Thursday, 23 Nov 2023

Ireland Strategic Investment Fund

Questions (101)

Matt Carthy

Question:

101. Deputy Matt Carthy asked the Minister for Finance the guidance provided to the Ireland Strategic Investment Fund regarding industries, sectors or otherwise, which it is prohibited from investing in. [51425/23]

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Written answers

Minister for Finance

The NTMA has advised me that the Ireland Strategic Investment Fund (ISIF) constructs its portfolio within the legislative framework set for it by the Oireachtas and aligns it with any changes it makes.

ISIF has, to date, completed several divestment programmes and excluded investments from the Fund, consistent with legislative changes enacted by the Oireachtas which have had a consequential impact on ISIF’s investment strategy. In this context ISIF operates an exclusion policy which is consistent with its statutory mandate, as amended from time to time.

Exclusion is used on a limited basis, reflecting exclusions mandated by legislation (such as the Fossil Fuel Divestment Act 2018 or the Cluster Munitions and Anti-Personnel Mines Act 2008). As of October 2023, in accordance with its obligations under the Fossil Fuel Divestment Act 2018, ISIF had developed a list of 243 fossil fuel companies in which it will not invest.

In addition, ISIF also maintains an exclusionary strategy around cluster munitions and antipersonnel mines (which are prohibited investments under the Cluster Munitions and Anti-Personnel Mines Act 2008), tobacco manufacturing and direct investment in companies involved in the manufacture and testing of nuclear weapons or their critical component parts.

I would also like to note the proposed Private Members Illegal Israeli Settlements Divestment (Private Members Bill), 2023, which seeks to amend the National Treasury Management Agency (Amendment) Act 2014. The amendment would require ISIF divest from companies named in a UN Human Rights Council Database published by the UN Human Rights Council on 12 February 2020, (A/HRC/43/71).

As the Deputy is aware to allow appropriate time to consider implications of the Private Members Bill and explore possible ways to proceed the Government proposed a timed amendment to the Bill of nine months on Tuesday, 16 May and this was subsequently approved by Dáil Éireann.

The timed amendment approach allows time to consider the intent of the Bill further including consideration of other alternative non-legislative based approaches or a combination of legislative and non-legislative based approaches which could achieve a similar outcome.

As a result, my officials are engaging the relevant stakeholders on this Bill, including the relevant Oireachtas Committee on this Bill.

This work will help the Government determine its final approach to the proposed Private Members Bill and the issues it raises in advance of the mid-February timeline.

Tax Data

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Written answers

Minister for Finance

I propose to take Questions Nos. 102, 105, 133, 134, 137, 139 and 147 together.

The Rent Tax Credit, as provided for in section 473B of the Taxes Consolidation Act 1997, was introduced by Finance Act 2022 and may be claimed in respect of qualifying rent paid in 2022 and subsequent years to end-2025.

For the tax years 2022 and 2023, the maximum value of the credit is €1,000 per year in the case of 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.

I am advised by Revenue that the Rent Tax Credit statistics currently available refer only to claims by PAYE taxpayers. Data on claims by self-assessed taxpayers is not yet available. Statistics covering all taxpayers will be available in Q2 2024.

Claims in respect of the 2022 year of assessment can be made by PAYE taxpayers by submitting an Income Tax return for that year. For claims relating to 2023, PAYE taxpayers have the option of claiming the rent tax credit due to them either as rent is incurred or at the end of the year through their Income Tax return.

Rent Tax Credit claims are made are on a ‘taxpayer unit’ basis. A taxpayer unit is either an individual with any personal status who is singly assessed or a couple in a marriage or civil partnership who have elected for joint assessment.

I am further advised that as of 15 November 2023, over 311,910 Rent Tax Credit claims have been made by 268,306 taxpayer units consisting of:

203,405 taxpayer units that made claims for 2022 only,

43,604 taxpayer units that made claims for both 2022 and 2023,

21,297 taxpayer units that made claims for 2023 only.

As of the 15th of November 2023, data by county on the number of taxpayer units that made Rent Tax Credit claims for the years 2022 and 2023 are as follows.

Carlow, 2,228 taxpayer units made claims for 2022 and 588 taxpayer units made claims for 2023.

Cavan, 2,027 and 560.

Clare, 3,076 and 904.

Cork, 28,054 and 7,137.

