Written Answers Nos. 31-61
31. Deputy Paul Murphy asked the Minister for Finance the consultations he or his Department has had with AIB management concerning the recently announced intention to outsource jobs and other industrial relations issues notably reform of the pension scheme and upcoming pay discussions; his views on the industrial relations climate in the AIB group; and if he will make a statement on the matter. [4696/15]
Amharc ar fhreagraAs the Deputy will be aware under the Relationship Frameworks the State does not intervene in the day to day operations of the banks or their management decisions regarding commercial matters and hence any discussions around outsourcing, pension reform etc. are a matter for the bank, the staff and their union representatives. Notwithstanding this position, my officials do obviously take an active interest in how the bank's cost base evolves to ensure that the State's interest as shareholder are protected and to ensure that the Government's remuneration policy is enforced.
The bank has previously indicated that as part of its restructuring plan to reduce costs and increase efficiencies, outsourcing of certain functions would be considered in consultation with unions and affected staff. I have also been informed by the bank that there have been no compulsory redundancies as a result of its recent outsourcing activities. Any staff who transfer under outsourcing arrangements transfer under the TUPE regulations.
As regards the current industrial relations climate in AIB, I hold no particular views on the matter though would reiterate that I am pleased with the progress that the bank has made in returning to profitability which is down to the good work performed by both the staff and management in recent times. As always I would encourage both sides to work together to resolve any difficulties that might arise, such that AIB can continue to prosper and repay the taxpayer for their substantial support.
32. Deputy Denis Naughten asked the Minister for Finance the discussions he has held within international banking sector regarding the possibility of expanding operations to Carrick-on-Shannon, County Leitrim; and if he will make a statement on the matter. [4608/15]
Amharc ar fhreagraAs I am sure the Deputy will be aware, I have been informed by Minister of State Harris that he met with Cathaoirleach and CEO of Leitrim County Council in November regarding the MBNA closure, there were also EI and IDA representatives present.
Minister of State Harris, in his role regarding international banking, is currently developing an International Financial Services Strategy. A key feature of this revised Strategy will be the focus on building employment in regions outside of Dublin and the Minister of State will continue to work closely with the state agencies, EI and the IDA, to support their initiatives.
33. Deputy Sean Fleming asked the Minister for Finance his views on whether the National Asset Management Agency is providing adequate support for the provision of social housing; and if he will make a statement on the matter. [4676/15]
Amharc ar fhreagraNAMA has made significant numbers of housing units available through the Housing Agency to local authorities and approved housing bodies for social housing. As the Deputy is aware, NAMA was established primarily in order to acquire property and related loans from five financial institutions so as to remove this systemic risk to the Irish banking system and secondly, to obtain the best achievable financial return to the State from these acquired loans. It is not, as such, part of NAMA's statutory remit to supply housing. However, consistent with its overall commercial objectives, NAMA is making a very significant contribution in facilitating the delivery of social housing. It has made 5,753 houses and apartments available to local authorities and approved housing bodies for social housing and has invested over €20m to date in delivering homes for social housing in those cases where local authorities have confirmed demand.
The Deputy may not appreciate that NAMA has no role in terms of determining the take-up of properties that it has made available for social housing as this is a matter for local authorities. Local authorities, through the auspices of the Housing Agency, have confirmed demand for 2,214 of the properties made available by NAMA. The remaining properties made available by NAMA were ultimately deemed unsuitable by local authorities based on criteria such as their location and on wider planning and housing policy considerations or they were sold or rented by their owners or appointed receivers during the time taken by local authorities to assess and confirm their suitability.
Of the 2,214 properties for which demand has been confirmed, 1,068 have already been delivered for social housing through a combination of purchase and long-term leasing arrangements. NAMA expects that the other units for which demand has been confirmed will be delivered in 2015 on the basis that local authorities and approved housing bodies contract to purchase or lease the properties.
For the Deputy's information, once demand is confirmed by local authorities through the Housing Agency and contracts have been entered into by local authorities or approved housing bodies, NAMA immediately makes the properties available. This often involves significant investment by NAMA to complete building works and to carry out other work in order to resolve compliance issues in relation to planning conditions, regulatory standards and multi-unit Development requirements. NAMA is facilitating the delivery of homes for individuals and families through this very welcome initiative.
The Deputy may also be aware that NAMA has established a special purpose vehicle, National Asset Residential Property Services Ltd. (NARPS), to expedite the delivery of social housing under this initiative. Through NARPS, NAMA acquires houses and apartments from debtors and receivers and directly leases them to approved housing bodies under long-term leasing arrangements. In conjunction with the establishment of NARPS, NAMA has introduced standardised leasing terms to further streamline the process.
NARPS has proven to be a very effective method of delivery and NAMA recently announced its intention to provide future Part V housing on NAMA-funded residential developments through this mechanism. This is a very important initiative, which will mean that NAMA will bear the upfront capital cost of delivering Part V housing on estates that it funds and that such housing will be delivered on site in line with Government policy aimed at ensuring greater integration in housing.
I am confident that NAMA, within the context of its overriding commercial objective, has done everything it can do to facilitate the delivery of social housing to Local Authorities and approved housing bodies through the existing residential stock securing its loans and it has clearly signalled its commitment to doing likewise through its funding for new residential development.
34. Deputy Bernard J. Durkan asked the Minister for Finance the extent to which he can influence lending institutions particularly those that have acquired loan books from original lenders to give particular preferential and sympathetic treatment to family home owners, especially those who continue to make payments to the best of their ability during the economic downturn and keeping in mind the fact that such institutions have acquired the said loan books at a considerable reduction of face value; and if he will make a statement on the matter. [4664/15]
Amharc ar fhreagraThe lending institutions, including those which have acquired loan books, are independent commercial entities. However, the Deputy will be aware that Second Stage of the Consumer Protection (Regulation of Credit Servicing Firms) Bill 2015 will be taken in the Dáil today and tomorrow (4 and 5 February).
