Written Answers Nos. 177-197
177. Deputy Pearse Doherty asked the Minister for Finance if he will provide an overview of what is involved in the valuation of the Irish Bank Resolution Corporation mortgage loan book; and if he will confirm the time required for the completion of an independent valuation. [12631/13]
Amharc ar fhreagraAs part of the role of the liquidators, the assets of IBRC will be valued independently before being sold. Any assets not sold to third parties (including loan counterparties and other financial institutions) at or above the valuation price will be sold to NAMA at the independent valuation. The Special Liquidators are still in the process of devising and implementing a sales process in respect of IBRC’s assets including the mortgage portfolio. I have been advised that the Special Liquidators are in the process of obtaining suitable independent professional advisors who shall employ standard valuation methodologies appropriate to each class of asset of IBRC.
The Special Liquidators anticipate having the valuations of the loan books completed by the end of June 2013.
178. Deputy Pearse Doherty asked the Minister for Finance if an auction model has been considered for the sale of the Irish Bank Resolution Corporation mortgage loan book; and if he will make a statement on the matter. [12632/13]
Amharc ar fhreagraAs part of the role of the liquidators, the assets of IBRC will be valued independently before being sold. Any assets not sold to third parties (including loan counterparties and other financial institutions) at or above the valuation price will be sold to NAMA at the independent valuation. The Special Liquidators are still in the process of devising and implementing a sales process in respect of IBRC’s assets including the mortgage portfolio. Once this is devised I am advised that the Special Liquidators will be appointing independent sales advisors to manage the sales process. This process will be overseen by the Special Liquidators to ensure that deadlines are being met and that the best value is achieved.
179. Deputy Róisín Shortall asked the Minister for Finance further to Parliamentary Question No. 81 of 23 January 2013, if he is now in a position to provide the data requested. [12744/13]
Amharc ar fhreagraAs I informed the Deputy in my reply to her question of 23 January last, the annual return that relevant employers must submit to the Revenue Commissioners detailing, inter alia, the number of employees and the amounts of exempt income claimed under the Special Assignee Relief Programme was not due for submission until after the end of the tax year 2012. This is in order to ensure that an accurate picture of take up levels over a full tax year could be provided. Therefore, given that 2012 was the first year of the programme, reliable statistics on its uptake will not be available until later this year when the returns have been analysed.
180. Deputy Dan Neville asked the Minister for Finance the position regarding moneys due to a person (details supplied) in County Limerick; and if he will make a statement on the matter. [12761/13]
Amharc ar fhreagraI am informed by the Revenue Commissioners that the person in question in this case is a company. The case has been examined, and all relevant refunds of tax withheld for the company, relevant to the accounting year ending 30/09/12, have been made to the company. In accordance with Section 530P, Taxes Consolidation Act 1997, any tax withheld arising for the company’s year 01/10/12 – 30/09/13, which has not been off-set against other taxes, will be made available for refund on receipt of the CT1 for that accounting period.
181. Deputy Noel Grealish asked the Minister for Finance if he or the liquidator of the Irish Bank Resolution Corporation has been in contact with any other financial institution asking them not to employ current employees of IBRC while they are involved in the wind down of the bank; and if he will make a statement on the matter. [12854/13]
Amharc ar fhreagraI can confirm that neither I nor the Special Liquidators have been in contact with any other financial institutions asking them not to employ current employees of IBRC.
182. Deputy Robert Troy asked the Minister for Finance when he intends to publish the betting amendment Bill. [12875/13]
Amharc ar fhreagraThe Betting (Amendment) Bill was published in July last year. Since that date work has been continuing by officials of my Department and Revenue on the drawing up of a number of amendments to the Bill to strengthen enforcement measures. It is my intention, given the number of amendments, to go back to Government in the very near future for approval to republish the Bill. The Deputy will be aware that under the EU Technical Standards and Regulations Directive it will be necessary to show the published Bill to the EU Commission and other Member States, which could take 3 months for clearance. However, I hope to use this time to progress the Bill through the Dáil subject to scheduling agreement between the Whips.