Donegal, 3,105 and 947.

Dublin, 116,687 and 29,146.

Galway, 17,727 and 4,625.

Kerry, 3,714 and 1,015.

Kildare, 8,729 and 2,443.

Kilkenny, 2,593 and 760.

Laois, 1,904 and 580.

Leitrim, 807 and 222.

Limerick, 12,131 and 2,972.

Longford, 1,433 and 362.

Louth, 3,304 and 994.

Mayo, 3,537 and 1,041.

Meath, 4,544 and 1,386.

Monaghan, 1,681 and 469.

Offaly, 2,008 and 556.

Roscommon, 1,583 and 462.

Sligo, 2,900 and 784.

Tipperary, 4,241 and 1,165.

Waterford, 4,730 and 1,355.

Westmeath, 3,595 and 1,084.

Wexford, 3,846 and 1,065.

Wicklow, 2,973 and 900.Information is not yet available in relation to 3,852 taxpayer units that made claims for 2022 and 1,379 taxpayer units that made claims for 2023.

Insurance Coverage

Questions (103)

Pádraig O'Sullivan

Question:

103. Deputy Pádraig O'Sullivan asked the Minister for Finance if he will consider establishing a national flood insurance company to cover flood damage costs especially when so many homes and businesses are unable to obtain flood insurance; and if he will make a statement on the matter. [51209/23]

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Written answers

Minister for Finance

The current Government policy in relation to flood insurance coverage is focused on the development of a sustainable, planned and risk-based approach to managing flooding. Preventing flooding is the best approach to reducing flood risk and maximising flood insurance capacity.

Accordingly, €1.3 billion has been committed to the delivery of flood relief schemes over the lifetime of the National Development Plan to 2030. This will protect approximately 23,000 properties across various communities from river and coastal flood risk.

This investment is complemented by a Memorandum of Understanding (MoU) between the Office of Public Works (OPW) and industry representatives, Insurance Ireland. This engagement provides for the exchange of data in relation to completed flood defence schemes which should, in turn, provide a basis for the increased provision of flood insurance in these areas.

Arising from this approach, data indicates that average flood insurance coverage levels here are higher than across the EU, and has indeed increased since 2015. However, it is acknowledged that some households are still experiencing difficulties, particularly in areas with demountable flood defences. These are systems which require human intervention in terms of their deployment.

In terms of reforming the provision of flood insurance, it is important to acknowledge that the provision and pricing of insurance is a commercial matter for insurers, based on an assessment of the risks that such companies are willing to accept. Under the EU Solvency II Directive, neither the Minister for Finance, nor the Central Bank of Ireland can compel insurers to provide such cover.

Legislating for compulsory cover was an option considered by the Department of Finance in its review of policy in relation to flood insurance in 2016, and the ‘Public Consultation on Climate Change and Insurance’ in 2019. It was then found that such an approach would have limited impact on the availability of flood cover, as it would result amongst other things in: insurers pricing prohibitively for high-risk properties; an increase in the pricing of low-to-medium risk properties; and the risk that insurers decide to withdraw from the market.

This is a complex area involving different stakeholders, often with competing objectives. It is likely that the OPW will continue to utilise demountable defences in certain circumstances while insurers will continue to maintain their reservations. However, it needs to be acknowledged that a trade-off can exist between the installation of demountable defences on the one hand and the provision of flood cover on the other.

I acknowledge the important role that the insurance market can play in managing society’s risks. Surveys from the Central Bank of Ireland and industry indicate that the majority of property policies here included flood cover. These policies have ensured that a significant amount of people have been adequately compensated after a flood event. Industry data for the period 2000-2018 indicates that insurers paid out in the region of €1.6 billion for flood, storm and freeze weather events, compensating insurers for associated property damage in Ireland.

Finally, please be assured that Government 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, particularly in light of recent events. Minister of State Carroll MacNeill T.D. will be meeting with the CEOs of the major insurers later this month and will be pressing them to deal with their affected policy holders, fairly and efficiently and in-line with the Central Banks consumer protection code.