The purpose of this legislation is to protect consumers whose loans are sold by regulated financial service providers to unregulated firms. It will address concerns surrounding the continued applicability of the Central Bank's codes and access for borrowers to the Financial Services Ombudsman after loan books are sold.
This legislation will ensure that borrowers retain their existing protections when their loan is sold. A key element of this is the protection of distressed borrowers. The Code of Conduct on Mortgage Arrears (CCMA) was revised in 2013 to strengthen consumer protections, where necessary, and to ensure that the Code is facilitating the resolution of each case in a fair, sustainable and transparent manner.
The CCMA is a statutory Code issued under Section 117 of the Central Bank Act 1989. The CCMA's consumer protection framework ensures that borrowers struggling to keep up mortgage repayments are treated in a fair and transparent manner by their lender, and that long term resolution is sought by lenders with each of their borrowers. Under the CCMA, borrowers have the right to appeal to the lender's Appeals Board if they are not happy with the alternative repayment arrangement offered or where a lender declines to offer an alternative repayment arrangement, or if they believe they have been wrongly classified as not co-operating. The CCMA provides that such an appeal must be considered by personnel who have not been previously involved in the case.
35. Deputy Peadar Tóibín asked the Minister for Finance the action he will take to offset the negative impact of Ulster Bank branch and sub-office closures on the local banking system here. [4692/15]
Amharc ar fhreagraThe Deputy will be aware that the issue of branch closures by Ulster Bank was raised in the Dáil on Thursday 22 January. The full text of the debate is available on the Oireachtas website.
As I said then, this is a commercial and operational matter for the Ulster Bank, a wholly-owned subsidiary of the Royal Bank of Scotland group, and it would not be appropriate for me as Minister for Finance to become directly involved in the number of branches that the bank may decide to close or the selection of which branches are to close.
However I would welcome further exploration by Ulster Bank of ways to offset the impact on the local banking system, including a possible arrangement with An Post to provide alternative services for the people in towns from which it is withdrawing banking services.
36. Deputy Clare Daly asked the Minister for Finance the discussions he has had with the Department of the Environment, Community and Local Government in relation to simplifying the criteria for the way a home owner can acquire an exemption to the local property tax as a result of having significant pyritic damage, a commitment which he gave during discussions on the Finance Bill 2014. [4698/15]
Amharc ar fhreagraAs I previously advised the Deputy, officials of my Department, together with officials of the Department of Environment, Community & Local Government, are examining the alternatives other than testing that may be available in order to confirm entitlement to a Local Property Tax (LPT) exemption.
My officials continue to examine this issue and how it can be resolved satisfactorily. That may necessitate a change in the relevant provisions of the Finance (Local Property Tax) Act 2012 (as amended) and/or the Finance (Local Property Tax) (Pyrite Exemption) Regulations. When I have made my decision I will communicate it to the Deputy immediately. If it is the case that legislative change is required, I will examine with the Revenue Commissioners the possibilities for applying any changes on an administrative basis, in advance of such legislative changes.
I am conscious that the issue to which the Deputy refers needs to be addressed. I want to reassure her, and homeowners affected, that the situation is receiving attention, and I thank her for bringing the issue to my attention again.
37. Deputy Ruth Coppinger asked the Minister for Finance the position regarding the extension of the artist tax exemption to non-resident artists; and if he will make a statement on the matter. [47011/14]
Amharc ar fhreagraAs the Deputy is aware, in the recent Budget I announced the extension of the artists' exemption to artists who are resident or ordinarily resident and domiciled in one or more EU Member States, or in another EEA state, and not resident elsewhere.
The EU Commission had raised concerns that, without this inclusion, the scheme could be in contravention of the Treaty on the Functioning of the European Union by restricting the freedom of establishment of an individual. The Commission were of the belief that the requirement of the exemption that a claimant be resident solely in Ireland discriminated against residents in other Member States. As a result, I decided to amend the scheme to ensure that it is compatible with EU law. It is anticipated that this amendment is likely to have little or no impact on the cost of the scheme to the Exchequer.
Artists who are resident in other EU Member States and who have produced works within one of the qualifying categories set out in the Guidelines on the operation of the scheme, will be able to apply to the Revenue Commissioners for the exemption and, providing their work meets the criteria for the scheme, will be eligible for the exemption. However, the exemption will only be of benefit to those artists who are liable to income tax in Ireland. The exemption will not apply in their home country.
38. Deputy Michael McGrath asked the Minister for Finance if he will provide an update in relation to the special liquidation of Irish Bank Resolution Corporation; when the special liquidation process will be fully completed; if he will provide an estimate, based on currently available information and any return to the State from the special liquidation; and if he will make a statement on the matter. [4671/15]
Amharc ar fhreagraThe Special Liquidators continue to implement the orderly and efficient wind down of Irish Bank Resolution Corporation Limited (in Special Liquidation) in accordance with the provisions of the IBRC Act and the instructions issued by the Minister for Finance under the IBRC Act 2013.
As the Deputy is aware, for operational reasons, the loan assets of IBRC were divided into six portfolios: Evergreen, Sand, Rock, Salt, Stone and Pebble. In total, there were 15,734 Borrower Groups comprising 24,632 loans for sale across the 6 portfolios.
In April 2014, the Special Liquidators announced that this initial loan sales process had concluded. The sales process of the IBRC loan assets, including their segmentation to meet demand from international buyers, delivered a very positive result with over 90% of the loan assets (with a par value of €21.7bn) being sold.