183. Deputy Róisín Shortall asked the Minister for Finance the approved bodies that have benefitted from tax relief on donations made to them in the last year for which figures are available; and the value of the tax relief that applied in each case. [12896/13]
Amharc ar fhreagraSection 848A of the Taxes Consolidation Act 1997 provides a scheme for tax relief on donations to eligible charities and other approved bodies. The administration of this scheme is the responsibility of the Revenue Commissioners. A list of the bodies that qualify for the scheme is available on Revenue's website at the following link: http://www.revenue.ie/en/business/authorised-charities-resident.html. For donations made pre-2013, the precise arrangements for allowing tax relief vary depending on whether the donor is a PAYE taxpayer only, a chargeable person subject to self-assessment or a company. For a PAYE only donor, the relief is given on a “grossed up” basis to the eligible charity or approved body, as the case may be, rather than by way of a separate claim to tax relief by the donor. The claim for refund is made by the eligible charity or approved body in respect of a PAYE donor. In the case of a self-assessed donor, that individual claims the relief and there is no grossing up arrangement. In the case of a company, it will claim a deduction for the donation as if it were a trading expense.
The Revenue Commissioners have advised me that their obligation to observe confidentiality for charities and small groups of taxpayers would preclude them from disclosing the amounts of tax relief allowed to individual approved bodies under the donations scheme. However, they have provided details of the total amounts refunded under the scheme, in respect of PAYE donations only, to approved bodies during 2010 and 2011 and these are shown in the following table:
|
Year |
Amount |
|
2010 |
€30.2m |
|
2011 |
€26.3m |
184. Deputy Mattie McGrath asked the Minister for Finance if he will amend section 469 (1)(f) of the Taxes Consolidation Act (1997) to delete the words, "or similar treatment prescribed by a practitioner", and to leave the word, "Physiotherapy", to ensure that extra costs are not imposed on physiotherapy patients who have not been referred by their general practitioner, hospital accident and emergency or medical consultant and to ensure that his commitment to the provision of health care in the primary care setting is protected and to ensure that they meet their goal of meeting 90% of health care needs through the primary care setting; and if he will make a statement on the matter. [12904/13]
Amharc ar fhreagraIncome tax relief in respect of health expenses is allowable in accordance with section 469 of the Taxes Consolidation Act 1997. This legislation provides for tax relief for health expenses incurred in the provision of health care. Health care is defined for the purposes of that legislation as the prevention, diagnosis, alleviation or treatment of an ailment, injury, infirmity, defect or disability and includes care received by a woman in respect of pregnancy. Health care does not include routine ophthalmic or dental treatment. The section provides that tax relief must be either for the costs of the services of a practitioner, defined as a person registered on the register established under the Medical Practitioners Act 2007, or diagnostic procedures carried out on the advice of a practitioner, which includes “physiotherapy or similar treatment prescribed by a practitioner”. Eligibility for tax relief is limited to expenses relating to treatment considered necessary and appropriate by a qualified practitioner.
Section 469 of the Taxes Consolidation Act 1997 consolidated all previous legislation pertaining to relief for health expenses, in particular section 12 of Finance Act 1967 which introduced the relief in the first instance. This section also required that physiotherapy or similar treatment be prescribed by a practitioner before qualifying for relief. This requirement has, therefore, been part of the qualifying criteria since the introduction of relief for health expenses and I am advised by the Revenue Commissioners that guidance and instructions to staff have remained unchanged in this regard.
For 2010 the cost of tax relief for health expenses was €127 million and was availed of by 368,000 individuals who had sufficient income to benefit from a claim. There is no specific breakdown in these figures of the costs related to physiotherapy.
