Written Answers Nos. 139-152
139. Deputy Derek Nolan asked the Minister for Finance the number of social houses that were made available by the National Asset Management Agency for County Galway; his plans to allocate more; and if he will make a statement on the matter. [13992/15]
Amharc ar fhreagraNAMA is making a substantial contribution to social housing provision. Under an initiative agreed with the then Minister for the Environment, Community and Local Government in 2012, NAMA has to date made over 6,000 houses and apartments held by its debtors and receivers available for social housing. Local authorities, working through the Housing Agency, have confirmed demand for just over 2,000 of these properties, 1,200 of which have already been delivered through NAMA debtors and receivers or directly through the Agency's social housing SPV, NARPS. NAMA expects that the remaining properties for which demand has been confirmed will be delivered in 2015 on the basis that local authorities and approved housing bodies enter into early contracts to buy or lease the properties.
NAMA has to date provided over €20m in funding to facilitate the delivery of these properties, including funding for the often substantial completion and remediation works that are required and the resolution of compliance issues in relation to planning conditions and regulatory standards.
NAMA advises that it has identified 328 properties as being available and potentially suitable for social housing within the functional areas of Galway city and county councils. The local authorities, through the Housing Agency, have confirmed demand for 247 of these properties, of which 83 have already been delivered. The balance is made up of 12 different transactions which are being progressed through the various stages of delivery, including the completion of substantial construction works and complex conveyancing requirements.
As previously advised, NAMA has no role in terms of determining the suitability of properties that it has made available for social housing. This is a matter for local authorities, through the Housing Agency, which assess suitability on the basis of criteria such as their location and wider planning and housing policies. Where demand has been confirmed, NAMA has worked extremely hard with all stakeholders, including its debtors and receivers, the Housing Agency, local authorities and approved housing bodies, and has provided substantial funding to ensure that the properties are delivered.
Further detail on this initiative can be found at https://www.nama.ie/social-initiatives/social-housing/
140. Deputy Michael McGrath asked the Minister for Finance if he will provide a list, in order of ranking, of the Irish Bank Resolution Corporation's creditor categories; if he will confirm which category of creditors includes credit unions; when interim and final payments are likely to be made by the special liquidator to creditors; and if he will make a statement on the matter. [14002/15]
Amharc ar fhreagraThe Special Liquidators continue to implement an 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 me under that Act.
By February 2015, loans with a par value of €21.7bn had been prepared, brought to market and ultimately sold through a series of sales processes which have delivered a very positive result in maximising the return to the creditors of IBRC, including the State.
As the Special Liquidators maximise the proceeds of the liquidation, it is important that they have a comprehensive view of the creditors who ultimately may be entitled to these proceeds. To this end, 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 had until 31 March 2015 to submit their claims and those creditors in the US have until 31 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.
Following the completion of this process, the Special Liquidators could be in a position to make an interim distribution to creditors later this year, however, it will be some time before the Special Liquidators will be in a position to advise on likely dividends payable, if any, to creditors (including the Exchequer) 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.
The Special Liquidators are unable to comment at this stage both on the level of proceeds that will ultimately be generated from the liquidation and on the level of valid creditor claims that will ultimately be received in respect of the liquidation. It is the balance between the proceeds generated and level of valid claims that will ultimately determine the dividend to which each creditor may be entitled.
For the payment of proceeds from the liquidation, unsecured creditors will rank in priority to the holders of subordinated debt. The priority for the distribution of assets under the Companies Acts is generally:
1. Costs and expenses of the ongoing liquidation;
2. Preferential creditors, including certain taxes and employee and pension claims arising prior to the date of liquidation (these claims are certain to be paid in full);
3. Amounts owing to NAMA under the Facility Deed acquired from the Central Bank which were secured by a floating charge over the bank s assets (these claims have been fully repaid and the floating charge has been released)
4. Unsecured creditors, including:
- Debts owing to the Minister/NTMA under ELG
- Debts owing to the Deposit Guarantee Scheme
- Unguaranteed debt/depositors
Other Unsecured Creditors, including:
- Local authority development bonds
- Credit unions
- Suppliers / other "normal" unsecured creditors
- Employees that are not preferential creditors
- Contingent creditors and other potential costs principally relating to litigation, etc.
- Subordinated creditors
- Members of the company - the Minister currently holds 100% of all shares and preference shares in the company.