As it became apparent that the expected proceeds to be raised from the sale of the IBRC loan assets were to be sufficient to fully repay the IBRC debt to NAMA, I, as Minister for Finance, instructed that NAMA were no longer obliged to purchase the unsold IBRC assets at their independent valuation as previously envisaged.
Since that instruction, the Special Liquidators have undertaken further sales processes in respect of unsold assets so as to maximise the return to all remaining creditors of IBRC, including the State.
Following representations received from borrowers and the independent advice received, the final loan assets were split into two portfolios: Pearl (into two tranches) and Quartz (initially split into six tranches, but subsequently consolidated into five tranches). Pearl comprised the unsold residential mortgage loan assets and Quartz comprised mostly commercial real estate loan assets.
The sale of the Pearl portfolio was contracted prior to 31st December 2014. The sale of tranche 1 of Pearl has since completed with the sale of tranche 2 of Pearl to complete before 28th February 2015. The five tranches of the Quartz portfolio were contracted for sale prior to 31st December 2014 with the sale of four of these tranches now complete. The sale of the final tranche is due to complete this Friday, 6th February 2015.
The Special Liquidators have published advertisements and written to those known creditors in order to finalise their claims in the liquidation. Creditors in the UK and Ireland have until 31st March 2015 to submit their claims and those creditors in the US have until 31st May 2015. Once all claims have been submitted, they will be reviewed in detail and adjudicated on by the Special Liquidators. In order to finalise this process, further information may be sought from some creditors in order to validate their claim.
It will be some time before the Special Liquidators will be in a position to advise on the likely dividends to be payable to creditors (including the State) given:
1. The early stage in the creditor adjudication process;
2. The other contingent liabilities that may crystallise from litigation; and
3. The future receipts from the sale of the remaining assets.
39. Deputy Paul Murphy asked the Minister for Finance his views on the failure of AIB to honour an agreement on pensions with EBS staff; and if he will make a statement on the matter. [4695/15]
Amharc ar fhreagraAs the Deputy will be aware under the Relationship Frameworks the State does not intervene in the day to day operations of the banks or their management decisions regarding commercial matters and hence any discussions around pensions and other staff related issues are a matter for the bank, the staff and their union representatives.
I have been informed that the bank is not aware of any current issue with their pension agreements. I understand that following negotiations last year a future funding plan was put in place for the EBS staff pension and this was agreed with the scheme trustees. The plan brings the EBS pension scheme in line with the main AIB scheme and ensures future funding.
40. Deputy Peadar Tóibín asked the Minister for Finance the actions he will take to ensure that mortgage holders who are in distress who are proactively engaging with banks to resolve their problems receive a fair outcome. [4691/15]
Amharc ar fhreagraThe Central Bank's Code of Conduct on Mortgage Arrears (the CCMA) is a statutory Code issued under Section 117 of the Central Bank Act 1989 and lenders are required to comply with the CCMA as a matter of law.
The CCMA sets out requirements for mortgage lenders dealing with borrowers facing or in arrears on a mortgage which is secured on a primary home and provides a strong consumer protection framework to ensure that borrowers struggling to keep up mortgage repayments are treated in a fair and transparent manner by their lender, and that long term resolution is sought by lenders with each of their borrowers.
The CCMA sets out the framework that lenders must use when dealing with borrowers in mortgage arrears or in pre-arrears. This framework is known as the Mortgage Arrears Resolution Process (MARP) which sets set out the steps which lenders must follow:
Step 1: Communicate with borrower;
Step 2: Gather financial information;
Step 3: Assess the borrower's circumstances; and
Step 4: Propose a resolution.
The CCMA provides an integrated and cohesive package of consumer protection measures and it seeks to deliver on the following principles, to:
- ensure appropriate resolution of each borrower's arrears situation;
- ensure that lenders deal with borrowers in a fair and transparent manner;
- support and facilitate meaningful engagement between lenders and borrowers; and
- ensure borrower awareness of the benefits of co-operating with their lender, and the consequences of not co-operating.
The Central Bank has advised that, where a borrower believes that their lender has not complied with or in any way disregarded the Code of Conduct on Mortgage Arrears, he/she may make a complaint to their lender. The lender must seek to resolve the borrower's complaint in line with the complaints handling process set out in provisions 10.7 to 10.12 of the Central Bank's Consumer Protection Code.
Each lender must also have an appeals process in place to enable a borrower to appeal in relation to a decision of the lender, including:
1. Where an alternative repayment arrangement is offered by a lender and the borrower is not willing to enter into the alternative repayment arrangement;
2. Where a lender declines to offer an alternative repayment arrangement to a borrower; and
3. Where a lender classifies a borrower as not co-operating.
For this purpose, each lender must establish an Appeals Board to consider and determine any such appeals submitted by borrowers.
If the borrower remains dissatisfied following the outcome from the complaints or appeals process, he/she may then refer the matter to the Financial Services Ombudsman who deals independently with unresolved complaints from consumers about their individual dealings with all financial service providers.
41. Deputy Bernard J. Durkan asked the Minister for Finance the extent to which he expects the economy in this country to be affected by a change in economic priorities in Greece or knock-on effect in other eurozone countries; if he is satisfied that this country has made sufficient economic progress to withstand any likely changes; and if he will make a statement on the matter. [4663/15]
Amharc ar fhreagraThe new Greek Government has only just assumed office and is therefore still formulating its policies.
So there remains some uncertainty regarding the likely path that the new Government will take. This uncertainty has been associated with financial market volatility in Greece, with a decline in equity prices and a sharp spike in bond yields.
