Written Answers Nos. 251-268
251. Deputy Pearse Doherty asked the Tánaiste and Minister for Social Protection if she will consider providing a travel allowance for participants on the Gateway scheme who are living in a rural area and cannot avail of a bus service; and if she will make a statement on the matter. [12177/15]
Amharc ar fhreagraGateway is part of a suite of interventions funded by the Department that are designed to meet the priorities established by Government in Pathways to Work. It provides short-term, quality work opportunities with local authorities for those who are long-term unemployed.
A person in receipt of jobseeker's payment is required to take up reasonable offers of work or training in order to retain entitlement to that payment. Local Authorities have been advised to be flexible with regard to placements and, where possible, to seek to ensure persons are placed within their local area. While there is no provision for a travel allowance for participants on the Gateway scheme, that does not preclude local authorities from making arrangements to support participants to engage in work by providing transport that is ordinarily available to its existing workforce.
252. Deputy Thomas P. Broughan asked the Minister for Finance if his Department has made any estimate of the cost to the Exchequer and the health budget of the importation and sale of illegal cigarettes into Ireland, allegedly from major American and Chinese companies, for the past three decades. [12171/15]
Amharc ar fhreagraThe Deputy will appreciate that estimating the scale of any illegal activity, and the tax losses to which it gives rise, is difficult and that estimates of such losses need to be viewed with caution.
I am advised by the Revenue Commissioners that the extent of the illegal trade in cigarettes is estimated through annual surveys of smokers that are carried out for them and for the National Tobacco Control Office of the Health Services Executive by Ipsos MRBI. Assuming that the illicit cigarettes consumed displaced the equivalent full tax paid quantities of cigarettes, the results of these surveys suggest that the losses to the Exchequer in excise duty and VAT were of the order of €210 million in 2013. This figure represents a significant reduction on the estimates for the years 2009 to 2012 where the estimate of losses were between €240 and €260. The figures for 2014 are not yet available.
Matters relating to the health costs associated with tobacco consumption are the responsibility of my colleague the Minister for Health.
253. Deputy Maureen O'Sullivan asked the Minister for Finance if he will report on tax expenditures enjoyed specifically or primarily by credit unions; the aggregate value of these; the rationale for each; the estimated loss to the dormant accounts fund arising from the exemption afforded to the credit union movement from legislation in respect of dormant accounts generally; and if he will make a statement on the matter. [11070/15]
Amharc ar fhreagraI am advised by the Revenue Commissioners that, other than the exemption from Corporation Tax in section 219A of the Taxes Consolidation Act 1997 which is applicable to credit unions that are registered or deemed to be registered under the Credit Union Act 1997, there are no tax expenditures or reliefs available specifically or primarily to credit unions.
I am further advised by Revenue that there are no costings available in relation to this exemption from tax.
The Dormant Accounts Act, 2001 (as amended), provides for accounts in credit institutions to be transferred to the Dormant Accounts Fund when an account has been dormant for 15 years. Credit unions are currently not subject to the dormant accounts legislation. Accordingly, accounts in credit unions that have not been reclaimed by the owners for at least 15 years are not transferred to the Dormant Accounts Fund.
The Credit Union Act, 1997 (as amended) does not make reference to Dormant Accounts. Dormant accounts in credit unions, and the practices surrounding them, are governed by Rule 22 of the Standard Rules for Credit Unions published by the Irish League of Credit Unions. There are no costings available as to the estimated loss to the Dormant Accounts Fund as a result of credit unions not being subject to the dormant accounts legislation.
254. Deputy Pat Deering asked the Minister for Finance his views on including artisan food producers in the 9% value-added tax category, as they contribute significantly to the tourism industry and such a reduction would make their produce more saleable. [11104/15]
Amharc ar fhreagraI am advised by the Revenue Commissioners that VAT law in Ireland must comply with the EU VAT Directive. The rating of a food product for VAT purposes is based on the VAT legislation rather than on the description of the product. The majority of food products, whether artisan produced or not, are already liable at the zero rate of VAT. Food products can only benefit from the zero rating in accordance with 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. Settled case law requires that such exemptions be strictly interpreted and narrowly applied so as not to create or increase divergence of VAT treatment in the EU Member States.
255. Deputy Lucinda Creighton asked the Minister for Finance if he shares the concerns of the Central Bank of Ireland that the insurance industry is taking on excessive losses in order to compete for new motor insurance customers; if he envisages tighter regulations or legislative changes that will be required to correct this; and if he will make a statement on the matter. [11193/15]
Amharc ar fhreagraI am aware that the Central Bank is reported to have raised a concern that intense competition between insurers may be driving down premium prices to levels that may not be viable. The status of this report is unclear. My Department is in correspondence with the Central Bank to clarify their views.