141. Deputy Pearse Doherty asked the Minister for Finance the issues he is referring to in the terms of references of the local property tax when he states that a number of issues have arisen in relation to its efficient and effective administration; and if he will make a statement on the matter. [14021/15]
Amharc ar fhreagraWhile the Local Property Tax (LPT) review will primarily have regard to recent residential property price developments, the overall yield from LPT and the desirability of achieving relative stability in LPT payments into the future, it will also address a number of issues which have arisen in relation to the efficient and effective administration of the LPT.
Among such issues would be the operation of the pyrite exemption provisions, which has been raised in this House on numerous occasions, and the operation of the LPT reliefs for those with disabilities, in relation to which some changes have already been put in place on an administrative basis.
As the Deputy is aware I have launched a public consultation, as part of the review, inviting submissions from the public on the operation of LPT. Until such time as the consultation has closed, all submissions have been reviewed and any other matters which may arise during the review process have been addressed, I cannot definitively say, at this stage, whether or what other issues may be included.
As I previously advised the Deputy, any submissions he may wish to make would be more than welcome.
142. Deputy Sandra McLellan asked the Minister for Finance the reason a utility company (details supplied) which offers a discount can apply the value added tax before it deducts the discount; and if he will make a statement on the matter. [14058/15]
Amharc ar fhreagraVAT is a consumption tax, that is, it is a tax that is paid by the final consumer of the good or service. VAT is an EU-wide tax and Irish VAT law must comply with the EU VAT Directives. Section 37(1) of the VAT Consolidation Act 2010 provides that VAT is chargeable on the full consideration which a taxable person becomes entitled to receive in respect of or in relation to a supply of goods or services "including all taxes, commissions, costs and charges whatsoever" but not including the Value-Added Tax itself.
The Revenue Commissioners have advised me that their understanding is that, in general, utility providers offer discounts in two ways. The first is a percentage discount, say 5%, on the standard energy unit price. The discounted price, in this case 95% of the standard energy unit price, is then used to calculate the VAT-inclusive bill amount. In this way the customer does not pay VAT on the 5% discount. The second way is by means of a bill credit or cashback. The bill credit or cashback amount is offset against the VAT-inclusive bill. Take, for example, a customer whose VAT-inclusive bill is €227 made up of €200 plus €27 VAT. If this customer receives a bill credit or cashback of €100 then the customer's bill is only €127. The utility provider accounts for VAT on the VAT-inclusive amount of €127 (VAT-exclusive amount of €112 plus €15 VAT at 13.5% on the €112) being the full consideration which the provider becomes entitled to receive in relation to that supply. The customer's bill credit or cashback of €100 is essentially a VAT-inclusive discount made up of a VAT-exclusive amount of €88 plus €12 VAT at 13.5% on the €100). If this is the practice described by the Deputy then it is in line with VAT legislation.
143. Deputy Brian Stanley asked the Minister for Finance if consideration will be given to the provision of grant aid to voluntary groups who install defibrillators for community use; and that the grant would be equivalent to the 23% value added tax that is charged on the purchase price of defibrillators. [14117/15]
Amharc ar fhreagraThe VAT rating of goods and services is constrained by the requirements of EU VAT law with which Irish VAT law must comply. Defibrillators, other than implantable defibrillators, are liable to VAT at the standard rate of 23%. Parts or accessories and training are also liable to VAT at the standard rate.
There is no provision in the EU VAT Directive that would make it possible to exempt from VAT or apply a zero rate to the supply of defibrillators. Under the VAT (Refund of Tax) (No.15) Order, 1981 it is possible for individuals to obtain repayment of VAT expended on certain goods and appliances which assist persons with a disability to overcome that disability. In this context, a defibrillator purchased by or on behalf of an individual may qualify for a VAT refund.
144. Deputy Thomas P. Broughan asked the Minister for Finance if he will report on the regulation of companies providing life insurance cover; the number of companies providing such cover in the years 2012 to 2014, and in 2015 to date; the number of complaints made to the Financial Services Ombudsman regarding life insurance; and if he will make a statement on the matter. [14131/15]
Amharc ar fhreagraThe day to day responsibility for the regulation and supervision of Irish authorised financial institutions is a matter for the Central Bank of Ireland which is statutorily independent in the exercise of these functions. The Central Bank of Ireland has additional responsibilities in relation to:
- Branch establishments of European Economic Area (EEA) authorised Life Insurance undertakings
- EEA authorised 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 located outside the EEA.