Having said that, markets appear to be treating Greece as an outlier rather than a source of contagion. The reforms implemented during the crisis including economic governance reform, progress towards banking union and the establishment of the European Stability Mechanism appear to have reduced the likelihood that turmoil in Greece will spread to other peripheral economies.
In terms of the exchange rate, while the euro has depreciated significantly against the dollar, this is largely the result of the easing of monetary policy in the euro area (quantitative easing) as well as expectations of a gradual tightening of monetary policy in the US this year.
So, at this stage, the investment community sees Greece as an outlier, which suggests that the enhanced European architecture is working.
In terms of Ireland, we have made significant progress in recent years. We have successfully exited the EU/IMF programme and we have the fastest growing economy in Europe, with an increase of around 85,000 in the total number at work since the low point.
Our debt-to-GDP ratio is now on a declining path. Indeed, our net debt level - at 91 per cent of GDP at the end of last year - means that we are in a relatively healthy position, which is evident from the fact that we can borrow at record low interest rates.
In the most recent Budget we were in a position to invest in public services and to reduce the tax burden on individuals for the first time since the crisis began. So we are making real progress.
The Irish people have made major sacrifices to achieve this economic and financial stability and this must not be taken for granted. This Government will continue to act prudently to ensure this remains the case.
42. Deputy Thomas P. Broughan asked the Minister for Finance if he will report on the Revenue Commissioners' compliance programme regarding the transfer of pensions funds off-shore; and if an audit of overseas pension transfers has taken place at banks in majority or minority public ownership. [4609/15]
Amharc ar fhreagraI am advised by the Revenue Commissioners that their legal obligation not to divulge taxpayer information precludes them from providing the specific details the Deputy has requested.
However, the Revenue Commissioners inform me that they are engaged in a compliance program that involves visits to pension providers, pension administrators and pension trustees in relation to the transfer of pension funds off-shore. The purpose of this program is to ensure that the consequences of any transfer of pension funds off shore do not contravene tax legislation. This compliance program is ongoing.
I am further informed by the Revenue Commissioners that moving pension funds off-shore in an effort to circumvent the requirements of Irish tax legislation may fall foul of the conditions under which the pension scheme was approved by the Revenue Commissioners as an exempt approved scheme or the conditions under which a PRSA product received Revenue approval. This could result in the withdrawal of the approval of an occupational pension scheme in accordance with the provisions of section 772(5) of the Taxes Consolidation Act (TCA) 1997 or the withdrawal of the approval of the PRSA product under section 787K (3) and (4) TCA 1997. Any such withdrawal of approval could trigger significant tax liabilities on the sums moved off shore and the withdrawal or claw back of tax reliefs. Moreover, in such cases and depending on the circumstances and the motivation of the individual concerned the possibility also arises that such transactions may also fall foul of the legislation designed to counter tax avoidance transactions.
43. Deputy Terence Flanagan asked the Minister for Finance his plans for winding down the National Asset Management Agency and for making it more accountable; and if he will make a statement on the matter. [4703/15]
Amharc ar fhreagraI am advised that the NAMA Chief Executive, in his opening address to the Public Accounts Committee on 18 December 2014, stated that NAMA is aiming to redeem a cumulative 80% (€24 billion) of its senior debt by the end of 2016 and that it hopes that it will have redeemed all of it by the end of 2018. He stated that those targets were predicated on conditions in the Irish market remaining favourable and on NAMA being in a position to retain sufficient specialist staff to enable it to generate the optimal financial return from the realisation of its residual loan portfolio.
The Deputy may be aware that the NAMA Board has also undertaken to facilitate the timely and coherent delivery of key Grade A office space, retail and residential space within the Dublin Docklands strategic development zone and Dublin's Central Business District and to maximise the delivery of residential housing units in areas of most need. Given that these commitments were agreed with NAMA only in July 2014, it is too early to speculate as what date in the future NAMA will have made sufficient progress on its objectives as to warrant consideration of its dissolution.
As regards accountability, it is important to point out that NAMA is already subject to a high level of public accountability compared to other commercial bodies, including commercial bodies in the State sector.
Its Annual Report and Financial Statements are laid before the Houses of the Oireachtas. In addition, NAMA is also required to submit to me an Annual Statement by 30 September each year setting out its proposed objectives for the following financial year, the scope of activities to be undertaken, its strategies and policies and its proposed use of resources.
NAMA is also required to report to me on a quarterly basis giving detailed information about its loans, its financing arrangements and its income and expenditure. These reports, which also include other information specified under Section 55 of the NAMA Act, track progress on a quarterly basis. I am obliged to lay such reports before the Oireachtas and I endeavour to do so on a timely basis.
The Chairman and Chief Executive are also accountable to the Committee of Public Accounts (PAC) and other Oireachtas committees and to give evidence to those committees whenever required to do so. Furthermore, there have been numerous Parliamentary Questions addressed to me on NAMA-related issues and the associated replies are on the Oireachtas record.
NAMA's accounts are comprehensively audited by the Comptroller and Auditor General, who has a permanent team of officers based in the Agency with unrestricted access to all its records and files. If there is concern about a specific aspect of NAMA's work, it is within the power of the Comptroller and Auditor General to scrutinise any aspect of it. The Comptroller and Auditor General has already produced three special reports on NAMA's activities and they have been broadly positive in their assessment of how NAMA is managing its complex business.
Against this backdrop, I do not accept that there is a need to make NAMA more accountable than is already the case.
44. Deputy Micheál Martin asked the Minister for Finance the position regarding the decision made at the EU Council meeting in December 2014 regarding the €500 million disbursement to Ukraine; and if he will make a statement on the matter. [4303/15]
Amharc ar fhreagraOn 3 December 2014, €500 million was disbursed to Ukraine as the final part of the EU's €1 billion Macro-Financial Assistance programme (MFA II). The first package (MFA I) amounted to €610 million.