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 and the price at which it is offered is a commercial matter for insurance companies and is based on a proper assessment of the risks they are accepting and the making of adequate provisioning to meet these risks.
The EU framework for insurance expressly prohibits Member States adopting provisions requiring the prior approval or systematic notification of certain matters including general and special policy conditions and scales of premiums. Furthermore, in the context of non-life insurance, the EU framework provides non-life insurers with the freedom to set premiums, as has been acknowledged in case law by the European Court of Justice (Case C-518/06).
While price competition is to be welcomed in a functioning competitive market, it is important that it is based on a sustainable business model and is not at the expense of the prudential soundness of insurance companies nor at the expense of consumer protection. It is the role of the Central Bank, as regulator, to ensure that this is the case. This includes the power to insist on adequate reserves.
The Central Bank is responsible for the authorisation and prudential supervision of insurance undertakings authorised in Ireland. The Central Bank of Ireland also has responsibilities in relation to:
- Branch establishments of European Economic Area (EEA) authorised Non-Life Insurance undertakings
- EEA authorised Non-Life Insurance undertakings conducting business by way of services
- Third country branch establishments i.e. a branch of an insurance undertaking whose head office is locates outside the EEA
The powers of the Central Bank of Ireland have been enhanced significantly in recent years to ensure that it can bring certainty to the financial position of any firms of concern and to undertake any early intervention measures it considers appropriate.
256. Deputy Pearse Doherty asked the Minister for Finance if he will provide a list of each measure that contributes to the value-added tax policy gap; the cost of each measure; and if he will make a statement on the matter. [11219/15]
Amharc ar fhreagraThe Value Added Tax policy gap measures the additional revenues that could in principle be collected if a uniform rate (i.e. the standard rate, which is 23% in Ireland) applied to all consumption, thereby eliminating the effects of reduced rates and exemptions.
Ireland operates a number of reduced VAT rates and exemptions which influence the size of Ireland's VAT policy gap. In this regard, VAT in Ireland is not purely treated as a revenue collecting mechanism. Ireland's VAT rate structure has clear social (e.g. 0% on food etc.) and economic (e.g. 9% on tourism related activities) goals which are in line with the EU VAT Directive.
The cost associated with abolishing exemptions and reduced rates of VAT would depend on the level at which the standard rate is fixed. At present the standard rate is 23%. However, it would in theory be possible to significantly reduce the VAT policy gap on a revenue neutral basis - e.g. the Tax Strategy Group paper on VAT prepared in advance of Budget 2015 (available on the Department's website at http://finance.gov.ie/sites/default/files/14.04%20Selective%20VAT%20Issues.pdf) estimated that a standard rate of 15% (the lowest level permitted under the VAT Directive) could be achieved on a broadly revenue neutral basis by merging the zero, 9%, 13.5% and 23% rates. However, this would involve applying VAT to food, children's clothes and oral medicines as well as raising the VAT rate on a range of other areas of consumption such as fuel and hospitality services.
The cost of maintaining zero and reduced rates in the context of leaving the standard rate at its current level of 23% is set out below. This is a straight line calculation and takes no account of changes to spending behaviours. Zero rate items - €2 billion; 9% - €1.8 billion; 13.5% - €2.3 billion.
Costings related to exempted services such as transport, education and charities are not available.
257. Deputy Pearse Doherty asked the Minister for Finance if he will provide a list of all environmentally related fiscal measures; the revenue raised by each one; and if he will make a statement on the matter. [11221/15]
Amharc ar fhreagraI assume that the Deputy is referring to revenue raising fiscal measures which are designed to reduce the emissions of greenhouses gases such as carbon dioxide, and whose chargeable basis or rates are set with reference to greenhouse gas emissions.
The carbon tax, which applies to fossil fuels at a rate of €20 per tonne of carbon dioxide emitted, raised €385.4 million in 2014.
Vehicle Registration Tax (VRT) is applied to vehicles on their first registration in the State. Since 1st July 2008 VRT on passengers cars has been determined on the basis of the carbon dioxide emissions of the car. VRT raised €542.1 million 2014.
In addition, the rate of motor tax on passenger cars is determined on the basis of the carbon dioxide emissions of the car in respect of new cars registered from 1 July 2008. As the Deputy is aware, motor tax is a matter for my colleague, the Minister for the Environment, Community and Local Government, with the revenues raised going towards the Local Government Fund.