I am advised by the Central Bank that the number of companies regulated by the Central Bank of Ireland and providing life insurance cover is as follows:
|
Year |
Companies regulated by the Central Bank of Ireland |
Branches of EU regulated companies operating in Ireland |
|
2012 |
51 |
5 |
|
2013 |
53 |
8 |
|
2014 |
51 |
8 |
|
2015 |
50 |
8 |
The supervision process for Life Insurance undertakings mirrors the general supervision process of the Central Bank of Ireland. All Irish authorised financial service providers, whether engaged in international or domestic activities, are expected to implement best practice. Undertakings must have systems and policies in place to mitigate risk and monitor compliance with their internal policies. The role of the Central Bank of Ireland involves oversight of the quality of the institution's corporate governance, risk management and internal control systems. Its supervisory process is carried out by way of
- Analysis of returns submitted to the Central Bank of Ireland
- Risk-rating of undertakings
- Themed inspections across the life insurance industry
- Annual review meetings with individual life insurance undertakings
- Regular correspondence and engagement with undertakings under our supervision.
The Central Bank of Ireland is also responsible for consumer protection issues. There are further regulatory requirements in respect of Consumer Protection, Fitness & Probity, Minimum Competency and Conduct of Business.
The full listing of legislation and regulations applicable to insurance supervision and regulation are available on the Central Bank's website at:
http://www.centralbank.ie/regulation/industry-sectors/insurance-companies/life-insurance-companies/Pages/legislation.aspx.
The Central Bank also has a section on its website dedicated to Requirements and Guidance for Life Insurance Undertakings at:
http://www.centralbank.ie/regulation/industry-sectors/insurance-companies/life-insurance-companies/Pages/requirements-guidance.aspx.
The Financial Services Ombudsman is also independent in the carrying out of his duties to investigate, mediate and adjudicate complaints about the conduct of regulated financial service providers. I, as Minister for Finance, have no role in the day to day workings of the office of the Ombudsman or in the decisions which he takes.
The Office of the Financial Services Ombudsman has informed me that 1,111 complaints were made to him regarding life insurance in the years 2012-2014. Figures for 2015 have not yet been published and I am informed that these figures will not be available until January 2016. A breakdown of the number of complaints made by year is set out below:
|
Year |
Product Type |
Cases |
|
2012 |
Life |
451 |
|
2013 |
Life |
407 |
|
2014 |
Life |
253 |
|
Total |
1,111 |
145. Deputy Mattie McGrath asked the Minister for Finance further to Parliamentary Question No. 279 of 31 March 2015, if he will provide the documentation requested (details supplied); and if he will make a statement on the matter. [14151/15]
Amharc ar fhreagraOfficials in my Department have referred the Deputy's question to the Central Bank and have received the following response:
Firms authorised by the Central Bank of Ireland are required at all times to act within the scope of their respective authorisations including any exemptions granted. Any firm found to be acting outside its authorisation schedule will be subject to appropriate regulatory action.
Bank of Ireland Private Banking Limited provides a range of services to its clients in line with its current authorisation schedule, including acting as a deposit/agent broker in accordance with Section 10 of the Investment Intermediaries Act, 1995.
The Central Bank of Ireland is satisfied that Bank of Ireland Private Banking Limited is acting within the scope of its current authorisations and exemptions.
146. Deputy Jack Wall asked the Minister for Finance the position regarding a refund of tax in respect of a person (details supplied) in County Kildare; and if he will make a statement on the matter. [14203/15]
Amharc ar fhreagraI am advised by the Revenue Commissioners that a PAYE Balancing Statement and a refund of tax for 2014 issued to the person concerned on 10 April 2015.
147. Deputy Michael Creed asked the Minister for Finance the number of distressed mortgages on family homes which are held by financial institutions not regulated by the Central Bank of Ireland, but which may be subject to regulation in the United Kingdom; which may have held mortgage protection insurance that has not been activated; which are held by retired persons on pension; and if he will make a statement on the matter. [14273/15]
Amharc ar fhreagraI am informed by the Central Bank of Ireland that its recent Quarterly Bulletin provides disaggregated information on non-bank entities operating in Ireland which includes authorised retail credit firms, as well as entities holding mortgage loans that were previously on the balance sheets of Irish resident banks. A number of these entities are currently unregulated and more details are provided below.
