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Thursday, 19 Feb 2015

Written Answers Nos. 58-65

Labour Activation Measures

Ceisteanna (58)

Joanna Tuffy

Ceist:

58. Deputy Joanna Tuffy asked the Tánaiste and Minister for Social Protection the amount spent on labour market activation over the past five years, in tabular form; the number of participants; and if she will make a statement on the matter. [7600/15]

Amharc ar fhreagra

Freagraí scríofa

The data requested by the Deputy is currently being compiled and will be forwarded to her as soon as it is available.

Departmental Properties

Ceisteanna (59)

Joanna Tuffy

Ceist:

59. Deputy Joanna Tuffy asked the Tánaiste and Minister for Social Protection her plans for Intreo offices in Dublin mid west constituency (details supplied); and if she will make a statement on the matter. [7601/15]

Amharc ar fhreagra

Freagraí scríofa

As part of the plan for the roll-out of Intreo Centres, the Lucan/Adamstown and Clondalkin areas have been designated by the Department for the provision of Intreo services in Dublin Mid West.

The Office of Public Works has been exploring options in both Lucan and Adamstown for an Intreo Centre, but given the limited choice of suitably sized and located offices, complex property and development issues, and third party interests, this process is taking longer than expected. The Department is anxious to see the Intreo service delivered in the area within a reasonable timeframe.

Works are currently ongoing in Clondalkin where Intreo services will be provided from both the existing Local Office and the former Motor Tax Office. These works are expected to be completed by the end of March/early April 2015.

Departmental Investigations

Ceisteanna (60)

Terence Flanagan

Ceist:

60. Deputy Terence Flanagan asked the Tánaiste and Minister for Social Protection if her Department will carry out an investigation of the management of the IASS pension fund in recent years; and if she will make a statement on the matter. [7619/15]

Amharc ar fhreagra

Freagraí scríofa

Defined benefit pension schemes in Ireland are, in general, set up under trust law. The trustees of such pension schemes have a fiduciary duty to act in the best interest of all scheme members. In addition, the Pensions Act, 1990 provides for the regulation of occupational pension schemes and Personal Retirement Savings Accounts. The Pensions Act sets down clearly the duties and responsibilities of the trustee of a pension scheme. Section 18 of the Pensions Act provides that the Pensions Authority has the power to investigate the state and conduct of a pension scheme. Accordingly, I would advise that you formally bring any concerns you have about the management of the IASS pension fund to the attention of the Pensions Authority, which can be contacted at http://www.pensionsauthority.ie/en/Contact_us/

Pension Provisions

Ceisteanna (61)

Terence Flanagan

Ceist:

61. Deputy Terence Flanagan asked the Tánaiste and Minister for Social Protection her plans to increase the State pension (contributory) and the State pension (non-contributory); and if she will make a statement on the matter. [7623/15]

Amharc ar fhreagra

Freagraí scríofa

State pensions account for the single largest block of social welfare expenditure, and while expenditure on pensions is increasing because of demographic pressures, this is being successfully managed within the overall welfare budget. This year, the Department of Social Protection will spend an estimated €6.675 billion on pensions – 34.4% of all welfare expenditure and an increase of €168 million over 2014.

In Budget 2015, the Government increased payments for certain pensioners by increasing the rate of the Living Alone Allowance in Budget 2015 to €9.00. This increases the maximum personal rate of the State non-contributory pension for a qualified person living alone to €228 per week, and the maximum rate for the State contributory pension to €239.30, when both the basic pension and the allowance are taken into account.

In addition I was pleased to restore a partial Christmas bonus last December, benefitting over 575,000 pensioners, at a cost of over €31 million, and 1.23 million welfare recipients in total.

As with these changes, any future decision to increase the rate of the State pension would have budgetary consequences and would have to be considered in the context of budget negotiations.

Question No. 62 withdrawn

Insurance Costs

Ceisteanna (63)

Noel Grealish

Ceist:

63. Deputy Noel Grealish asked the Minister for Finance the steps he will take to stop the practice of Irish emigrants returning home being forced to pay exorbitant prices for car insurance because their no claims bonuses have expired after just two years, even if they have had an impeccable driving record while away; and if he will make a statement on the matter. [7412/15]

Amharc ar fhreagra

Freagraí scríofa

In my role as Minister for Finance I have responsibility for the development of the legal framework governing financial regulation.  Neither I nor the Central Bank of Ireland, as regulator, interfere in the pricing of insurance products. The provision of insurance cover, the price at which it is offered and the expiring of no claims discounts is a commercial matter for insurance companies and is based on an assessment of the risks they are accepting and adequate provisioning to meet these risks. These are considered on a case by case basis.  Article 25 of S.I.  No. 359/1994  European Communities (Non-Life Insurance) Framework Regulations, 1994 expressly prevents the Central Bank from requiring the prior approval of the pricing, or terms and conditions of an insurance product. Consequently, I am not in a position to direct insurance companies to provide home insurance cover to specific individuals.  

I contacted Insurance Ireland in relation to this matter and they have informed me that in general terms where there has been no motor insurance in an individual s name and there is a gap of cover of two years or more since their last insurance, the no claims discount is deemed invalid and that in the case of a returning emigrant the same principle would apply. However, Insurance Ireland have further informed me that if the individual can produce confirmation that they have been continually insured and are claims free in their own name whilst they were away this would be taken into consideration.  

Insurance Ireland operates a free Insurance Information Service for those who have queries, complaints or difficulties in relation to obtaining insurance. Their service can be contacted at (01) 676 1914 or by email at iis@insuranceireland.eu .