258. Deputy Willie O'Dea asked the Minister for Finance his views on the stated intention of the Bank of Ireland to pay dividends to its shareholders in the second half of 2016, in view of the facts that it consistently refuses to write off any secured debt for bonuses, that it repossessed 200 family homes in 2014, that it forced the sale of another 500, that it is increasing its application for repossessions and that it forced its subsidiaries' bondholders, including credit unions, to settle for as little as 1% of the value of their securities; and if he will make a statement on the matter. [11389/15]
Amharc ar fhreagraThe Deputy will be aware that I, in my role as Minister for Finance, have no direct function in the relationship between the banks and their customers. I have no statutory function in relation to the banking decisions made by individual lending institutions at any particular time and these are taken by the board and management of the relevant institution.
Notwithstanding the State's shareholdings in the banks, I must ensure that the banks are run on a commercial, cost effective and independent basis to ensure their value as an asset to the State. A Relationship Framework has been specified that defines the nature of the relationship between the Minister for Finance and each bank. These Frameworks were published on 30 March 2012 and can be found at http://banking.finance.gov.ie/presentations-and-latest-documents.
However from a general policy perspective, the approach of the Government is to support people in genuine mortgage arrears and where feasible, to put in place a sustainable restructure to address and resolve such a difficulty. This is clearly set out in the Code of Conduct on Mortgage Arrears where it requires a lender in respect of a cooperating borrower to explore all of the options for an alternative repayment arrangement offered by that lender and that a lender must document its consideration of each option examined and the reasons why the options offered/not offered to the borrower are/are not appropriate and sustainable.
If a solution cannot be agreed between borrower and lender, or if it is agreed that a mortgage restructure is not a sustainable solution, there are alternative mechanisms available to allow a debtor remain in the house in appropriate cases. For example, the Mortgage to Rent scheme is available in cases where the house and household would be appropriate and eligible for social housing. Where the borrower and lender cannot agree on a sustainable mortgage restructure, the debtor has the option to formulate and propose a PIA to his/her secured and other creditor(s). This initiative rests solely with the debtor and in formulating a PIA, a personal insolvency practitioner is under an onus, insofar as is reasonably practicable, to formulate the proposal on terms that will not require the debtor to dispose of an interest in or cease to occupy a principal private residence.
I also note, BOI's focus on the resolution of Irish mortgage and business related loans, by agreeing suitable and sustainable solutions, and the progress the bank has made in this regard. In its 2014 annual report, BOI has stated that more than nine out of ten of its challenged owner occupied mortgage customers in Ireland with restructuring arrangements are meeting the agreed repayments. It is also worth noting that BOI met the targets set by the CBI in relation to addressing mortgage arrears.
At the time of announcing its 2014 full-year results, Bank of Ireland management stated that it was prioritising the capital it was generating to facilitate the de-recognition of the 2009 preference shares. The remaining 2009 preference shares stand at €1.3bn. Furthermore, management has stated that following de-recognition of the preference shares its ambition is to progress to payment of dividends.
Notwithstanding the fact that management has indicated that the accelerated pace of the bank's capital build has ensured that it is firmly on track to de-recognise the 2009 preference shares in 2016, it will be some time before there is clarity around the robustness of the bank's capital position which would allow such a de-recognition to take place and subsequently the commencement of dividends. In addition the SSM, as regulator, would have to satisfy itself, at the appropriate time, as to the bank's dividend capacity in the context of its overall capital position. Accordingly, I am not willing to speculate on how any plan the bank has in relation to dividends might evolve.
259. Deputy Michael McGrath asked the Minister for Finance the number of private dwelling home repossession cases that were before the courts on 31 December 2013 and 31 December 2014; and if he will make a statement on the matter. [11417/15]
Amharc ar fhreagra260. Deputy Michael McGrath asked the Minister for Finance the number of court orders that had been made but not yet enforced in respect of private dwelling home repossession cases as of 31 December 2013 and 31 December 2014; and if he will make a statement on the matter. [11418/15]
Amharc ar fhreagraI propose to take Questions Nos. 259 and 260 together.
While the Courts Service operates as an independent corporate organisation, primary responsibility for reporting on matters before the Courts, including home repossession cases, lies with the Department of Justice and Equality. We have asked that Department to source the data on repossession cases from the Courts Service and to forward it directly to you.