By end-2014, non-bank entities accounted for 5.6% of all outstanding PDH mortgage loans. Further information is available in Box A on page 31 of Q2 2015 Bulletin available at http://www.centralbank.ie/publications/Documents/Quarterly%20Bulletin%20No.%202%202015.pdf.
It is important to note that not all non-bank entities are unregulated firms. Approximately two thirds of non-bank mortgage accounts are with entities authorised by the Central Bank as retail credit firms.
All regulated mortgage lenders, including retail credit firms, are required to comply with the requirements of the Code of Conduct on Mortgage Arrears (CCMA), which sets out the statutory consumer protection provisions that all regulated mortgage lenders must comply with when dealing with distressed borrowers.
The balance of approximately one third of non-bank mortgage accounts is made up of unregulated entities that have acquired mortgage loan books. These firms are not subject to regulation by the Central Bank and are not subject to the provisions of its Codes, such as the CCMA, although many firms have stated that they will voluntarily comply. The Central Bank is unable to comment on firms that may be subject to regulation by the UK Authorities.
It is my intention to 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.
The Consumer Protection (Regulation of Credit Servicing Firms) Bill 2015 will require entities dealing with the consumer to be authorised by the Central Bank and subject to its Codes of Conduct. Dealing with the consumer is credit servicing and the definition of credit servicing is broad. Owners of loan books who deal directly with consumers, that is, who are servicing their own loan books, will be regulated. Otherwise they can have the loan book serviced by a regulated credit servicing firm.
The Bill was published in January and second stage of the Bill was taken in the Dáil on 4 February. Since then, my officials have been in contact with the Central Bank and with the Office of the Attorney General to further progress the legislation. The Bill will continue its progress through the legislative process and I look forward to further discussion of the Bill at Committee Stage.
Neither the Central Bank nor my own Department collect data about the level of distressed mortgages that may have associated payment protection insurance policies that have not been activated. It is also the case that no breakdown is available of the level of distressed mortgages owned by retired persons.
148. Deputy Arthur Spring asked the Minister for Finance the level of oversight and input his Department and the Central Bank of Ireland have in retail banks setting interest rates. [14280/15]
Amharc ar fhreagra158. Deputy Anne Ferris asked the Minister for Finance his plans to empower the Central Bank of Ireland to cap or otherwise control, within a sustainable range, homeowner mortgage interest rates in view of the significantly high rates here compared with elsewhere in Europe, and the effect this is having on household budgets, new lending, the property market, consumer confidence and competitiveness; and if he will make a statement on the matter. [14530/15]
Amharc ar fhreagra169. Deputy Peter Mathews asked the Minister for Finance if he will consider protecting the 300,000 variable rate mortgage holders by lowering the variable rate of interest to 2.5%, which is currently the average rate in the eurozone; and if he will make a statement on the matter. [14605/15]
Amharc ar fhreagraI propose to take Questions Nos. 148, 158 and 169 together.
The lending institutions in Ireland - including those in which the State has a significant shareholding - are independent commercial entities. I have no statutory role in relation to regulated financial institutions setting interest rates. It is a commercial matter for each institution concerned.
Nonetheless, the issue of regulation of interest rates remains a policy area under active review and has been the subject of recent correspondence between the Department of Finance and the Central Bank. The current position is that the Central Bank does not have new proposals for the additional regulation of interest rates.
The Central Bank has responsibility for the regulation and supervision of financial institutions in terms of consumer protection and prudential requirements and for ensuring ongoing compliance with applicable statutory obligations. The Central Bank has no statutory role in the setting of interest rates by regulated entities, apart from the interest rate cap imposed on the credit union sector in accordance with the provisions of the Credit Union Act, 1997 and the requirement to be notified of penalty or surcharge interest imposed in respect of arrears.
As I have stated in previous Parliamentary Questions, a former Deputy Governor indicated that, within its existing powers and through the use of persuasion, the Central Bank would continue to engage with specific lenders which appear to have standard variable rates set disproportionate to their cost of funds and this is a course of action I expect the Central Bank to continually appraise.
