couples. Further details can be located at the following link - www.gov.ie/en/publication/fdd38-budget-2021-tsg-papers/
It should be noted that the recent report of the Commission on Taxation and Welfare put forward no recommendation regarding the tax treatment of cohabiting couples. However, it did recommend a phased move towards individualisation of the Standard Rate Cut Off Point as a step towards addressing disparities in the income tax system, facilitating increased employment, and decreasing the gap in the employment rate between men and women.
Should this occur, couples that are married or in a civil partnership would no longer be treated differently to cohabitants as each person would be treated as a single taxpayer without the option of being jointly assessed.
It should be noted that both the PRSI and USC are already applied on an individualised basis.
Finally, I have no immediate plans to amend the tax treatment of cohabitating couples.
302. Deputy Mairéad Farrell asked the Minister for Finance if parents who are currently renting themselves and also paying the rent for their children in student accommodation will receive the tax credit once for the accommodation in which they are based, or twice to include the student accommodation; and if he will make a statement on the matter. [47594/23]
View answer303. Deputy Mairéad Farrell asked the Minister for Finance if students who are currently paying for student accommodation but are not currently in employment and paying tax through that employment can avail of the renter's tax credit; and if so, how this will function; and if he will make a statement on the matter. [47595/23]
View answer304. Deputy Mairéad Farrell asked the Minister for Finance if the change in the renter's tax credit which allows for students living in digs accommodation to avail of the tax credit requires the landlord to be registered with the RTB; and if he will make a statement on the matter. [47596/23]
View answer307. Deputy Mairéad Farrell asked the Minister for Finance if it is the case that PhD research students are excluded from the new student renters' credit; if so, if he can outline the rationale for this; and if he will make a statement on the matter. [47666/23]
View answer308. Deputy Noel Grealish asked the Minister for Finance if the rent tax credit can be claimed by a single person who is renting a property for themselves and, at the same time, in respect of their child, for whom the parent is paying for rental accommodation while the child is a full-time student; and if he will make a statement on the matter. [47703/23]
View answer317. Deputy Éamon Ó Cuív asked the Minister for Finance whether, in circumstances where a parent is in rented accommodation and has a son/daughter in third level education also renting in a different property, he intends increasing the maximum tax credit for renting to double the proposed limit of €750; and if he will make a statement on the matter. [47842/23]
View answerI propose to take Questions Nos. 302 to 304, inclusive, 307, 308 and 317 together.
Section 473B of the Taxes Consolidation Act 1997 provides for the rent tax credit. This credit is available for the years of assessment 2022 to 2025.
Subject to a number of conditions, the rent tax credit is broadly available in the following three circumstances:
1. where the claimant makes a qualifying payment in respect of a residential property which he or she uses as his or her principal private residence,
2. where the claimant makes a qualifying payment in respect of a residential property which he or she uses to facilitate his or her attendance at or participation in his or her employment, office holding, trade, profession or an approved course, and
3. where the claimant makes a qualifying payment in respect of a residential property which his or her child uses to facilitate his or her child’s attendance at or participation in an approved course.
This credit is currently subject to an overall cap of €1,000 for a jointly assessed couple and €500 in all other cases. I have brought forward a measure in this year’s Finance Bill that will further increase the value of this credit. Thus, following enactment of the Bill, the value of the credit for the 2024 and 2025 tax years will increase to a maximum of €1,500 for a jointly assessed couple and €750 in all other cases.
If a claimant is paying rent in respect of their own principal private residence and also rent in respect of a property used by a child to attend third level education, the claimant is entitled to claim in respect of both properties. However, in such circumstances the maximum tax credit available will be limited to the value of one full tax credit for that year. This means that for the tax years 2022 and 2023, the maximum tax credit per year is €1,000 for a jointly assessed couple and €500 in all other cases. For the tax years 2024 and 2025, the maximum tax credit per year is €1,500 for a jointly assessed couple and €750 in all other cases.
In order to obtain benefit from the tax credit the claimant must have an income tax liability and thus the capacity to utilise the tax credit. Therefore, if an individual is paying rent but is not subject to income tax, the tax credit will not be of benefit to that individual.
I am making a further change in this year’s Finance Bill which will broaden the scope of the credit regarding payments made by parents in respect of “digs” or rent-a-room arrangements for their children to attend an approved course, which will now qualify for the rent tax credit. This is provided the claimant and their child are not related to the landlord and the other conditions of the section are met. This amendment will apply to the tax years 2022 to 2025 (inclusive). Furthermore, this change does not impose any additional Residential Tenancies Board (RTB) registration requirements, if a tenancy is not required to be registered with the RTB this will amendment not change the position.
In order for rent paid by a parent for a child’s use of a residential property to facilitate their attendance at or participation in a course to qualify for the rent tax credit it must be an approved course. An approved course for the rent tax credit has the same meaning for the purpose of this measure as is set out in section 473A of the Taxes Consolidation Act 1997, which provides for tax relief on third level tuition fees.