On 18 December 2014, the European Council stated that "the Union and its Member States stand ready to further facilitate and support Ukraine's reform process, together with other donors and in line with IMF conditionality".
On foot of a request for further financial assistance made in the latter part of last year and the economic situation in Ukraine, the Commission put forward a proposal on 8 January this year for a third MFA programme of up to €1.8 billion to be disbursed over this year and next in the form of medium-term loans. This proposal, which is for co-decision with the European Parliament, is currently being considered by the Council.
45. Deputy Gerry Adams asked the Minister for Finance if he will report on his meeting with the managing director of the IMF, Christine Lagarde; and if he will make a statement on the matter. [4298/15]
Amharc ar fhreagraThe Managing Director of the IMF, Christine Lagarde, visited Dublin on 19 January to attend a conference organised by the IMF together with the Central Bank of Ireland and the Centre for Economic Policy Research on Ireland lessons learned from its Recovery from the Bank Sovereign Loop.
I participated in a high level discussion panel at the conference along with Ms Christine Lagarde, Mr Valdis Dombrovskis, Vice President of the European Commission and Mr Benoît Coeuré, a member of the Executive Board of the ECB. The panel discussion was open to the media and live-streamed.
Minister Howlin and I also met with Ms Lagarde earlier in the day. We gave a joint press conference after the meeting. The meeting did not have a formal agenda. However, we used the opportunity to brief her on developments in the Irish economy and the outlook for the period ahead. Our discussions also touched on EU and international economic and financial developments.
46. Deputy Charlie McConalogue asked the Tánaiste and Minister for Social Protection if she is introducing a new community employment health care training and development programme for community employment participants in the health sector; when this new scheme will commence; if all those participants who are currently employed on a community employment scheme within this sector will have the opportunity to apply for a place on the new scheme; and if she will make a statement on the matter. [5040/15]
Amharc ar fhreagraThe Department will begin the process of rolling out a new Health and Social Care Programme for CE participants during the course of this year. The programme will ensure that participants have adequate access to qualifications in the health and social care sector in order to take up employment opportunities in this area and to support local service delivery. The Department has been consulting with key stakeholders and service providers in this sector in preparation for the roll-out of the programme, and this will continue. On-going support will be provided to the CE Sponsoring Organisations who manage these schemes throughout the process.
The main consideration in determining this approach is to ensure that all CE participants who are working directly with service users in the health and social care sector are adequately trained and receive the appropriate supervision that pertains to this sector.
47. Deputy Michael Healy-Rae asked the Tánaiste and Minister for Social Protection the position regarding a carer's allowance appeal in respect of a person (details supplied) in County Kerry; and if she will make a statement on the matter. [5071/15]
Amharc ar fhreagraThe Social Welfare Appeals Office has advised me that an appeal by the person concerned was registered in that office on 28 January 2015. It is a statutory requirement of the appeals process that the relevant Departmental papers and comments by the Deciding Officer on the grounds of appeal be sought. When these papers have been received from the Department, the case in question will be referred to an Appeals Officer who will make a summary decision on the appeal based on the documentary evidence presented or, if required, hold an oral appeal hearing.
The Social Welfare Appeals Office functions independently of the Minister for Social Protection and of the Department and is responsible for determining appeals against decisions in relation to social welfare entitlements.
48. Deputy Michael McGrath asked the Tánaiste and Minister for Social Protection the position regarding self-employed persons who wish to employ their spouse and pay the normal class A PRSI; and if she will make a statement on the matter. [5144/15]
Amharc ar fhreagraUnder social welfare legislation, the social insurance status of spouses working in a family business can vary.
Spouses who are engaged in a business partnership are treated as individual self-employed contributors who are each liable to pay social insurance contributions. In addition spouses, who assist in the business of their self-employed spouse /civil partner performing the same or ancillary tasks and are not a business partner or an employee, can be regarded as a self-employed contributor in their own right.
Alternatively, where a family business is incorporated as a limited company, spouses involved in the business pay PRSI contributions either as employees or as self-employed contributors depending on whether a contract of service exists. In addition where a person is an employee of a partnership in which their spouse/civil partner is a partner, he/she pays PRSI contributions as an employee.
Otherwise, a person employed directly by his/her spouse is not liable to pay PRSI, as this is regarded as an “excepted employment" under social welfare legislation which recognises the practical difficulties in establishing the existence of a genuine employment relationship in such circumstances.
49. Deputy John O'Mahony asked the Tánaiste and Minister for Social Protection when a person (details supplied) in County Mayo will receive their domiciliary care allowance; and if she will make a statement on the matter. [5153/15]
Amharc ar fhreagraThe person concerned was notified on 2 February 2015 that her domiciliary care allowance application was successful and that the allowance has been awarded from 1st December 2014. The first payment of the allowance, along with arrears due, will issue on 17 February 2015.
50. Deputy Michael Creed asked the Tánaiste and Minister for Social Protection the position regarding entitlement to payment of pro-rata contributory pensions where the applicant does not meet the full 520 contribution requirement; and if she will make a statement on the matter. [5165/15]
Amharc ar fhreagraThe State pension contributory is a very valuable benefit and is the bedrock of the Irish pension system. Therefore, it is important to ensure that those qualifying have made a sustained contribution to the Social Insurance Fund over their working lives. To ensure that the individual can maximise their entitlement to a State pension, all contributions paid over their working life from when they first enter insurable employment until pension age are taken into account when assessing their entitlement and the level of that entitlement.
To qualify for a state pension (contributory) a person must –
* have at least 520 paid contributions and
* satisfy a yearly average condition (a yearly average of 48 contributions paid or credited is required for a full rate State pension (contributory), and reduced rates of payment may be payable for pensioners with lower averages).
