Peadar Tóibín
Ceist:208. Deputy Peadar Tóibín asked the Minister for Finance if a person who is in mortgage distress may cancel a compulsory annuity scheme and receive the cash balance in order to pay the mortgage. [39886/14]
Amharc ar fhreagraMortgage Repayments
Ceisteanna (208)
Freagraí scríofa
I assume that the reference in the question to a compulsory annuity scheme is a reference to a pension annuity.
The Deputy will appreciate that since I do not have the full details of the particular case to which he may be referring, I can only comment in general terms on the issues raised.
Prior to Finance Act 1999, any person taking a pension from a Defined Contribution pension scheme or a Retirement Annuity Contract had no choice but to purchase a pension annuity with their remaining pension pot after drawing down the permissible tax-free retirement lump sum. Finance Act 1999 introduced options to provide control, flexibility and choice to certain individuals in relation to the drawing down of benefits from their pension plans.
The choices which then became available included the existing option to purchase an annuity with those remaining pension funds, and new options to receive the balance of the pension funds in cash (subject to tax, as appropriate), to invest in an Approved Retirement Fund (ARF) or an Approved Minimum Retirement Fund (AMRF), subject to certain conditions. Access to these flexible options was extended to all main benefits from retirement benefit schemes (other than Defined Benefit pension arrangements) in Finance Act 2011.
Clearly, I cannot say why a particular individual may not have been in a position to avail of any of these options other than to purchase a pension annuity. However, where an individual has agreed or is otherwise contracted to the purchase of a pension annuity and the purchase is effected, I am not aware of any circumstance in which the annuity arrangement may be cancelled as outlined in the question.
Flood Risk Insurance Cover
Ceisteanna (209)
Maureen O'Sullivan
Ceist:209. Deputy Maureen O'Sullivan asked the Minister for Finance the further discussions he has held with the Irish Insurance Federation following regarding the problems facing people who live in flood risk areas with regard to getting house insurance especially those people in areas where there has been significant flood prevention work carried out. [39979/14]
Amharc ar fhreagraFreagraí scríofa
The provision of new flood cover or the renewal of existing flood cover is a commercial matter for insurance companies, which is based on a proper assessment of the risks they are accepting and the need to make adequate provisioning to meet these risks. As a matter of course, insurance companies carry out reviews of the risks they are prepared to insure against and sometimes make decisions to discontinue certain types of cover which they consider high risk. Insurance Ireland has indicated that 98% of policyholders have household insurance which includes flood cover.
The Office of Public Works (OPW) and Insurance Ireland have agreed a Memorandum of Understanding on a sustainable system of information sharing in relation to completed flood alleviation schemes. The outcome of this arrangement is that the insurance industry will have a much greater level of information and understanding of the extent of the protection provided by completed OPW flood defence works and will therefore be able to reflect this in assessing the provision of flood insurance to householders in areas where works have been completed.
My Department has asked Insurance Ireland when they will be in a position to provide hard information which will demonstrate that the Memorandum of Understanding agreed by Insurance Ireland and the OPW has led to an increase in the availability and reduction of cost of insurance in the twelve areas where the OPW has provided the insurance industry with information on completed flood alleviation schemes. I am informed by the OPW that the Minister for State met with Insurance Ireland on 29 October and again requested that they provide information on the extent to which the data provided by OPW is being utilised by insurance companies, and the impact this is having on the availability of cover. Insurance Ireland have indicated that they are gathering data on this subject and will have information available in the coming months. The OPW and Insurance Ireland have also agreed to resume regular meetings of the joint OPW/Insurance Ireland Flood Working Group. The OPW is continuing its work on developing data on completed flood relief schemes in the format required by Insurance Ireland. It is expected that a further batch of data will be provided to Insurance Ireland before the end of the year.
IBRC Loans
Ceisteanna (210)
Mick Wallace
Ceist:210. Deputy Mick Wallace asked the Minister for Finance if any debt has been written off by Irish Bank Resolution Corporation for companies (details supplied) or any subsidiaries of those companies; and if so, the amount write-off debt involved each time. [39985/14]
Amharc ar fhreagraFreagraí scríofa
I am advised that the Special Liquidators are not in a position to comment on individual cases. The information requested is confidential and it would not be appropriate for the Special Liquidators to release such information.