Broadly, an approved course means any of the following:
• a full-time or part-time undergraduate course of at least 2 years’ duration, or
• a postgraduate course of between 1 and 4 years’ duration which results in a degree or equivalent qualification being conferred on the participant based on a thesis, examination result, or a combination of both.
Revenue advise me that PhD courses do not, generally, fall within the definition of an approved course. However, a PhD student (or any other person) may still claim the credit in their own right if the claim meets the other requirements of the credit.
Further details in relation to the rent tax credit can be found on Revenue’s website at www.revenue.ie/en/tax-professionals/tdm/income-tax-capital-gains-tax-corporation-tax/part-15/15-01-11A.pdf.
305. Deputy Michael Creed asked the Minister for Finance if he will clarify the situation regarding the income tax free allowance for retired pensioners; if this has increased in recent years; and if he will make a statement on the matter. [47601/23]
View answerThe position is that the age exemption applies for any year of assessment where an individual is aged 65 years or over and his or her total income does not exceed €18,000 per annum. Where an individual is a married person or civil partner and is jointly assessed to tax, the age exemption will apply where either individual is aged 65 or over and where the couple’s total income does not exceed €36,000 per annum. The relevant income thresholds may be increased further if the individual has a qualifying child. The thresholds are increased by €575 in respect of both the first and second child, and €830 in respect of each subsequent child.
It is important to note that marginal relief may be available where the individual’s or couple’s income exceeds the relevant exemption limit but is less than twice that amount. Where marginal relief applies the individual or couple is taxed at 40 per cent on all income above the exemption limit to a ceiling of twice the exemption limit. The system of marginal relief ensures that in cases where an individual's or couple’s income rises above the exemption threshold that their net income will not decline, as the 40 per cent income tax rate only applies to the proportion of income above the threshold. Once the income exceeds twice the exemption limit marginal relief is no longer available and the individual pays tax under the normal tax system.
It should be noted, however, that where the individual’s income is greater than the exemption limit but below twice that limit, the taxpayer is entitled to the benefit of the more favourable treatment as between the use of marginal relief or the normal tax system of credits and bands.
The age exemption thresholds have not been increased in recent years, having last been adjusted in Budget 2011. However, in circumstances where the individual or couple no longer benefits from the age exemption or marginal relief, they will benefit from the increases to the main personal tax credits in recent Budgets.
For example, the increases to the main personal tax credits in Budget 2024 (€100 increase to the single, employee and earned income credits and a €200 increase to the credit for married couples / civil partnerships) means that the effective entry point to income tax has increased for all taxpayers, including those of aged over 65. From 2024, the effective entry point to income tax for an individual in receipt of the single person credit, employee / earned income credit and the age credit will be €19,975 per annum.
In addition, it is important to take into account that the current tax arrangements for persons aged 65 or older compare favourably with the tax treatment of the generality of taxpayers. For example, persons aged 65 or over may also avail of the age tax credit, which currently amounts to €245 per year for single persons or €490 per year for married couples or civil partners. Reduced rates of USC also apply for persons aged 70 or older where their total income is €60,000 or less. Furthermore, the State Contributory Pension and the State Non-Contributory Pension are not chargeable to USC or Pay Related Social Insurance.
Finally, it should be noted that the Commission on Taxation and Welfare recommended that age should be removed as a factor for determining the charge to income tax and USC. The report stated that the determination of an individual’s tax treatment based on age narrows the base and breaches the concept of horizontal equity, whereby those with similar income should pay the same proportion of that income in taxes. It also breaches the concept of intergenerational equity. Further details are set out in the Report of the Commission, located at the following link - www.gov.ie/en/publication/7fbeb-report-of-the-commission/
As part of the Personal Tax Review published on Budget Day, my Department set out further analysis of the recommendations of the Commission on Taxation and Welfare, including in respect of the age exemption limits. The Report is available at the following link - www.gov.ie/pdf/?file=https://assets.gov.ie/273335/96f70eb1-64e1-4f02-9096-e36f306a048b.pdf#page=null
306. Deputy Catherine Murphy asked the Minister for Finance the number of statements of interests for the purposes of section 19 filed by his special advisers in 2020, 2021, 2022 and to date in 2023; and if he will provide a schedule of same. [47646/23]
View answerSince taking up my role as Minister for Finance on 17 December 2022 I have received two Statements of Interests for the purposes of Section 19 from my special advisers.
309. Deputy Robert Troy asked the Minister for Finance to provide a breakdown of the advertising spend of his Department and agencies under the remit of his Department, by national media outlet and local newspaper outlet, for each of the years 2020 to 2022, in tabular form. [47731/23]
View answerThe amount of advertising spend by my Department in the timeline specified is in the table below.
|
Year |
Media Outlet/Local Publication |
Advertising Spend |
|
2020 |
Seachtain |
€815.07 |
|
2021 |
Irish Times |
€6352.50 |
|
Irish Independent |
€2,127 |
|
|
Daily Star |
€2,281 |
|
|
2022 |
Irish Examiner |
€2,444 |
|
Irish Sun |
€1,086 |
|
|
Irish Times |
€3,049.54 |
Those bodies under the aegis of my Department that incurred advertising spend in the timeline specified have provided the information in the table at the link.