261. Deputy Fergus O'Dowd asked the Minister for Finance if an official will contact a person (details supplied) in County Louth regarding a matter in relation to the universal social charge; and if he will make a statement on the matter. [11436/15]
Amharc ar fhreagraThe Universal Social Charge was introduced by Section 3(1)(a) of the Finance Act 2011 and applies to specified income received on and after 1st January 2011. The charge is determined by the date the relevant income is received as distinct from when it was earned.
I am advised by the Revenue Commissioner that the person concerned received arrears of pay in 2012 in respect of the years 1992 to 2001. The arrears of pay is subject to the Universal Social Charge. There have been a number of contacts between the person concerned and Revenue and the position has been fully explained on each occasion.
262. Deputy Michael McGrath asked the Minister for Finance further to Parliamentary Question No. 76 of 26 February 2015, the number of National Asset Management Agency debtors, in respect of whom debt write-downs have been made, who make up the €0.3 billion write-down; the largest of these write-downs; and if he will make a statement on the matter. [11439/15]
Amharc ar fhreagraMy response to Parliamentary Question No. 76 of 26 February 2015 stated that of the 109 debtor connections that have reached a final agreement with NAMA, 62 relate to debtor connections whose loans were sold and 47 relate to debtor connections where NAMA has concluded a final settlement agreement directly with the debtor connections resulting in no remaining par debt being owed to NAMA. The response further stated that, as at 30 September 2014, the total amount of debt compromised or written off by NAMA as part of such final settlement agreements is €0.3 billion.
I am advised that par debt was ultimately compromised or written off as part of 23 of the 47 debtor connections where NAMA has concluded a final settlement agreeement. The total amount of €0.3bn debt compromised or written off by NAMA relates to these 23 debtor connections.
The disclosure of the individual debtors involved and the details of any such debt compromise is considered commercially sensitive information in the context of NAMA's ongoing engagement with its remaining debtor connections.
263. Deputy Michael McGrath asked the Minister for Finance the amount of dated subordinated debt by covered institution redeemed, that is repaid, during the period of the Credit Institutions (Financial Support) Scheme 2008 from 30 September 2008 to 30 September 2010, inclusive. [11454/15]
Amharc ar fhreagraI have received the following information from the relevant institutions.
AIB
The only transaction involving dated subordinated debt from 30 September 2008 to 30 September 2010 was an exchange that was transacted in March 2010. This involved the exchange of €2,211m dated subordinated debt. Consideration of €1,768m of replacement dated subordinated debt notes was given. The replacement instruments were carried on AIB's books at a fair value with a premium to the par value, impacting on the capital gain to AIB.
Bank of Ireland
Please refer to the following pages of the Bank of Ireland Group Report and Accounts as available on the Group's website:
- 31 March 2009: See note 35 on pages 161, 163
- 31 December 2009: See note 9 on page 189 and note 39 on pages 218, 220
- 31 December 2010: See note 9 on pages 233, 236 and note 41 on pages 265, 267
PTSB
PTSB did not repay any dated subordinated debt between 30th September 2008 and 30th September 2010.
IBRC
The Special Liquidators note that the information requested pre dated their appointment, however from information and records available: Anglo: Bonds with a nominal value of €388m were redeemed at a price of 55% of par via a liability management exercise; and INBS: Bonds with a nominal value of €267m were exchanged for €147m of newly issued dated subordinated notes via a liability management exercise.
264. Deputy Dan Neville asked the Minister for Finance his views on a matter (details supplied) regarding concessions in respect of persons with disabilities who are purchasing a new vehicle; and if he will make a statement on the matter. [11458/15]
Amharc ar fhreagraThe Disabled Drivers and Disabled Passengers (Tax Concessions) Scheme provides relief from VAT and VRT (up to a certain limit) on the purchase of an adapted car for transport of a person with specific severe and permanent physical disabilities, assistance with fuel costs, and an exemption from Motor Tax.
In respect of drivers with disabilities, Regulation 8(1)(d) of the Disabled Drivers and Disabled Passengers (Tax Concessions) Regulations 1994 (S.I. 353 of 1994) provides that repayment or remission of VRT and VAT may only be provided in respect of a motor vehicle with an engine whose capacity is not greater than 2,000 cubic centimetres. In respect of passengers with disabilities, Regulation 10(1)(c) of S.I. 353 of 1994 provides that repayment or remission of VRT and VAT may only be provided in respect of a motor vehicle with an engine whose capacity is not greater than 4,000 cubic centimetres.
Regulation 9 of S.I. 353 of 1994 provides that the total amount of VRT and VAT which may be repaid or remitted shall not exceed €9,525 in respect of a driver with a disability.