Tax Code

Questions (104, 177, 181, 183)

Bernard Durkan

Question:

104. Deputy Bernard J. Durkan asked the Minister for Finance the implications, if any, for Ireland’s taxation policy in the wake of recent European Court judgement in respect of competition laws; whether Ireland retains absolute authority in respect of taxation; and if he will make a statement on the matter. [51467/23]

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Bernard Durkan

Question:

177. Deputy Bernard J. Durkan asked the Minister for Finance the extent to which he remains satisfied that competency in respect of taxation resides within the Members States throughout the European Union, notwithstanding recent decisions/deliberations. [49984/23]

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Bernard Durkan

Question:

181. Deputy Bernard J. Durkan asked the Minister for Finance if he is satisfied that recent binding /non-binding discussion/decision at European level by the ECJ’s advocate general in respect of a judgement (details supplied) is fully in accord with the fact that the competency for taxation resides with the Members States throughout the European Union, and not with the European Institutions; and if he will make a statement on the matter. [51755/23]

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Bernard Durkan

Question:

183. Deputy Bernard J. Durkan asked the Minister for Finance the extent to which he remains satisfied that Ireland remains rightly in control of its taxation policy, notwithstanding developments at EU level; and if he will make a statement on the matter. [51757/23]

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Written answers

Minister for Finance

I propose to take Questions Nos. 104, 177, 181 and 183 together.

I understand that the Deputy is referring to the recent Opinion of the Advocate General in the Apple Case.

In 2016, the European Commission issued a Decision finding that Ireland had provided State aid to Apple. Ireland challenged this decision before the General Court of the European Union (GCEU) and in2020, the GCEU issued its judgment which annulled the Commission’s State aid decision of 2016. The Commission appealed the GCEU judgment to the Court of Justice of the European Union (CJEU) and, on 23 May 2023, the CJEU heard the appeal.

The Advocate General’s Opinion on the Apple case was published on 9 November 2023. The Advocate General analyses the legal aspects of the case in detail and, separately from the deliberations of the Court, provides an Opinion regarding the issue being heard. It is however important to bear in mind that this Opinion does not form part of the Court of Justice of the European Union judgment but is considered by the Court when arriving at its final ruling. The timing of the judgment is at the discretion of the Court.

As this matter is still the subject of legal proceedings, it is not possible to comment on any of the elements of the legal case.

Ireland has always been, and continues to be, a strong proponent of unanimity in tax matters at EU level. Tax Sovereignty is an area close to the heart of Irish citizens and was one of the reasons the Irish people initially rejected the Lisbon Treaty. A subsequent Protocol to the Treaty provided guarantees in relation to tax sovereignty, which paved the way for the Treaty's approval in Ireland.

Ireland has shown that we are willing to engage with and agree EU tax directives that seek to implement agreed international best practices in a consistent manner across the EU. Through negotiations, Ireland always maintain the principle that matters of direct taxation remain a Member State competence under the treaties, and tax harmonization is contrary to that principle.

Taxation remains one of the most effective policy levers available to any Government, and each Member State has developed a tax mix appropriate to their particular economy. We fundamentally believe that tax competition is an important policy tool, particularly for smaller Member States, provided that competition is fair and based on substance. The recently published Advocate General’s Opinion on the Apple case does not have any bearing on that position.

Ireland’s participation in global and European tax reform does not indicate that we are conceding any sovereignty in tax matters. Ireland is a proponent of multilateralism being the best solution to global tax problems and this is what underpins our position on EU tax matters and our decisions to join international consensus on the Two Pillared Agreement at the OECD.

On this basis I am satisfied that taxation is, and will continue to remain, a national competence for EU Member States.

Question No. 105 answered with Question No. 102.

Question No. 106 answered with Question No. 88.

Tax Reliefs

Questions (107, 108)

Richard Boyd Barrett

Question:

107. Deputy Richard Boyd Barrett asked the Minister for Finance if he has reviewed the report on Section 481 tax relief from the Budget Scrutiny Committee; what actions he is planning in relation to the recommendations from that report, in particular those with regard to quality employment and training; and if he will make a statement on the matter. [51574/23]

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Richard Boyd Barrett

Question:

108. Deputy Richard Boyd Barrett asked the Minister for Finance if he is planning to implement the recommendations of the report on Section 481 tax relief from the Budget Scrutiny Committee; and if he will make a statement on the matter. [51573/23]

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Written answers

Minister for Finance

I propose to take Questions Nos. 107 and 108 together.

I am aware of the contents of the Committee on Budgetary Oversight’s Report on Section 481 Film Tax Credit. I am also aware that the recommendations contained within the report cover a number of themes and policy areas for which responsibility lies across a number of Departments, and indeed, recommendations for action by the Committee itself.