The costs of the relief, if self-referral for physiotherapy was allowed, would be unquantifiable but it would be expected to increase the overall cost to the Exchequer. While the Government supports measures to lower the cost of medical treatment which should in turn lower the costs of health care provision by the State, an amendment as requested by the Deputy, if passed, would inevitably lead to calls for other treatments to similarly qualify for relief, which would greatly increase the overall cost of the scheme. In addition, it would inevitably lead to self-diagnosis of ailments which could have dire consequences for patients where their own diagnosis proves incorrect and they have embarked on the wrong treatment in the absence of the correct medical advice.
185. Deputy Brendan Griffin asked the Minister for Finance if he will provide details of the profits earned by grocery chains here in recent years; if he will provide a breakdown of the largest earnings; and if he will make a statement on the matter. [12924/13]
Amharc ar fhreagraI am informed by the Revenue Commissioners that the relevant information available is on the amount of gross income earned by the sector engaged in the retail sale of predominantly food, beverages or tobacco and referenced under NACE Code 4711. This is based on personal income tax returns filed by non-PAYE taxpayers and information on gross profits derived from corporation tax returns for the year 2010. The tax year 2010 is the latest year for which the necessary detailed information is available. The gross income from all sources returned by self-employed individuals engaged in this activity for 2010 was €94 million and the corresponding gross trading income returned by companies engaged in this activity for 2010 was €894 million.
Figures are rounded to the nearest million.
As regards the largest earnings of the traders involved, the Revenue Commissioners’ obligation to observe confidentiality for taxpayers and small groups of taxpayers would preclude them from giving this information.
The sector identifier used on the tax records is based on the 4 digit “NACE code (Rev. 1)” which is an internationally recognised economic activity code system. The NACE codes are not essential for the assessment and collection of taxes and duties and the correct allocation and maintenance of these codes is subject to the limit of available resources. NACE code classifications on tax records are compiled by reference to the primary area of economic activity reported by individual and corporate taxpayers on their own behalf and the taxes collected are allocated to those codes without reference to the precise economic activity which generated them.
While the accuracy of the NACE codes on tax records is sufficient to underpin broad sector-based analyses there will undoubtedly be some inaccuracies at individual level. This should be borne in mind when considering the information provided. The sector identified for this reply represents the closest equivalents in the NACE code system to the sector mentioned in the question.
186. Deputy Billy Timmins asked the Minister for Finance if the main banks are charging customers-businesses if they visit the person to discuss mortgage repayment difficulties; and if he will make a statement on the matter. [12929/13]
Amharc ar fhreagraThe Central Bank has advised me that, on 6 December 2010, it issued letters to all banks directing them to refrain from imposing interest surcharge on arrears or any other charge arising on a mortgage account in arrears to which the revised Code of Conduct on Mortgage Arrears applies and in respect of which a borrower is co-operating reasonably and honestly with the lender in the Mortgage Arrears Resolution Process. The Central Bank also advises that it is not aware of any banks charging such a fee to which the Deputy refers to and it would not expect banks to do so.