The Deputy should be aware that the Governor of the Central Bank, Patrick Honohan, in his opening statement to the Oireachtas Joint Committee on Finance, Public Expenditure and Reform last November stated that in Ireland, as in most advanced economies, it has long been understood that tight administrative control over the rates charged by banks would be counterproductive in ensuring a sufficient flow of properly priced credit on a lasting basis. Such control would strongly discourage new entrants when, in fact, ongoing competition in the banking sector will be crucial in ensuring that the economy is provided with efficient and cost effective banking services. In this regard, there have been some movements on mortgage interest rates of late by a number of institutions which suggest that the market may be entering a new and more competitive phase.
The mortgage interest rates that financial institutions operating in Ireland charge to customers are determined as a result of a commercial decision by the institutions concerned. Each institution determines the rate it charges its customers, depending on a number of factors such as cost of funds and commercial considerations (such as competition, risk pricing and the impact on deposit rates).
Furthermore, the Central Bank (Supervision and Enforcement Act) 2013 introduced changes to Section 149 of the Consumer Credit Act 1995 which regulates fees and charges in order to attract new entrants to the Irish banking sector. There is some evidence of improvements in the banking sector with a number of institutions introducing new products and adapting their business model. In the last 12 months there have been a number of new entrants to the Irish mortgage market bringing additional and welcome competition to this sector.
I should add that myself and the Governor of the Central Bank meet regularly, the latest of these meetings took place on 2 April. Among the items discussed was the issue of mortgage interest rates. The Governor provided an update on the ongoing work that he and his officials are carrying out on the issue of the standard variable rates charged by the lenders.
We noted that the SVRs charged in Ireland are higher than other euro area countries and have not fallen in line with ECB wholesale rates. The Central Bank will continue to research why this is the case and will publish results shortly. The Governor will update me on progress in due course.
149. Deputy Jack Wall asked the Minister for Finance if a person (details supplied) in County Kildare has entitlements to a tax rebate in regard to all of taxes paid; and if he will make a statement on the matter. [14330/15]
Amharc ar fhreagraI am advised by the Revenue Commissioners that PAYE Balancing Statements were already issued by them to the person concerned for each of the years 2010, 2011, 2012 and 2014 and that such a Statement will shortly issue to the person concerned for 2013. If any of the information or details on those statements is not correct or incomplete, then the person concerned should contact Revenue at the address or number included on those Statements.
150. Deputy Pearse Doherty asked the Minister for Finance further to Parliamentary Questions No. 53 of 25 March 2015 and No. 283 of 31 March 2015, if he will explain the apparent contradiction in his replies regarding the question of whether credit card companies have to notify the Central Bank of Ireland of a decision to raise their interest rates; and if he will make a statement on the matter. [14348/15]
Amharc ar fhreagraThe Central Bank has advised me that there is no statutory obligation on credit card companies to notify the Bank of a decision to raise their interest rates but the Central Bank is usually informed as a matter of courtesy. Both of the replies to which the Deputy refers make it clear that the Central Bank does not regulate these interest rates.
The Consumer Protection Code 2012, however, requires all regulated entities to inform personal consumers on paper or on another durable medium of any change in the interest rate on a loan and the notification must normally be provided at least 30 days in advance of any change in the interest rate.
151. Deputy Pearse Doherty asked the Minister for Finance the number of first-time buyers who have purchased mortgages from the companies that the ICS distribution platform was sold to; and if he will make a statement on the matter. [14364/15]
Amharc ar fhreagraThe Deputy should be aware that the ICS platform was sold to Dilosk Limited. As Dilosk Limited is a private company, I do not have access to business information relating to the company and accordingly, am not in a position to answer the Deputy's question.
152. Deputy Pearse Doherty asked the Minister for Finance his views that the sale of the ICS distribution platform has in any way contributed to greater competition for those seeking a mortgage on principal dwelling homes; and if he will make a statement on the matter. [14365/15]
Amharc ar fhreagraAt the time of its acquisition of the ICS distribution platform, Dilosk Limited stated the following on its web site:
"The Company will offer mortgages to borrowers seeking to purchase or refinance residential property with a particular focus on residential investment properties (i.e. Buy-to-Let). "
This is an important segment of the overall residential mortgage market. With the reduced number of lenders currently operating in the market, any new entrants are welcome as they will obviously increase competition to the ultimate benefit of the consumer over time.