Freedom of Information Remit
Ceisteanna (211)
Mick Wallace
Ceist:211. Deputy Mick Wallace asked the Minister for Finance his views, in the interests of transparency, of bringing Irish Bank Resolution Corporation under the Freedom of Information Acts, with a view to clearing up any misunderstandings or suspicions that persons of influence gain favour. [39986/14]
Amharc ar fhreagraFreagraí scríofa
It is not currently proposed that the Freedom of Information Act will be extended to regulated financial services providers including Irish Bank Resolution Corporation (in Special Liquidation). Relative to their private competitors, financial institutions in which the State have an interest would be subject to an uneven competitive market environment if they were found to be subject to freedom of information legislation. Such an extension would be likely to impede the ability of the Special Liquidators in maximising the return to the creditors of the bank including the State. This approach is similar to that taken in relation to many other commercial State bodies which also operate in competitive markets.
Tax Credits
Ceisteanna (212)
Jack Wall
Ceist:212. Deputy Jack Wall asked the Minister for Finance if a person (details supplied) in County Kildare is in receipt of the married couple's tax allowance rate for 2014; and if he will make a statement on the matter. [40004/14]
Amharc ar fhreagraFreagraí scríofa
I have been advised by the Revenue Commissioners that the person concerned is in receipt of the married couple's tax credit and increased rate band for 2014.
A tax credit certificate issued to the person concerned on 10 January 2014 including those details. In addition his employer was notified of relevant details at the same time.
Debt Restructuring
Ceisteanna (213)
Michelle Mulherin
Ceist:213. Deputy Michelle Mulherin asked the Minister for Finance his plans to engage constructively at the UN in developing the modalities for the implementation of the newly agreed multi-lateral framework on debt restructuring as part of the UN financing for development process; and if he will make a statement on the matter. [40029/14]
Amharc ar fhreagraFreagraí scríofa
In my capacity as Minister for Finance, I do not have policy responsibility in relation to Ireland's representation at the UN, responsibility for which falls under the aegis of the Minister for Foreign Affairs and Trade. I have therefore asked that the Deputy's Question be referred to that Minister for reply.
Departmental Reports
Ceisteanna (214)
Michelle Mulherin
Ceist:214. Deputy Michelle Mulherin asked the Minister for Finance if the Government's annual report on the World Bank and IMF will be jointly produced by his Department and Irish Aid and be introduced and debated in Dáil Éireann; and if he will make a statement on the matter. [40030/14]
Amharc ar fhreagraFreagraí scríofa
In my capacity as Governor for Ireland at the IMF and the World Bank, my Department manages Ireland's relationship with these institutions. In accordance with Section 10 of the Bretton Woods Agreements (Amendment) Act 1999, my Department prepares an Annual Report entitled "Ireland's Participation in the International Monetary Fund and the World Bank", which I present to Dáil Éireann by end-March each year. This report provides up-to-date and comprehensive information on Ireland's relationship and activities with regard to the IMF and the World Bank throughout the preceding year.
The Report is prepared in conjunction with other Departments and Agencies including the Central Bank of Ireland, Irish Aid and the Department of Environment, Community and Local Government. I would refer the Deputy to the most recent version of this report which is available at www.finance.gov.ie/publications.
Bank Charges
Ceisteanna (215)
Terence Flanagan
Ceist:215. Deputy Terence Flanagan asked the Minister for Finance his views on a matter (details supplied) regarding bank charges; and if he will make a statement on the matter. [40037/14]
Amharc ar fhreagraFreagraí scríofa
While credit institutions in Ireland are independent commercial entities and I have no statutory role in relation to the charges applied by credit institutions, section 149 of the Consumer Credit Act 1995 requires that credit institutions, prescribed credit institutions and bureaux de change must make a submission to the Central Bank if they wish to introduce any new customer charges or increase any existing customer charges in respect of certain services. Section 149 does not cover interest rates rather it applies to fees and commissions only.
My Department published a report on the review of the regulation of bank fees and charges in December 2013. This contains a detailed description of the process by which the Central Bank makes decisions on whether or not to approve proposed charges. It is available on my Department's website at www.finance.gov.ie.