187. Deputy Eoghan Murphy asked the Minister for Finance if he will provide a breakdown in excise returns by category and by month from January 2011 to February 2013. [12950/13]
Amharc ar fhreagraThe breakdown in excise returns by category and by month from January 2011 to February 2013 is as follows:
|
2011 |
Alcohol |
Tobacco |
Oils |
Carbon |
VRT |
Other Excise |
|
JAN |
87.8 |
0.6 |
234.7 |
14.5 |
41.5 |
12.1 |
|
FEB |
35.9 |
26.8 |
176.7 |
44.7 |
57.7 |
9.0 |
|
MAR |
51.2 |
64.7 |
183.0 |
23.3 |
49.1 |
8.2 |
|
APR |
67.9 |
96.1 |
180.2 |
32.2 |
45.9 |
9.5 |
|
MAY |
67.5 |
65.4 |
177.5 |
19.4 |
33.5 |
5.5 |
|
JUN |
65.6 |
102.9 |
177.9 |
26.9 |
36.1 |
4.8 |
|
JUL |
70.8 |
113.7 |
174.3 |
22.1 |
31.4 |
12.5 |
|
AUG |
72.0 |
109.7 |
185.6 |
20.5 |
19.5 |
6.1 |
|
SEP |
70.2 |
78.3 |
174.0 |
22.2 |
36.4 |
9.0 |
|
OCT |
64.7 |
90.0 |
174.7 |
22.9 |
14.6 |
10.8 |
|
NOV |
75.3 |
110.7 |
181.3 |
24.3 |
12.2 |
7.8 |
|
DEC |
100.8 |
267.2 |
109.9 |
25.3 |
10.4 |
4.6 |
|
TOTAL |
829.5 |
1126.1 |
2129.8 |
298.2 |
388.4 |
100.0 |
|
2012 |
Alcohol |
Tobacco |
Light Oils |
Carbon |
VRT |
Other Excise |
|
JAN |
87.8 |
1.0 |
223.8 |
16.8 |
47.7 |
8.5 |
|
FEB |
35.6 |
52.8 |
166.7 |
41.3 |
62.9 |
4.1 |
|
MAR |
50.6 |
55.8 |
176.7 |
24.5 |
56.1 |
4.0 |
|
APR |
64.7 |
70.8 |
166.8 |
34.2 |
44.5 |
9.0 |
|
MAY |
61.4 |
108.0 |
180.9 |
26.0 |
33.6 |
4.8 |
|
JUN |
73.3 |
121.8 |
168.6 |
33.3 |
33.6 |
4.0 |
|
JUL |
68.4 |
80.2 |
167.7 |
27.9 |
25.8 |
10.7 |
|
AUG |
64.7 |
92.4 |
175.9 |
26.7 |
21.1 |
5.6 |
|
SEP |
68.7 |
68.3 |
165.3 |
26.4 |
17.2 |
5.8 |
|
OCT |
65.9 |
99.8 |
175.1 |
29.7 |
14.5 |
14.6 |
|
NOV |
85.0 |
97.5 |
171.9 |
33.6 |
11.2 |
5.4 |
|
DEC |
120.0 |
264.7 |
87.9 |
33.6 |
11.2 |
4.0 |
|
TOTAL |
846.1 |
1113.1 |
2027.3 |
354.0 |
379.4 |
80.5 |
|
2013 |
Alcohol |
Tobacco |
Lights Oils |
Carbon |
VRT |
Other Excise |
|
JAN |
93.1 |
0.9 |
225.5 |
26.0 |
52.1 |
8.4 |
|
FEB |
39.8 |
64.0 |
157.4 |
42.8 |
60.0 |
2.4 |
|
TOTAL |
132.8 |
64.9 |
382.9 |
68.7 |
112.1 |
10.8 |
188. Deputy Eoghan Murphy asked the Minister for Finance the amount his Department estimates the illicit trade in tobacco to be worth in terms of lost revenue to the State and lost trade to the economy. [12951/13]
Amharc ar fhreagraI am advised by the Revenue Commissioners that determining the scale of any illicit black market activity, and the losses that it causes the Exchequer and the legitimate trade, is problematic, and estimates of such losses need to be viewed with caution. I understand that the available information on possible losses to the Exchequer relates only to cigarettes. A survey in respect of 2011 carried out for the Revenue Commissioners and the Health Services Executive found that some 770 million illicit cigarettes were consumed in the State. This would indicate a loss of the order of €258 million, in excise duty and VAT, in that year. A similar survey was undertaken in 2012 and the results are being compiled at present.
I am advised also that the Revenue Commissioners do not have information on the loss caused to legitimate businesses by the illicit tobacco trade. They are, however, conscious of the threat that this criminal activity poses to law-abiding retailers, and taking action against it is a high priority for them. Revenue’s programme of action resulted in the seizure of over 95 million cigarettes and 5,276 kilograms of tobacco in 2012, and 132 convictions for smuggling or sale of illicit cigarettes or tobacco were secured during the year.