With regard to the recommendations wholly or partially directed to my Department, Recommendation 13 suggests increasing the cap on eligible expenditure under Section 481, which is happening this year as the cap is increasing from €70m to €125m in Budget 2024.

I understand that work is being undertaken a number of Departments and Agencies, in particular Screen Ireland, the Department of Tourism, Culture, Arts, Gaeltacht, Sport and Media (DTCAGSM) and the Department of Enterprise, Trade and Employment (DETE), on a range of issues relating to quality employment and training in the context of the audiovisual industry.

With regard to skills and training, in 2019 Ireland was one of the first countries in Europe to link its film tax credit to skills development, ensuring that sustainable growth across the screen industry provided structure and stability to Irish crew through these opportunities. Since then, Screen Ireland has evaluated skills development plans from over 220 productions, and 2022 saw a total of more than 3,500 skills development placements across Section 481 training, courses and other skills development initiatives, including mentorships and shadow directing.

With regard to Recommendation 14 for the establishment of a stakeholder forum, officials in the DTCAGSM are actively progressing options in this regard. I am fully supportive of this and my officials will engage with the forum when established.

In relation to Recommendation 7 regarding intellectual property rights and Recommendation 8 regarding compliance with relevant copyright legislation, I would note that copyright law falls within the remit of DETE. Copyright is relevant for many workers in the film sector, including authors, producers and broadcasters in addition to performers and there are complex legal issues involved. I understand that an independent facilitator has been retained by Screen Ireland to meet with key stakeholders to understand and discuss issues raised through the implementation of the Digital Single Market Directive (Copyright Directive), and that all stakeholders are engaging with this process. I look forward to the outputs from this process. It is worth noting that copyright legislation applies regardless of whether it is referenced as part of the application process for section 481 or not.

Finally, I would also note that my officials have directly engaged with all relevant representative bodies in the sector, including those representing crew, cast and producers, with a view to understanding the issues affecting the audio-visual sector.

Question No. 108 answered with Question No. 107.

Tax Data

Questions (109, 117, 132)

Ged Nash

Question:

109. Deputy Ged Nash asked the Minister for Finance the up-to-date figure in respect of corporation tax revenue recorded to November 2023; if he has reassessed the level of likely 'windfall' corporation tax surpluses out to 2026; if he will publish the revised figures as compared to the corporation tax estimates out to 2026 which were published in this year's summer economic statement; and if he will make a statement on the matter. [51428/23]

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Ged Nash

Question:

117. Deputy Ged Nash asked the Minister for Finance his plans to broaden the tax base in the context of the State's reliance on a small number of tax heads including corporation tax and VAT; and if he will make a statement on the matter. [51429/23]

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Cormac Devlin

Question:

132. Deputy Cormac Devlin asked the Minister for Finance how overall tax revenues to end-October this year compares to the same period in 2022; and if he will make a statement on the matter. [51397/23]

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Written answers

Minister for Finance

I propose to take Questions Nos. 109, 117 and 132 together.

Tax revenues to end-October stood at €66.5 billion, €2.5 billion or 4 per cent ahead of the same period last year driven primarily by income tax and VAT. Income tax receipts to end-October of €25.7 billion were up by €1.8 billion on the same period last year, while VAT receipts of €17.0 billion were €1.6 billion higher than in the same period last year.

Corporation tax receipts recorded to end-October stood at €15.7 billion. This was down by €0.4 billion, or 2.7 per cent, on the same period last year. October has been the third consecutive month in which corporation tax has declined year-on-year, reflecting the weakness of exports this year, particularly in the pharmaceutical sector.

The next set of Exchequer figures will be published in the November Fiscal Monitor on Tuesday, 5th December.

The recent decline in corporate tax receipts underscores the volatility in this tax head: as Deputies will be aware, I have frequently warned that these receipts should not be relied upon to fund permanent expenditure measures.

As part of Budget 2024, my Department updated its estimates for ‘windfall’ corporation tax, in other words receipts that are not linked to the domestic economy. For this year, windfall receipts were estimated at €10.8 billion, rising to €11.1 billion next year. For 2025 and 2026 windfall corporation tax was estimated at €11.7 billion and €10.8 billion respectively, with the 2026 figure net of an assumed loss to revenues from the OECD BEPS reforms.