Tax Code

Ceisteanna (64)

Michael Healy-Rae

Ceist:

64. Deputy Michael Healy-Rae asked the Minister for Finance his views on correspondence (details supplied) regarding an income tax amnesty; and if he will make a statement on the matter. [7643/15]

Amharc ar fhreagra

Freagraí scríofa

The query is with regard to a proposal for an income tax incentive for young farmers starting up farming. In Budget 2015, myself and my colleague Minister Coveney published an Agri-Tax Review, overseen by a working group made up of the Department of Finance, the Department of Agriculture, Food and the Marine, and the Revenue Commissioners. This review examined agri-taxation measures and made recommendations to ensure resources were directed towards activities of maximum benefit to this sector. It also aimed to ensure tax policy was aligned with the objectives set out in Food Harvest 2020, and analyse the benefits of various tax measures versus the costs.

The Review included an independent cost benefit analysis, an international benchmarking exercise and a public consultation process. A number of recommendations were made by the working group to maximise the potential of the primary agriculture sector, and as appropriate, most of these were legislated for through the Finance Act 2014. These included measures to increase the mobility and productive use of land, to assist succession and to complement wider agriculture policies and schemes.

In addition to the taxation measures which are exclusively aimed at the farming community, I would also highlight that farmers are eligible to take part in the Start Your Own Business (SYOB) scheme, introduced by the Finance (No. 2) Act 2013, which provides for relief from Income Tax for long term unemployed individuals who start their own new unincorporated business. The scheme provides an exemption from Income Tax up to a maximum of €40,000 per annum for a period of two years to individuals who set up a qualifying business having been unemployed for a period of at least 12 months prior to starting the business. The relief is available from the 25 October 2013 to 31 December 2016 and may be claimed on the return of income filed with the Revenue Commissioners. 

Taking all these elements into consideration, I am not minded to consider the proposal made here.

VAT Payments

Ceisteanna (65)

Brendan Griffin

Ceist:

65. Deputy Brendan Griffin asked the Minister for Finance if he will initiate a full review of Ireland's VAT system in view of the inconsistencies that exist throughout the system, where some essential items carry the top rate, and some luxury items carry a lower rate; if he will provide the most up-to-date list of zero rated, 9% rated, 13.5% rated and 23% rated products and services; and if he will make a statement on the matter. [7523/15]

Amharc ar fhreagra

Freagraí scríofa

I am advised by the Revenue Commissioners that the VAT rating of goods and services is subject to the requirements of the EU VAT Directive with which Irish VAT law must comply. The Directive provides that all goods and services are liable to VAT at the standard rate, currently 23% in Ireland, unless there is a provision in the Directive that permits a lower rate. Settled case law of the Court of Justice of the European Union (CJEU) requires that the limited circumstances in which rates other than the standard rate are used be strictly interpreted and narrowly applied so as not to create or increase divergence of VAT treatment in the EU Member States. These limited circumstances are set out in the Schedules of the Value-Added Tax Consolidation Act 2010

Schedule 1 of the Value-Added Tax Consolidation Act 2010 lists activities that are exempt from VAT and in respect of which the supplier has no entitlement to deduct input VAT. Schedule 2 lists supplies that are liable at the zero rate and in respect of which the supplier has an entitlement to deduct input VAT. Schedule 2 includes international services, human and animal oral medicines, children's clothing and footwear, books and a range of food and drink items. The range of food products that can benefit from the zero rating is constrained by Article 110 of the VAT Directive which permits the retention of the zero rate for "clearly defined social reasons" where the products were liable to VAT at the zero rate on 1 January 1991.

Schedule 3 lists the goods and services that are liable to VAT at the reduced rates of 9% and 13.5%. The goods and services currently liable to VAT at the 9% rate are ones listed in Annex III of the VAT Directive and Ireland was permitted under Article 113 of the Directive to apply a rate lower than 12% to these goods and services. The goods and services liable to VAT at the 13.5% rate are ones that are not listed in Annex III, but in respect of which Ireland is permitted under Article 118 to retain a reduced rate. The goods and services to which the 9% rate applies include the supply of food and drink (excluding alcohol, soft drinks and bottled water) in the course of catering

- hot take-away food and hot drinks

- hotel lettings, including guesthouses, caravan parks, camping sites etc.

- admissions to cinemas, theatres, certain musical performances, museums, art gallery exhibitions

- amusement services of the kind normally supplied in fairgrounds or amusement parks

- the provision, by a person other than a non-profit making organisation, of facilities for taking part in sport

- printed matter e.g. newspapers, magazines, brochures, leaflets, programmes, maps, catalogues, printed music (excluding books)

- hairdressing services

The goods and services to which the 13.5% rate applies include:

- The supply of gas, electricity, solid fuel and home heating oil

- The supply of new buildings, concrete block and ready to pour concrete

- The supply of photographic services, agricultural services and photographic services

- The hire of cars and boats

- Beauty services such as facials, nail treatments, tanning and sunbed services

The supply of goods and services not listed in the Schedules to the Value-Added Tax Consolidation Act 2010 is liable to VAT at the standard rate. Where a good or service is not specified in the Schedules mentioned then the correct rate is the standard rate. Revenue does have a VAT rates database on its website (http://www.revenue.ie/en/tax/vat/rates/index.jsp ) that lists thousands of product and services types and gives the correct VAT rate by reference to the Schedules.

It is widely recognised that there are anomalies in the rates applying to goods and services and I receive Parliamentary Questions concerning particular anomalies from time to time. Under the VAT Directive the apparent anomalies can generally only be eliminated through applying higher rates to goods and services currently liable at the zero- rate or at one of the reduced rates. I am not planning to undertake such a review at this time.

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