Once over 16 years of age, the date a person enters into insurable employment is the date used for averaging purposes.
A mixed insurance pro rata State pension is one of a number of qualifying methods introduced to ensure that as many people as possible qualify for a State pension contributory. This was introduced in 1991 and was designed to ensure that people who have contributed to the social insurance system at different rates receive a pension which reflects the proportion of full rate contributions which exists in their overall insurance record.
This pension is calculated by taking the total number of contributions (modified and full rate) a person has paid over their working life and applying the average contributions test to arrive at the rate which would be paid if all contributions were at the full rate. The actual rate to be paid is determined by the proportion of full rate contributions in the overall record. A similar arrangement applies when calculating pensions due under EU regulations or bilateral social security agreements.
For those with insufficient contributions to meet the requirements for a State pension (contributory), they may qualify for a means tested State pension (non-contributory), the maximum personal rate for which is €219.
51. Deputy Willie O'Dea asked the Minister for Finance his views on whether the assertion of the Pensions Ombudsman to the Joint Committee on Finance, Public Expenditure and Reform that the imposition of a 0.6% levy on private sector pension schemes in 2011 was legal but not necessarily fair; and that Government statements at the time of the levy’s introduction, to the effect that employers could be requested or required by trustees to meet the costs of the charge, were never going to be right; and if he will make a statement on the matter. [5062/15]
Amharc ar fhreagra54. Deputy Micheál Martin asked the Minister for Finance his response to the statement of the Pensions Ombudsman given to the Joint Oireachtas Committee on Finance and Public Expenditure that the imposition of a 0.6% levy on private sector pension schemes in 2011 was legal but not necessarily fair; and that Government statements at the time of the levy’s introduction, to the effect that employers could be requested or required by trustees to meet the costs of the charge, were never going to be right; that most trustees of pension funds felt that they had no choice but to reduce the pensions already in payment to pensioners as, otherwise, the full brunt of the levy would be borne by future pensioners, either active members or those with deferred or preserved benefits, and that in most cases, the effect of the reduction in payment would last for the lifetime of the pensioner; and if he will make a statement on the matter. [5061/15]
Amharc ar fhreagraI propose to take Questions Nos. 51 and 54 together.
The pension fund levy is not a levy on pensions but is a stamp duty charge that applies to the market value, on the valuation date, of assets under management in pension funds and pension plans approved under Irish tax legislation. The levy was introduced in 2011 to fund the Jobs Initiative and has applied at a rate of 0.6% for the years 2011 to 2013, at an aggregate rate of 0.75% for 2014 and will apply at a reduced rate of 0.15% for this year. In accordance with the provisions in section 125B of the Stamp Duties Consolidation Act 1999 (SDCA), the stamp duty levy on pension fund assets will end after 2015.
The chargeable persons for the levy are the trustees or other persons (including insurance companies) responsible for the management of the assets of the pension schemes or plans. The payment of the levy is treated as a necessary expense of a pension scheme and the trustees or insurer, as appropriate, are entitled where needed to adjust current or prospective benefits payable under a scheme to take account of the levy. It is up to the trustees to decide whether and how the levy should be passed on and who should be impacted and to what extent, given the particular circumstances of the pension schemes for which they are responsible.
While I would expect that, in carrying out their responsibilities in this matter, pension scheme trustees would examine all the options open to them regarding how to deal with the impact of the levy, including an approach to the employer sponsors of the scheme, neither I or the Government made any statement to the effect that employers would be required to meet the cost of the levy.
I have no detailed information on the decisions made by pension fund trustees or others in relation to the passing on of the full or a partial impact of the levy to the current, deferred or former (retired) members of pension schemes. I am aware, however, that in certain cases where trustees have made the decision to pass on the impact or part of the impact of the levy to pensioners, that a smaller reduction in pension payments over the lifetime of the pension have been made in preference to a larger reduction over a shorter period.
The pension fund legislation includes safeguards aimed at ensuring that benefits payable, either currently or prospectively to any member, are adjusted in such a way that the reduction in value of those benefits shall not exceed the relevant percentage (0.6%, 0.75% or 0.15%, as appropriate) of the market value of the assets accounting for the scheme's liabilities to that member.
The Revenue Commissioners are afforded oversight authority to review, where they consider it appropriate, instances where benefits are adjusted as a result of the payment of the levy to ensure that any such adjustment is in keeping with the requirements of the levy legislation. In undertaking any such review Revenue may consult with appropriate experts as they see fit. However, before Revenue could act in that regard, instances of concern on foot of actual adjustments would first have to be brought formally to its attention.
Finally, while I am very conscious of the sacrifices that Irish taxpayers, generally, have been required to make over the past number of years, the fact is that without the pension fund levy there would not have been the Job Initiative measures such as the reduced VAT rate of 9% and other measures which have been very successful in helping to create employment and protect employment in this economy.
52. Deputy Clare Daly asked the Minister for Finance his views regarding whether it is appropriate that the Revenue Commissioners would deduct the tax credits of a person (details supplied) in County Dublin because the person did not pay enough tax in 1998, despite the fact that they had got balancing statements for all of the subsequent years. [5057/15]
Amharc ar fhreagraI am informed by the Revenue Commissioners that following direct engagement from the person concerned and having regard to all of the circumstances, an amended certificate of tax credits issued to him on 30 January 2015 reflecting the full tax credits to which he is entitled.