My Department will update its estimate for ‘windfall’ corporation tax, taking into account the most up-to-date information, including the final outturn for this year, as part of the full suite of macroeconomic and fiscal projections that will be published in the Stability Programme Update next spring.

This Government has taken significant steps to mitigate the vulnerabilities around windfall corporation tax; as part of Budget 2024, I announced two new long-term investment funds; the Future Ireland Fund and the Infrastructure, Climate and Nature Fund.

These funds will invest windfall receipts to help part-fund the response to future structural fiscal challenges, including the impact of an ageing population, as well as to assist with funding infrastructure and climate-related projects, and will ensure that these receipts are not used to fund permanent spending commitments.

More generally, the risks around corporation tax reinforce the importance of implementing a broadly based tax system. Over the past decade or so, a number of important changes have been introduced to broaden the tax base, including the introduction of the Universal Social Charge and Local Property Tax, while significant progress has also been made in phasing out many tax expenditures.

Of course, the best way to ensure the stability of the tax base over the long term is by continuing to pursue a sensible fiscal policy that balances continued investment in our public services and infrastructure with the long-term sustainability of our public finances.

Fiscal Policy

Questions (110)

Ged Nash

Question:

110. Deputy Ged Nash asked the Minister for Finance to identify the projects and initiatives in which his Department and the Government plan to invest in terms of the in excess of €3 billion to set aside as the 'climate and nature' elements of the proposed Infrastructure, Climate and Nature Fund; what assessment was made by his Department that determined that maximum drawdown from the fund out to 2030 would be approximately €3.1 billion out of a fund with a total value of €14 billion; and if he will make a statement on the matter. [51427/23]

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Written answers

Minister for Finance

On 10 October 2023, I announced the Government’s intention to establish the Future Ireland Fund and the Infrastructure, Climate and Nature Fund. The Heads of the Bill were published on 12 October and the Bill is currently in the process of being drafted.

Under the draft Heads €2 billion will be invested in the Infrastructure, Climate and Nature Fund each year from 2024 to 2030, building a total contribution to the fund of €14 billion by 2030.

The majority of the fund is aimed at providing counter cyclical support for capital projects in the event of an economic downturn. Capital projects which support a positive outcome for climate and nature would also be eligible for funding should such circumstances arise.

The €3.15bn proposed for climate and nature expenditure represents 22.5 per cent of the overall €14 billion and will be a significant contribution to addressing climate and nature issues.

The €3.15bn resources of the Infrastructure, Climate & Nature Fund are intended to support capital projects when specific objectives have not been met for climate such as reductions in greenhouse gas emissions or in the areas of nature and water quality such as deterioration in areas of special conservation or reductions in biodiversity.

This is a demand led scheme where projects will be proposed by relevant Departments and listed for approval of Government through the work of the Minister for Public Expenditure, National Development Plan Delivery and Reform.

Insurance Coverage

Questions (111)

Pádraig O'Sullivan

Question:

111. Deputy Pádraig O'Sullivan asked the Minister for Finance if he will engage with the insurance industry to discuss the provision of flood cover, particularly into the future due to the worsening effects of climate change; and if he will make a statement on the matter. [51210/23]

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Written answers

Minister for Finance

As Minister for Finance, I have policy responsibility for the development of the legal framework governing financial services regulation, including for the insurance sector. It should be noted that the provision of insurance cover and the price at which it is offered is a commercial matter for those providers and is based on an assessment of the risks they are willing to accept. Therefore, under the EU Solvency II Directive, neither the Minister for Finance nor the Central Bank can compel insurers to provide such cover. The insurance industry has informed the Department 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.

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. According to the OPW, the economic benefit in flood damage and losses avoided from work completed thus far has been estimated to be in the region of €1.9 billion. This investment has allowed the OPW, since 2018, to treble the number of flood relief schemes at design and construction stage to almost 90. This approach of prioritising schemes means that, together with the 53 schemes complete protecting communities across the country, work is underway or complete to protect 80 per cent of at-risk properties nationwide.

Where such defences have been built, there is the reasonable expectation that insurers will provide cover. Discussions 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.