I am informed by the Revenue Commissioners that the person concerned contacted Revenue recently in relation to the purchase of a new vehicle for a driver with a disability. The vehicle in question exceeds the 2,000 cc limit. Accordingly, the person concerned was advised of the statutory limits in question.
I have also been informed by the Revenue Commissioners that the engine size limit outlined in S.I. 353 of 1994 was not applied in a previous relief application by the person concerned. The Revenue Commissioners have informed me that applications must be processed in accordance with S.I. 353 of 1994 and on that basis the engine size limit cannot be waived.
265. Deputy Patrick O'Donovan asked the Minister for Finance if consideration has been given to the provision of tax relief to families where one of the parents chooses to stay at home to care for children, in an effort to meet increased child care costs; and if he will make a statement on the matter. [11499/15]
Amharc ar fhreagraWhen the system of individualisation was introduced in the tax code in 1999, a home carer allowance was also introduced to compensate those who chose to stay at home to care for children rather than participate in the labour market.
The Home Carer Tax Credit can be claimed by a jointly assessed couple in a marriage or civil partnership, where one spouse or civil partner is the Home Carer and cares for one or more dependent persons. It is currently worth €810 and in effect it shelters €4,050 from income tax.
Additionally, jointly assessed couples can transfer €9,000 of their individual standard rate band to their spouse or civil partner to suit their circumstances. This allows married one earners couples to pay a maximum rate of 20% income tax on earnings up to €42,800. This was increased from €41,800 in Budget 2015.
It would be inappropriate for me to become involved in speculation on this matter so far in advance of the Budget, which is over seven months away. However, as part of the normal budgetary preparations, my officials will be examining potential options for changes to the tax system for my consideration as part of the overall Budget package.
266. Deputy Thomas P. Broughan asked the Minister for Finance the current level of debt per capita of gross national product, and the way this compares with the similar current figures of debt per capita of gross national product for Greece. [11555/15]
Amharc ar fhreagraAt the end of 20131, the general government debt per capita figures were €46,950 for Ireland and €28,848 for Greece while the comparable Gross National Income (GNI) per capita figures were €32,391 and €16,486 for Ireland and Greece respectively. These equate to a debt to GNI percentage of 144.9% for Ireland and 175.0% for Greece.
It should be noted that Gross National Product (GNP) is not available for Greece on the Eurostat database. Therefore, for comparative purposes, the closely related Gross National Income (GNI) has been utilised. GNI is found by adjusting GNP for EU taxes and subsidies and is also a key measure used in the calculation of EU budget contributions from Member States.
Debt to GDP is a more commonly used indicator. In Ireland's case, as set out in the Budget documentation last October, the debt to GDP percentage for the of 2013 was 123.3% and the CSO have reported that the percentage stood at 114.8% as the end of the third quarter 2014. End 2014 figures will be available next month.
1All the data was sourced from Eurostat, 2013 is the most recent period for which official annual figures are published and the population figures for 2013 used to calculate the per capita figures are provisional.
267. Deputy Pearse Doherty asked the Minister for Finance the number of customers who are still due a refund from a mis-sold payment protection insurance scheme; and if he will make a statement on the matter. [11660/15]
Amharc ar fhreagraThe Central Bank Review of the Sale of Payment Protection Insurance on 11 credit institutions was reported on in March 2014. Since then one further institution has made refunds to PPI customers.
I am informed by the Central Bank that all customers identified for refunds under the reviews were written to and made offers of refunds. If any PPI customer considers that they should have been offered a refund of PPI premiums, or have a complaint in relation to how the product was sold, they should contact the entity that sold the product.
268. Deputy Pearse Doherty asked the Minister for Finance the number of persons who applied for the recently announced appointment at the Irish Fiscal Advisory Council; the selection process; his involvement in it; and if he will make a statement on the matter. [11662/15]
Amharc ar fhreagraAn open selection process for the recent appointment of a Member of the Irish Fiscal Advisory Council was undertaken in accordance with the "Guidelines for appointments to state boards" published by the Government in November 2014. The vacancy was advertised on Stateboards.ie and the process was managed by the Public Appointments Service (PAS).
The advertisement, which requested expressions of interest from qualified candidates, attracted six applications. PAS convened an assement panel to examine the applications. The panel recommended to the PAS that four candidates were deemed to meet the published criteria. These were submitted by the PAS for my consideration, following which I appointed Dr Íde Kearney as a Member of the Irish Fiscal Advisory Council.