189. Deputy Tom Fleming asked the Minister for Finance if he will advise whom a person (details supplied) in County Kerry should contact regarding a panel of valuers for the valuation of property for the real estate taxes; and if he will make a statement on the matter. [13012/13]
Amharc ar fhreagraI am informed by the Revenue Commissioners that a panel of valuation experts has been in place for a number of years for the purposes of Capital Gains Tax and Capital Acquisitions Tax where valuations were challenged by Revenue. As the previous contract recently expired, the Commissioners published an invitation to tender on the etenders website (etenders.gov.ie) on 8 February 2013, in line with standard procurement procedures. In this invitation to tender, the Revenue Commissioners are seeking to establish a multiparty framework agreement comprising suitably qualified and experienced valuers to provide the Commissioners with independent expert advice where valuations of residential property, commercial property and development lands are being challenged by Revenue in connection with certain taxes and duties that they administer. The title of the tender is “Valuations of all Forms of Residential Property, Commercial Property and Development Land”. I am advised that the deadline for responses to the invitation to tender is 5 pm on Wednesday 20 March 2013.
Finally, I am advised by the Commissioners that Local Property Tax (LPT) is a self-assessed tax so in the first instance it is a matter for the property owner to calculate the tax due based on his or her assessment of the market value of the property. The Revenue Commissioners will not be valuing individual properties for LPT purposes.
190. Deputy Joe McHugh asked the Minister for Finance if he will address the concerns of a person (details supplied) in County Antrim whose personal circumstances are changing due to the liquidation of the Irish Bank Resolution Corporation; and if he will make a statement on the matter. [13029/13]
Amharc ar fhreagraAs the Deputy is aware, the legislation surrounding liquidation ranks employees as preferential creditors in respect of certain amounts owing to them on a winding up, including accrued wages and salaries, holiday pay, sick pay, statutory redundancy, pensions contributions and claims for damages arising from accidents. There are standard rules which apply to the distribution of the assets of companies in liquidation and it would not be appropriate for me to interfere with these rules. However the State does intervene to ensure that statutory redundancy is available through the Social Insurance Fund and that arrears of pay, sick pay, holiday pay or pay in lieu of statutory notice (limited to EUR600 per week up to a maximum of eight weeks) are payable from the Insolvency Payments Scheme. The Minister for Social Protection will rank as a preferential creditor of IBRC in respect of any payments made to employees of IBRC from the Social Insurance Fund or the Insolvency Payments Scheme. Any action taken by the Minister which might divert the assets from IBRC creditors to employees could be challenged in the Courts.
The special liquidators were promptly in contact with staff on Thursday 7th February and, unlike in other liquidations, the majority of employees have now been re-hired by the special liquidators, for a minimum period of 3 months, to provide some level of assurance and to ensure an orderly wind-down of the business. In addition, some staff may, in time, be re-hired by NAMA or other purchasers of the assets. This should provide some reassurance to employees.
The Special Liquidators have said that it is their key priority that all employees are fully kept up to date on all developments during the course of the special liquidation. They have indicated that their approach will be to talk with employees directly either in small groups or on a one to one basis and they also plan to communicate by email general updates to employees during the course of the special liquidation.
191. Deputy Pearse Doherty asked the Minister for Finance further to the publication of results for 2012 by Bank of Ireland, in which he owns 15% of the ordinary shares, if he will provide his reaction to the performance of the bank in 2012. [13076/13]
Amharc ar fhreagraI was pleased to see that Bank of Ireland’s 2012 results were slightly ahead of investors’ expectations and indeed prompted some in the market to upgrade their forecasts of the bank’s prospects for the years ahead. In order for Bank of Ireland to return to strength, meet the needs of the Irish economy and enable the State to exit its investment, it has to develop a profitable commercial enterprise and these results show that the bank is definitely well on its way to achieving this goal. The positive takeaways would be that the profitability of the bank is improving with a net interest margin of 1.34% in H2 2012 up 0.14% from H1 2012, auguring well for this year and beyond. The removal of the ELG scheme this year and the on-going reductions in deposit rates will also help. The bank is well capitalised with its Core Tier 1 ratio of 14.4% stronger than the market expected at year end and while impairment levels are still very high, the trend here is downwards.