As has been the case, the Department of Finance will actively encourage industry to have a more responsive approach to the matter. In terms of domestic and international policy developments it will engage with the Central Bank of Ireland; and also at the EU and OECD level on these issues as they arise where the so-called ‘insurance protection gap’ is gaining increased prominence.

It may interest the Deputy 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.

Finally, please be assured that Government 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, particularly in light of recent events. Minister of State Carroll MacNeill T.D. will be meeting with the CEOs of the major insurers later this month and will be pressing them to deal with their affected policy holders, fairly and efficiently and in-line with the Central Banks consumer protection code.

Credit Unions

Questions (112)

David Stanton

Question:

112. Deputy David Stanton asked the Minister for Finance to outline his policy with respect to credit unions; the action he is taking or plans to take to encourage credit unions to foster good saving habits among young people; and if he will make a statement on the matter. [51546/23]

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Written answers

Minister for Finance

I thank the Deputy for his question.

My policy, and that of Minister Carroll MacNeill is to support the progression of credit unions and enable the movement to become a composite provider of financial services to all members of society.

The Deputy's question is focussed on young people. The core ethos of credit unions is to serve all its members and its community. Credit unions reach the younger people of its community through a myriad of initiatives including sponsorship of local teams, attendance at local events and supporting students by offering funds in the form of educational bursaries or grants.

Encouraging children to save teaches them important financial lessons such as planning, budgeting and money management skills. A huge part of the ethos of the credit union movement is financial education for everyone in the community. Credit unions aim to ensure that future generations are financially educated and empowered.

Credit unions offer children’s savings account. These accounts are for members who are under 16 years of age, with these accounts being the sole property of the minor in question. To open a children’s saving account, the child will generally be asked to come into their local credit union with a parent or guardian to open the account.

Junior Savers Week takes place each year in September and aims to raise awareness around the importance of children saving. The most recent Junior Savers Week took place from 25th September – 1st October 2023. Junior Savers Week is designed to offer fun and enjoyable activities for children, while also highlighting the value of money and the benefits of prudent saving and spending.

I encourage all young people, and indeed all people to get in touch with your local credit union, open an account and learn about all the services they can offer.

Question No. 113 answered with Question No. 84.

Debt Collection

Questions (114)

Brendan Griffin

Question:

114. Deputy Brendan Griffin asked the Minister for Finance if he is aware of elderly people being pursued by financial companies for historic debts; if he is aware of the extreme distress being caused to people in such circumstances; and if he will make a statement on the matter. [51581/23]

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Written answers

Minister for Finance

The Deputy will be aware that resolving any debt issues requires engagement between the borrower and lender. Only through such engagement can solutions be found.

There are a range of supports available for anyone, regardless of their age or circumstance, who is experiencing difficulties dealing with debt. The Money Advice and Budgeting Service (MABS) offers free impartial advice on dealing with debt.

The Deputy will also be aware that a person in difficulty could contact the Insolvency Service of Ireland (ISI), which is an independent body set up to help tackle personal debt problems. The ISI has put in place a regulated network of financial advisors known as personal Insolvency Practitioners (PIPs), to provide people with debt advice and to work with creditors on their behalf to work out a solution for those in difficulty.

The ISI has a range of debt solutions to help get people back on track financially, including a Personal Insolvency Arrangement, a Debt Relief Notice, a Debt Settlement Arrangement or Bankruptcy. Following a consultation, a PIP will advise which solution best suits a person’s individual situation.

I would also highlight to the Deputy that there is a robust consumer protection framework in place to protect people who are dealing with arrears on mortgages. The same protections are provided for borrowers under the consumer protection framework regardless of the regulated financial services provider with whom they are dealing, be that a bank, retail credit firm (RCF) or credit servicing firm (CSF).

Regulated entities are authorised and supervised by the Central Bank of Ireland and are subject to the full suite of relevant regulatory requirements and financial services legislation, including the Code of Conduct on Mortgage Arrears (CCMA).

There is a broad range of measures in place to protect mortgage holders who are experiencing difficulty with their repayments. The CCMA outlines how a lender must act if a borrower is in, or facing, mortgage arrears. The CCMA sets out the process that entities must follow when a borrower is experiencing difficulties with their mortgage payments. Due regard must be given to the fact that each case is unique and needs to be considered on its own merits.