The following are the key findings of the review of the regulation of bank fees and charges undertaken by my Department:
- net fee and commission income divided by average assets in Irish banks was well below the average of their peers,
- net fees and commissions are lower in the Irish banks than in their European peers relative to net interest income,
- fee and commission income have become a more important source of income to the banks in recent years and banks have been able to increase fee and commission income since 2009 despite the restrictions imposed by section 149,
- competition in the Irish banking sector has reduced significantly since the onset of the economic crisis and that this reduction is not related to Section 149,
- it is too early to say whether the recent changes in legislation (under the Central Bank Supervision and Enforcement Act 2013) have been successful in attracting new entrants to the Irish banking sector,
- Section 149 does appear to exert a restraining effect on the development of innovative products by the existing banks in Ireland but this may not be to the detriment of consumers,
- Section 149 may lead to inefficiency in pricing of financial products by the banks in Ireland, and
- Low customer mobility may mean that banks can increase prices without fearing a loss of customers.
The review considered a number of possible changes to the existing regime but concluded that it would not be appropriate to repeal Section 149 at this point in time. The lack of competition in the banking sector means that the removal of section 149 would give unfettered price setting power to the incumbent banks. This issue should be revisited when competition in the banking sector has improved significantly.
Central Bank of Ireland
Ceisteanna (216)
John Lyons
Ceist:216. Deputy John Lyons asked the Minister for Finance if his Department will be making a submission to the Central Bank of Ireland regarding its proposed mortgage rules to be introduced next year; and if he has a response to situations where consumers have already been approved mortgages under existing rules but will not draw down these loans until next year. [40068/14]
Amharc ar fhreagraFreagraí scríofa
Under Section 49 of the Central Bank (Supervision and Enforcement) Act 2013, the Central Bank is required to consult with the Minister for Finance, and it may also consult with such other persons as it considers appropriate, before making regulations as provided for under that Act.
As the Deputy is aware, the Central Bank has now commenced a public consultation process on the proposed new macro prudential rules for mortgage lending and my Department will avail of the opportunity to participate in the process. Furthermore, any person who wishes to make a submission on this matter can do so to realestate@centralbank.ie by 8 December next.
Consumers who have already been approved mortgages under existing rules, but will not draw down these loans until next year, may be interested to note the following points from the Central Bank consultation paper:
- If a regulated financial service provider has entered into a Mortgage Offer (Sanction in Principle) commitment before the date on which the LTV/LTI limits come into effect, the limits do not apply to that commitment. If a regulated financial service provider enters into a Mortgage Offer (Sanction in Principle) commitment after the date on which the LTV/LTI limits come into effect, the limits do apply to that commitment should the mortgage be drawn down.
- Committed but undrawn amounts on an existing mortgage lending facility that was formally agreed via a signed letter of offer before the date on which the LTV/LTI limits come into effect will not be included in the limits.
Property Tax Rate
Ceisteanna (217)
Eoghan Murphy
Ceist:217. Deputy Eoghan Murphy asked the Minister for Finance if he will consider freezing any upcoming compulsory revaluation dates for the local property tax as per the legislation which determines periods at which homes must be revalued, in view of the rapidly increasing value in houses in Dublin. [40083/14]
Amharc ar fhreagraFreagraí scríofa
The Finance (Local Property Tax) Act 2012 (as amended) sets out how a residential property is to be valued for Local Property Tax (LPT) purposes. As LPT is a self-assessed tax, the amount of LPT due on a property is based on the self-assessed valuation at 1 May 2013 that was declared by the liable person when filing the 2013 LPT1 Return, and applies for the four-year period until 2016.
The initial valuation of a property on 1 May 2013, assuming it was made in good faith, is valid from 2013 to 31 October 2016, and will not be affected by any increase or decrease in property prices or other changes, including repairs or improvements made, during this period. The next valuation date will be 1 November 2016.
The Deputy will be aware that section 20 of the Finance (Local Property Tax) Act 2012 (as amended) allows elected members of a local authority to pass a formal resolution to vary the basic rate of LPT by up to 15% for their functional area, which may result in a lower or higher LPT rate applying for 2015.
I am satisfied that the legislation provides certainty for homeowners, and I have no plans to amend the basis of valuation of property for LPT purposes.