There are still areas of concern however. Operating costs need to come down further while the level of non-performing loans is still rising, albeit at a slower pace. Mortgage arrears at the bank look to be close to their peak, but as I’ve said many times before I am not happy at the pace at which the banks are moving to deal with this issue. Addressing mortgage arrears is a top priority for the Government and we expect to see real progress on this issue in the months ahead.
192. Deputy Pearse Doherty asked the Minister for Finance if he will provide the latest valuation of the State’s interest in Bank of Ireland, particularly the value of its ordinary and preference shares. [13077/13]
Amharc ar fhreagraAs the Deputy will be aware, as part of its recapitalisation commitments, the State invested €4.7bn in Bank of Ireland (BOI). The State has received c.€0.5bn for its warrants which were originally attached to our preference shares, and significant income in the form of coupons and dividends on its investments. In January 2013 the State also successfully disposed of the €1.0 billion Contingent Capital instruments in Bank of Ireland at a profit of €10m. The State’s remaining investment in BOI consists of a 15% equity stake and preference shares with a nominal value of €1.8bn. The most recent valuation of these holdings is contained in the NPRF 2011 Annual Report published on the 19th July 2012 and available on its website. As at the 31st December 2011, the NPRF valuation of its investments in BOI was €1,843m consisting of preference shares of €1,473m and ordinary shares of €370m.
I understand that the value of both of these investments has improved since then as evidenced by the recent strength in BOI’s share price. As of 7th March 2013, the share price was over 14c versus 8c at the end of 2011, putting a value of approx. €660m on our equity holding. A more up to date value on our preference shares will be contained in the NPRF’s 2012 Annual Report.
193. Deputy Pearse Doherty asked the Minister for Finance further to the eventual publication on or after 4 March 2013, of the directions given by him to the National Asset Management Agency in respect of the liquidation of Irish Bank Resolution Corporation, if he will now publish the documents referred to in the directions, namely the facility agreement, deeds, transfers and schedules. [13078/13]
Amharc ar fhreagraI do not intend to publish the documents referred to in the directions, at this time, as they contain commercially sensitive information which if released could have a detrimental effect on the outcome for the taxpayer.
194. Deputy Pearse Doherty asked the Minister for Finance the safeguards the National Asset Management Agency has in place to ensure that its debtors provide accurate accounting for their businesses and that benefits are not inappropriately withdrawn from debtor businesses by their proprietors. [13079/13]
Amharc ar fhreagraI am advised by NAMA that it adopts a two-pronged approach to ensuring appropriate, accurate and timely financial reporting by debtors. Firstly, NAMA is imposing a financial reporting rigour on debtors to ensure that management information relating to each debtor’s business is delivered to NAMA. In particular, debtors are subject to on-going reporting requirements in respect of the achievement of agreed milestones and debt repayment targets and current financial metrics such as rental receipts. Debtors are also required to provide future cash flow forecasts and other specific information requirements identified by NAMA case managers. Secondly, to provide additional assurance on the information received and to enhance control over cash flows, particularly rental income, NAMA also requires the appointment of independent monitors, including financial monitors, property management service providers and project managers, whose remit is to ensure that financial information provided by debtors is consistent with the underlying books and records. These external service providers evaluate and report to NAMA on the completeness and accuracy of information presented by debtors in relation to both historical and future financial and property management activity and milestones which have been agreed with NAMA. As the Deputy is aware, these milestones were agreed as part of the debtor’s commitment to repay the amounts due to NAMA and in turn the taxpayer.