Regulated entities must explore all of the options for alternative repayment arrangements (ARAs) in order to determine which ARA, if any, is appropriate and sustainable for a distressed borrower’s individual circumstances. The range of sustainable solutions being offered to consumers has expanded significantly including the use of new ARAs, mortgage-to-rent and personal insolvency arrangements.

The CCMA must be complied with under the law and the Central Bank has the power to take enforcement action against any regulated entity who does not act in compliance with the CCMA. The Central Bank continues to supervise compliance with the CCMA and will investigate any issues that arise, including patterns of behaviour that suggest that the CCMA process is not being followed.

This CCMA has been designed to protect consumers and regulated lenders are legally obliged to comply with it. The Code requires lenders to:

• Provide dedicated and specially trained staff in their Arrears Support Unit to manage cases. This includes having any meetings with consumers in private and referring them to their online or hardcopy information.

• Follow the Mortgage Arrears Resolution Process (MARP), which sets out how lenders must communicate with consumers; assess their situation with the aim of coming to a resolution. It includes having an appeals process in place so consumers can appeal certain decisions of their lender. Appeals can ultimately be referred to the Financial Services and Pensions Ombudsman (FSPO).

Finally, if the Deputy has evidence that firms are pursuing borrowers contrary to the provisions of the CCMA, the Central Bank of Ireland will consider any such information as part of their supervisory duties.

Tax Credits

Questions (115)

Denis Naughten

Question:

115. Deputy Denis Naughten asked the Minister for Finance if he will review the relief available under the incapacitated child tax credit; and if he will make a statement on the matter. [51472/23]

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Written answers

Minister for Finance

The legislation governing entitlement to the incapacitated child tax credit is contained in section 465 of the Taxes Consolidation Act 1997, as amended. An individual is entitled to the incapacitated child tax credit if he or she proves that at any time during the year of assessment, he or she has a child who is:

• under 18 years of age and is permanently incapacitated by reason of mental or physical infirmity, or

• if over the age of 18 years at the beginning of the year, is permanently incapacitated from maintaining himself/herself and had become so permanently incapacitated either before reaching 21 years of age or after that age while receiving full-time instruction at any university, college, school or other educational establishment.

The incapacitated child tax credit is valued at €3,300 per qualifying child for the 2023 year of assessment. As announced in Budget 2024, I am increasing the incapacitated child tax credit by €200 to €3,500 per qualifying child for 2024 and subsequent years.

A child under 18 is regarded as permanently incapacitated by reason of mental or physical infirmity only if that infirmity is such that, if the child were over 18, there would be a reasonable expectation that he or she would be incapacitated from maintaining himself or herself.

For the purposes of the credit, “maintaining” means the ability to support oneself by earning a living from working. Where the child is under 18, the incapacity must be such that, even with the benefit of any treatment, device, medication or therapy, the child is unlikely to be able to maintain themselves when he or she reaches 18.

In order to establish entitlement to the credit in respect of any such child, medical evidence provided by the child’s medical practitioner is required to confirm both the extent of the incapacity and whether the incapacity permanently prevents the child from being able, in the long term, to maintain himself or herself independently when over the age of 18 years.

Detailed information on the operation of the tax credit is available on Revenue’s website, at: www.revenue.ie/en/personal-tax-credits-reliefs-and-exemptions/children/incapacitated-child-credit/index.aspx.

It is noted that this credit applies in addition to other various supports from other parts of Government, including the Department of Social Protection, the Department of Health and the Department of Children, Disability, Equality and Integration that assist those with caring responsibilities. I also note that, in its 2009 report, the former Commission on Taxation recommended for reasons of equity that, ultimately, “the appropriate level of State support be provided to all incapacitated children through direct expenditure and that the tax credit be discontinued”. Such a course of action would obviously require very careful consideration and is not on the agenda at the present time. As with all tax measures and reliefs, the incapacitated child tax credit is kept under regular review by my Department as part of its ongoing programme of work.

Insurance Coverage

Questions (116)

Aindrias Moynihan

Question:

116. Deputy Aindrias Moynihan asked the Minister for Finance what measures are being considered to assist homeowners whose home insurance does not include flood cover; and if he will make a statement on the matter. [51550/23]

View answer

Written answers

Minister for Finance

As Minister for Finance, I have policy responsibility for the development of the legal framework governing financial services regulation, including for the insurance sector. It should be noted that the provision of insurance cover and the price at which it is offered is a commercial matter for those providers and is based on an assessment of the risks they are willing to accept. Therefore, under the EU Solvency II Directive, neither the Minister for Finance nor the Central Bank can compel insurers to provide such cover.