Property Tax Exemptions
Ceisteanna (218)
Eoghan Murphy
Ceist:218. Deputy Eoghan Murphy asked the Minister for Finance if he will provide details on the potential cost to the Exchequer of introducing a local property tax rebate or exemption for homes providing accommodation to students where there was a 25% exemption per student accommodated, 33% exemption per student accommodated, and 50% exemption per student accommodated. [40086/14]
Amharc ar fhreagraFreagraí scríofa
I am informed by the Revenue Commissioners that it is not possible to quantify the potential cost of introducing a Local Property Tax (LPT) rebate for homes providing accommodation to students, as LPT returns do not include information identifying properties with student tenants on which to base an estimate.
Water Charges Administration
Ceisteanna (219)
Michael McGrath
Ceist:219. Deputy Michael McGrath asked the Minister for Finance if taxpayers will benefit from the new water charge tax credit at source as occurs with medical insurance relief or if they will be required to claim the tax credit in arrears; and if he will make a statement on the matter. [40106/14]
Amharc ar fhreagraFreagraí scríofa
As the Deputy is aware, I announced in the Budget that tax relief for water charges will be introduced. Relief will be available at the standard rate of 20% on water charges paid, up to a maximum of €500 per annum, which may result in tax relief of up to €100.
The tax relief will be provided to whoever pays the bill. This will enable, for example, adult children who pay for elderly parents to receive the relief. The relief will be available in the year following that in which the charge applied.
My officials, in conjunction with the Revenue Commissioners, are still working on the precise details of the application process that will be implemented, but I can confirm that tax relief is unlikely to be provided at source.
Water Charges Administration
Ceisteanna (220)
Michael McGrath
Ceist:220. Deputy Michael McGrath asked the Minister for Finance if a person who is not fully exhausting their current tax credits by virtue of their current income level will not receive any benefit from the water charge tax credits even if they pay their bill in full; and if he will make a statement on the matter. [40107/14]
Amharc ar fhreagraFreagraí scríofa
As the Deputy is aware, I announced in the Budget that tax relief for water charges will be introduced. Relief will be available at the standard rate of 20% for water charges paid, up to a maximum of €500 per annum, which may result in a tax relief of up to €100.
By its very nature, a tax relief is only available to those who have a tax liability. In order to assist those with low, or no, tax liability, the relief will be provided to whoever pays the bill. This will enable, for example, adult children who pay for elderly parents to receive the relief. The relief will be available in the year following that in which the charges were paid.
It is also worth nothing that the Department of Social Protection will provide additional assistance in respect of water charges to those in receipt of the household benefits package or the fuel allowance.
Budget 2015
Ceisteanna (221)
Michael McGrath
Ceist:221. Deputy Michael McGrath asked the Minister for Finance the overall budget adjustment for 2015 as will be reported to the European Commission; and if he will make a statement on the matter. [40109/14]
Amharc ar fhreagraFreagraí scríofa
The adjustment in Budget 2015 included a suite of tax measures with a net cost of around €420 million in 2015. With regard to voted expenditure, there was a net increase in expenditure of the order €630 million. These measures were offset by an increase in special dividends of €250 million. Furthermore, the Deputy should be aware that the second round economic effects of the measures included in the Budget reduce the impact on tax revenues by an estimated €155 million in 2015.
The European Commission is already aware of the details of Budget 2015 because, in accordance with our obligations under the 'Two-Pack' regulations, my Department prepared and submitted Ireland's Draft Budgetary Plan (DBP) to the European Commission on 15 October 2014. The DBP was also laid before the Oireachtas on 15 October 2014 and it can be found on my Department's website on the following link: http://www.finance.gov.ie/sites/default/files/DBP%20Final%20REV.pdf.
The DBP sets out the Budget information in a harmonised format set by the European Commission as this assists the Commission with its analysis of the DBPs from all Euro Area Member States that are not in a macroeconomic adjustment programme.
Irish Fiscal Advisory Council Reports
Ceisteanna (222)
Michael McGrath
Ceist:222. Deputy Michael McGrath asked the Minister for Finance if the Irish Fiscal Advisory Council will be asked to comment on the measures contained in the budget separate to its comment on the macroeconomic assumptions underpinning the budget; and if he will make a statement on the matter. [40110/14]
Amharc ar fhreagraFreagraí scríofa
The Fiscal Council will be producing their seventh Fiscal Assessment Report in November. This report will include an assessment of the official macroeconomic and budgetary forecasts and also an assessment of whether the fiscal stance is conducive to prudent economic and budgetary management, with reference to the EU Stability and Growth Pact.