195. Deputy Pearse Doherty asked the Minister for Finance the safeguards the National Asset Management Agency has in place to ensure its employees, particularly its asset managers do not become compromised, for example, through over familiarity, in the course of their management of specific debtors. [13080/13]
Amharc ar fhreagraNAMA advises that it operates a number of safeguards to ensure that staff are equipped to successfully carry out their function on behalf of taxpayers. These safeguards include a rigorous appointments process, which deals fully with any actual or potential conflicts of interest, induction and on-going compliance training, and regular compliance updates. Other safeguards include the NAMA Credit Committee which is in place to approve credit decisions on amounts that exceed credit approval authority delegated to the NAMA CEO. All delegated authority decisions below NAMA Credit Committee are undertaken on a dual sign-off basis, and the appointment of at least two case managers to each individual debtor connection.
196. Deputy Peter Mathews asked the Minister for Finance his views on correspondence (details suplied) regarding tax relief on nursing home fees; and if he will make a statement on the matter. [13107/13]
Amharc ar fhreagraSection 469 of the Taxes Consolidation Act 1997 provides for tax relief at the taxpayers marginal rate (20 or 41%) for expenses incurred in relation to nursing home fees. However, tax relief can only be claimed when an individual has a tax liability in the same tax year as the expenses were incurred. I am informed by the Revenue Commissioners that for the tax year 2011, any tax that was paid by the individual in question was refunded. As the individual concerned has not submitted a P60 for 2012, it is not possible to say if any refund will be due.
While I appreciate the position of the individual in question, to amend one section of the Taxes Consolidation Act 1997 in order to provide tax relief for current expenditure against tax that was paid in previous years would inevitably lead to calls for all tax reliefs to be similarly refundable based on taxes paid in any year. This would place an undue burden on the Exchequer and would be extremely difficult for the Revenue Commissioners to administer.
197. Deputy Peter Mathews asked the Minister for Finance his plans for imposing a tax on maternity benefit; and if he will make a statement on the matter. [13108/13]
Amharc ar fhreagraThe position is, as I stated in my Budget day speech of 5 December 2012, that from the 1st of July 2013, Maternity Benefit will be treated as taxable income. It should be noted that it is a general principle of taxation that, as far as possible, income from all sources should be subject to taxation. In line with this principle, the majority of social welfare payments are reckonable as income for tax purposes. These include long-term payments such as the Disablement Benefit, the State Pension, Widows, Invalidity and Blind Pensions, Carers Allowance and the One Parent Family Payment as well as short term benefits such as Job Seekers Benefit. Treating these payments as income for tax purposes is essentially a matter of equity.
Of course, the extent, if any, to which taxation actually arises in a given case depends on the level of income that a recipient has in a tax year. If there is no other income besides the social welfare payment, the basic personal credits in force can be expected in most cases to ensure that no tax arises on the social welfare income itself.
There are situations currently where an employee continues to be paid by her employer, in full, while on maternity leave and, based on her PRSI contributions, is entitled to Maternity Benefit from the Department of Social Protection. The non-taxation of such benefit currently results in an employee having a greater net take-home pay for the period of maternity benefit, than if she was at work.
The rates of Maternity Benefit are earnings-related and are set to reflect post-tax income. It was never intended that individuals would gain financially by being on maternity leave. The introduction of the charge to income tax on maternity benefit payments will ensure that those with identical incomes will be treated the same for income tax purposes.
However, it should be noted that maternity benefit payments will remain exempt from Universal Social Charge and PRSI.
The Revenue Commissioners estimated that the expected yield from the taxation of Maternity Benefit payments will be €15 million in 2013 and €40 million in a full year.
In addition, I would point out that as a result of Maternity Benefit payments becoming liable to income tax for all claimants with effect from 1 July 2013, a number of possible tax outcomes could arise:
1. An individual may pay no income tax on their maternity benefit payment as their tax credits will be sufficient to reduce their tax liability to zero.
2. An individual may pay income tax on their maternity benefit payments at the standard rate.
3. An individual may pay income tax at the standard rate on a portion of the maternity benefit and the higher rate on the balance of the maternity benefit payment.
4. An individual may pay income tax on their maternity benefit payments at the higher rate.