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 a reasonable expectation that insurers will provide cover.

Alternative flood insurance models have been considered by the Department of Finance in its review of policy in relation to flood insurance in 2016, and the ‘Public Consultation on Climate Change and Insurance’ in 2019. It was found that alternative approaches, including legislating for compulsory cover would have limited impact on the availability of flood cover. This found that mandating the provision of flood cover would result in, amongst other things: an increase in premia for all property insurance policies; increased risk that insurers decide to withdraw from the market and potential contravention of EU rules.

Discussions 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 on 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. Separately, the Department has regular meetings with Insurance Ireland on a range of insurance-related issues including flood cover.

Arising from this, separate industry and Central Bank of Ireland surveys indicate that 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 to mobilise.

It is also worth noting 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. It has access to a wide range of providers and products, and can offer advice for customers in sourcing cover. It 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 encouraging industry to have a more responsive approach to the matter; engaging with the Central Bank of Ireland; and considering the impact of climate change on insurance over the long term, including through policy channels such as the European Commission and OECD.

Finally, please 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.

Question No. 117 answered with Question No. 109.

Insurance Industry

Questions (118)

Aindrias Moynihan

Question:

118. Deputy Aindrias Moynihan asked the Minister for Finance what reductions in motor insurance premiums could be achieved to benefit motorists on the announcement that insurance details from the MIBI is now shared directly with An Garda Síochána; and if he will make a statement on the matter. [51549/23]

View answer

Written answers

Minister for Finance

I welcome the commencement of the information sharing arrangements between An Garda Síochána and the Motor Insurance Bureau of Ireland (MIBI) which will help make our roads safer.

The Irish Motor Insurance Database (IMID) will provide a resource for An Garda Síochána to combat uninsured driving, enabling it to verify to see if a vehicle is insured and if the driver is covered to drive it. This database was established using the data sharing agreement between An Garda Síochána and the MIBI as provided for in the Road Traffic and Roads Act 2023. One of the key principles behind that legislation was to facilitate the sharing of insurance data with An Garda Síochána so as to facilitate easier identification of uninsured vehicles operating on Irish roads. According to the latest Motor Insurers Bureau of Ireland (MIBI) estimates, 1 in every 12 vehicles are uninsured.

The new database is of benefit both from a safety and a cost perspective. The cost of uninsured drivers is borne by law-abiding drivers though higher insurance premiums, equivalent to around €30-€35 attributable to every premium sold. As such, reducing the level of uninsured driving, including through the use of the new database, could thereby help lower costs for policyholders.

Over time, as this new law enforcement resource is utilised and as the number of uninsured vehicles on Irish roads reduce, it is expected this will lead to a reduction in the number of claims caused by uninsured vehicles received by the MIBI. A reduction in claims should in turn reduce the annual compensation payments to the victims of road traffic accidents involving uninsured vehicles provided by the MIBI. Should this be achieved, this should have a knock on impact on the levy applied on all motor insurers operating in Ireland, which forms part of insurers’ cost base.

More broadly, I wish to reassure the Deputy that this Government has continued to target policy measures to address the cost of insurance, through the Action Plan for Insurance Reform. Key achievements include the new Personal Injuries Guidelines, which have reduced average award levels by nearly 40 per cent, including for motor claims.

According to CSO data for October 2023, the price of motor insurance reduced by 15 per cent since the implementation of the Guidelines, and was 42.9 per cent lower than its peak in July 2016. It is my expectation that over time, the cumulative implementation of the Action Plan measures will generate additional gains for motor insurance customers.

Minister of State Carroll MacNeill will be meeting shortly with the main insurance firms here in order to stress the need to reflect all savings from this reform agenda in their product offering, including via lower premiums.

I also look forward to the upcoming National Claims Information Database motor report, which will provide important insights into the health of the motor insurance market. This rich data source will continue to support Government in monitoring the impact of reforms, including on the premiums paid by consumers.

Both I and the Minister of State Carroll MacNeill, along with officials, will continue to engage on all aspects of insurance reform, including motor insurance issues. These matters remain a priority for this Government.

Question No.120 answered with Question No. 88.

Question No. 119 answered with Question No. 88.