53. Deputy Michael McGrath asked the Minister for Finance the final yield from the 0.75% pension fund levy in 2014; the way this compared to the projected yield at budget time; and if he will make a statement on the matter. [5059/15]
Amharc ar fhreagraI am informed by the Revenue Commissioners that final receipts in 2014 from the Stamp Duty levy on pension fund assets, introduced in the Finance (No.2) Act 2011, are €743 million. The forecast yield for 2014 was €675 million.
55. Deputy Michael McGrath asked the Minister for Finance if the National Asset Management Agency has a finder's fee arrangement in place with certain debtors who are in control of retail or office units for securing new tenants; if the agency provides any incentive to such debtors for identifying or securing new tenants for their vacant units; if so, the way this incentive works; the number of cases where such an incentive has been extended; the total monetary amount of any such incentive; if he will provide any other relevant information; and if he will make a statement on the matter. [5135/15]
Amharc ar fhreagraI am advised by NAMA that there are no such finder fee arrangements in place. In order to meet their obligations to NAMA, debtors are required to actively manage assets which form part of NAMA's security so as to optimise their realised value. This includes the collection of rents and service charges, arrangements for letting of vacant units and the operation of rent reviews to ensure that rental and occupancy is maximised.
56. Deputy Sean Fleming asked the Minister for Finance if an arrangement for the repayment of arrears of tax in respect of a person (details supplied) in County Laois will be continued to allow the business to continue to operate; and if he will make a statement on the matter. [5163/15]
Amharc ar fhreagraI am advised by Revenue that, where possible, it always seeks to work with businesses that are experiencing temporary cash-flow difficulties in preference to deploying debt collection/enforcement measures to secure outstanding taxes. However, such discussions require open and committed engagement to identify mutually acceptable solutions and are predicated on a business being viable and capable of meeting future tax obligations in a timely manner.
The business to which the Deputy refers has been afforded numerous chances over the last number of years to regularise its tax affairs but has consistently failed to meet the agreed terms of the various arrangements and continues to have a very poor tax compliance record.
The most recent phased payment plan was agreed with the business in October 2014 and Revenue has assured me that it has not cancelled the arrangement.
Revenue has in fact tried to maintain the arrangement even though the terms of the agreement have again not been adhered to by the business. In this regard, Revenue has confirmed to me that to date it has not deployed any enforcement sanctions against the business.
If the business now wishes to further discuss the issues with Revenue, it should immediately contact Jane O'Brien at telephone number 061 488270 or email jobrie01@revenue.ie.
57. Deputy Bernard J. Durkan asked the Minister for Finance the extent to which this economy continues to remain competitive when compared to other competing jurisdictions within the EU and without; and if he will make a statement on the matter. [5166/15]
Amharc ar fhreagraSubstantial progress has been made in terms of improving Ireland's competitiveness in recent years.
There has been a significant improvement in Ireland's economy-wide cost competitiveness. The European Commission in its autumn forecasts estimated that real unit labour costs in Ireland fell by 4.3 per cent annually in 2014, which is the largest decline across all EU Member States and compares with a fall of 1.2 per cent in the UK, and increases of 0.1 per cent in the EU, 0.2 per cent in the US and 0.3 per cent in the euro over the same time period. Competitiveness has been achieved through wage moderation as compared with our trading partners as well as productivity improvements.
Relatively low consumer price inflation over the last five years has meant that Irish price levels have fallen considerably relative to our euro area peers. For instance, annual HICP inflation in Ireland has been below that of the euro area average for every year since 2009. HICP inflation turned negative in December, largely due to a fall in oil prices, nonetheless core inflation (which excludes energy and unprocessed food) was also weak.
In this regard, the ECB's recent quantitative easing announcement is to be welcomed. The Irish economy should benefit through a number of channels. For example, the economy should benefit directly through improved financing conditions for households and firms. In addition, the euro area is Ireland's single largest export destination; therefore, by supporting real economic activity and raising inflation in the euro area this will underpin export growth in Ireland.
Monetary policy also works through the exchange rate channel the recent depreciation of the euro will provide a boost to Irish exports.
58. Deputy Bernard J. Durkan asked the Minister for Finance the extent to which he and his Department continues to monitor the situation in regard to mortgage arrears, with particular reference to the need to ensure that home owners who have fallen into arrears, through no fault of their own, are not unfairly treated; and if he will make a statement on the matter. [5167/15]
Amharc ar fhreagraThe Government's Strategy to address the problem of mortgage arrears is overseen by the Construction 2020, Housing Planning and Mortgage Arrears Cabinet sub-committee, chaired by the Taoiseach. The strategy was formulated in response to the recommendations of the Keane Report (2011) and the main elements of it are:
- Engagement with the banks to develop appropriate measures for their customers in mortgage arrears;
- Personal insolvency law reform and implementation;
- Mortgage to rent; and
- A Mortgage Advisory function.
The Strategy is working as evidenced by the monthly improvements in the mortgage restructures data collected by my Department officials. The situation at end November shows that total mortgage accounts in arrears (all arrears 1 day past due) now stand at 91,963. The number of Principal Dwelling Home accounts in arrears of greater than 90 days and not restructured has fallen by almost 27% at end of November 2014 when compared to the state of play at end of August 2013. During November 2014 there was an increase of 2,551 permanent mortgage restructures over the previous month. The number of mortgage accounts in arrears of greater than 90 days continues to fall, decreasing by 1,879 to 64,196 accounts at the end of November 2014.
Additionally, the Central Bank's Code of Conduct on Mortgage Arrears (CCMA) sets out requirements for mortgage lenders dealing with borrowers facing or in mortgage arrears on their primary residence. The CCMA provides a strong consumer protection framework to ensure that borrowers struggling to keep up mortgage repayments are treated in a fair and transparent manner by their lender, and that long term resolution is sought by lenders with each of their borrowers. The CCMA includes an appeals process which enables a dissatisfied borrower to request that their case be examined by senior personnel who were not previously involved in the case.