The assessment of the fiscal stance adopted in Budgets is a core function of the Council as set out in Section 8(4) of the Fiscal Responsibility Act 2012.
Tax Yield
Ceisteanna (223)
Michael McGrath
Ceist:223. Deputy Michael McGrath asked the Minister for Finance the projected yield in 2015 from DIRT; and if he will make a statement on the matter. [40111/14]
Amharc ar fhreagraFreagraí scríofa
The projected yield from Deposit Interest Retention Tax (DIRT) in 2015 is in the region of €515 million.
Tax Reliefs Eligibility
Ceisteanna (224)
Michael McGrath
Ceist:224. Deputy Michael McGrath asked the Minister for Finance the projected numbers of persons who will benefit in 2015 from the DIRT relief announced in the budget based on an overall cost of €2.8 million; and if he will make a statement on the matter. [40112/14]
Amharc ar fhreagraFreagraí scríofa
Having regard to the number of first time buyers in recent years, and the growing property market, my Department estimates that in the region of 9,500 first time buyers would be eligible to benefit from the measure in 2015.
DIRT will be refunded in respect of savings up to a maximum of 20% of the purchase price of the property. The relief will apply to DIRT paid in the four year prior to the year of purchase. The scheme will apply in the years 2015, 2016 and 2017.
Tax Yield
Ceisteanna (225, 226, 227, 228, 229)
Michael McGrath
Ceist:225. Deputy Michael McGrath asked the Minister for Finance the cost in 2015 and in a full year of the increase in the standard rate band of income tax by €1,000 from €32,800 to €33,800 for single persons and from €41,800 to €42,800 for married one earner couples; and if he will make a statement on the matter. [40113/14]
Amharc ar fhreagraMichael McGrath
Ceist:226. Deputy Michael McGrath asked the Minister for Finance the cost in 2015 and in a full year of the increase of the reduction in the higher rate of income tax from 41% to 40%; and if he will make a statement on the matter. [40114/14]
Amharc ar fhreagraMichael McGrath
Ceist:227. Deputy Michael McGrath asked the Minister for Finance the cost in 2015 and in a full year of removing 80,000 taxpayers from the universal social charge; and if he will make a statement on the matter. [40115/14]
Amharc ar fhreagraMichael McGrath
Ceist:228. Deputy Michael McGrath asked the Minister for Finance if he will provide separately the breakdown of the cost in 2015 and in a full year of the reductions in the 2% and 4% universal social charge rates and the raising of the USC thresholds; and if he will make a statement on the matter. [40116/14]
Amharc ar fhreagraMichael McGrath
Ceist:229. Deputy Michael McGrath asked the Minister for Finance the yield in 2015 and in a full year from the introduction of the 8% rate of universal social charge on incomes over €70,000; and if he will make a statement on the matter. [40117/14]
Amharc ar fhreagraFreagraí scríofa
I propose to take Questions Nos. 225 to 229, inclusive, together.
I am informed by the Revenue Commissioners that the first and full year cost of increasing the standard rate band by €1,000, is estimated at €134 million and €180 million respectively. The first and full year cost of reducing the higher rate of income tax from 41% to 40%, is estimated at €158 million and €225 million respectively. The first and full year cost of the increase of the Universal Social Charge (USC) threshold from €10,036 to €12,012, is estimated at €19 million and €26 million respectively. The first and full year cost of reducing the 2% and 4% USC rates to 1.5% and 3.5% respectively and adjusting the USC threshold from €10,036 to €12,012, is estimated at €239 million and €325 million respectively. The first and full year yield from introducing an 8% rate of Universal Social Charge applicable to incomes over €70,044, is estimated at €52 million and €71 million respectively.
These figures are estimates from the Revenue tax forecasting model using latest actual data for the year 2012, adjusted as necessary for income, self-employment and employment trends in the interim. They are estimated by reference to 2015 incomes and are provisional and may be revised. Married persons or civil partners who have elected or who have been deemed to have elected for joint assessment are counted as one tax unit.