Monitoring compliance with the CCMA continues to be an important part of the Central Bank's work programme and I have been informed that the Central Bank commenced a themed inspection of compliance with the CCMA in Q4 2014. The scope of the themed inspection includes on-site inspections of a number of regulated mortgage lenders to examine the processes and controls relating to compliance with certain provisions of the CCMA.
59. Deputy Bernard J. Durkan asked the Minister for Finance the extent to which he and his Department continue to monitor the levels of bank charges being imposed by various banks; the basis for such charges, nationally and internationally; and if he will make a statement on the matter. [5168/15]
Amharc ar fhreagraAll credit institutions in Ireland are independent commercial entities. 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. The Central Bank may direct the institution not to impose the new or increased charge or it may approve the charge, or approve it at a lower level than requested by the institution. Once approved, the bank is entitled to impose the charge.
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. Among the key findings of the review was that while fee and commission income has become a more important source of income to the banks in recent years, net fee and commission income in Irish banks was well below the average of their European peers.
The European Communities (Payment Services) Regulations 2009 (the Payment Services Regulations) include requirements for banks and other payment institutions to provide information to the consumer about charges, interest and exchange rates on the accounts and these are reflected in the Central Bank's Consumer Protection Code 2012, which contains requirements in relation to the provision of information on charges to consumers. The website of the Competition and Consumer Protection Commission (CCPC) also lists the various charges imposed by the various financial institutions in Ireland for different types of transactions - www.consumerhelp.ie.
Irish financial institutions have varying models for charges and have different regimes and conditions under which they are willing to grant transaction free banking. Individuals use of their bank account will be specific to each individual and I would strongly encourage people to look at this comparison site with their specific circumstances in mind in order to decide which institution offers the best product for their pattern of account usage.
60. Deputy Bernard J. Durkan asked the Minister for Finance the degree to which his Department monitors the activities of unregulated purchasers of loan books; if he is satisfied that such third parties are operating in accordance with best practice; and if he will make a statement on the matter. [5169/15]
Amharc ar fhreagraI understand that most purchasers of loan books have stated they are voluntarily complying with the Codes. Of course voluntary compliance is not enforceable. In order to ensure that consumers maintain these protections, the Government committed in March 2014 to bringing forward legislation to protect consumers whose loans are sold to unregulated entities.
The Consumer Protection (Regulation of Credit Servicing Firms) Bill 2015 was published in January and is scheduled for second stage in the Dail today and tomorrow (4 and 5 February). The Bill was prepared following a public consultation process in July and August of last year which sought the views of interested parties. In total nineteen submissions were received from a range of respondents including the financial services industry, consumer groups, public representatives, individuals and other stakeholders.
This important piece of legislation will ensure that borrowers whose loans are sold by a regulated entity to a currently unregulated entity maintain the same protections as they had prior to the sale. This includes the various Central Bank Codes, such as the Code of Conduct on Mortgage Arrears. Subject to the legislative programme, it is expected that the Bill will go through the Houses of the Oireachtas in the early part of 2015.
61. Deputy Bernard J. Durkan asked the Minister for Finance the extent to which he remains satisfied that all economic indicators remain positive and if so the likely benefit arising therefrom now and in the future; and if he will make a statement on the matter. [5170/15]
Amharc ar fhreagraFollowing the successful conclusion of the EU-IMF programme, the Irish economy has emerged from the crisis and economic recovery is now well established. The latest available data for 2014 show that GDP growth for the first three quarters of the year is broadly in line with my Department's forecast at Budget time.
According to recent figures published by the European Commission, it expects Ireland to be the fastest growing economy in Europe in 2014 and 2015. Importantly, domestic demand is making a positive contribution to growth for the first time since the crisis began. Consumer spending has been strong in 2014 with retail sales up over 6 per cent compared with 2013. Core sales (excluding motor trades) were up close to 4 per cent in 2014. Investment in building and construction as well as in machinery and equipment spending are on a rising path.
Exports rose by 15.5 per cent in the year to the third quarter of 2014. This was the fastest rate of expansion since 2001. Recovery is perhaps most clearly evident in the labour market with employment having increased in each of the last eight quarters to the third quarter 2014, representing an increase of over 80,000 jobs since the low-point in mid-2012. In line with this, the standardised unemployment rate stood at 10.6 per cent in December, having fallen from a peak of 15.1 per cent in early 2012.
Macroeconomic forecasts for the years 2014 to 2018 were presented by my Department on Budget Day, last October. These forecasts see GDP growth of 4.7 per cent in 2014 and 3.9 per cent this year. This growth is driven by a positive contribution from net exports on the back of growth in Ireland's trading partners. Domestic demand is set to contribute to growth as well, with growing employment and rising household incomes resulting in an increase in private consumption over the period. Over the medium term, GDP growth of about 3½ per cent a year is anticipated.
Notwithstanding the current improvement, risks to the outlook remain. These relate to the low inflation observed in many advanced economies, geo-political tensions as well as the underperformance of the euro area economy.
In terms of the public finances, policy measures implemented by the Government have resulted in a decline in the deficit in recent years. This decline has been in a phased manner, consistent with the dual needs of supporting domestic activity as well as repairing the public finances. All of the interim deficit ceilings under the Excessive Deficit Procedure have been met and Ireland is firmly on track to achieve a deficit of below 3 per cent this year. This has been important in restoring Ireland's credibility in the international markets, and bond yields have fallen substantially since the highs of mid-2011. The debt ratio has peaked and is now on a downward path. After 2015, fiscal policy will be set in line with the requirement to move towards Ireland's medium-term budgetary objective, which is for a balanced budget in structural terms.
