Written Answers Nos. 59 - 69
59. Deputy Pearse Doherty asked the Tánaiste and Minister for Social Protection her views on the issues raised in correspondence (details supplied); if the creation of a new category of non-dependent co-habitor has even been considered; if her Department has ever investigated the likely cost of a move towards individualisation of the social payments system; and if she will make a statement on the matter. [39909/15]
Amharc ar fhreagraThe EEC Equality Directive 79/9 and the subsequent Supreme Court case (Hyland v Minister for Social Welfare, 1989) led to the change in treatment of non-married cohabiting couples in the social welfare code. The Court ruled that it was unconstitutional for the total income a married couple received in social welfare benefits to be less than the couple would have received if they were cohabiting. Accordingly, couples who are married and cohabiting are treated identically to couples who are cohabiting but not married for social welfare purposes since the Social Welfare Act No 2, 1989. There are no plans to change this.
I am unclear what the Deputy has in mind when he refers to the individualisation of the social payments system. If the Deputy means that one or both members of a couple who are cohabiting could receive the full personal rate of the relevant social welfare assistance payment, irrespective of their partner’s means, then this would be prohibitively expensive.
The Report of the Working Group Examining the Treatment of Married, Cohabiting and One-Parent Families under the Tax and Social Welfare Codes looked at this area of social policy. They published their report in 1999. The Group found the individualisation of social welfare payments to be very complex and did not reach agreement on introducing total independent treatment. They found that full individualisation would carry with it significant cost implications.
There is no current costing available and no plans to change the treatment of cohabiting couples.
60. Deputy Willie O'Dea asked the Tánaiste and Minister for Social Protection the budget cost and the actual cost of the community employment programme, by allowances, supervision, materials and training to 30 September 2015, in tabular form; and if she will make a statement on the matter. [39923/15]
Amharc ar fhreagraThe Community Employment financial information requested by the Deputy is set out below.
|
Allowances* |
Supervision |
|||
|
2015 |
YTD Budget |
YTD Actual |
YTD Budget |
YTD Actual |
|
January |
28,925,637 |
28,738,676 |
4,425,662 |
5,155,722 |
|
February |
52,269,721 |
50,668,029 |
8,851,323 |
9,342,468 |
|
March |
74,586,429 |
74,433,133 |
13,323,031 |
13,677,786 |
|
April |
102,484,689 |
102,607,744 |
18,912,666 |
18,863,180 |
|
May |
124,801,396 |
125,019,582 |
23,384,373 |
23,268,274 |
|
June |
147,118,103 |
145,834,342 |
27,856,081 |
27,628,632 |
|
July |
175,016,364 |
171,804,344 |
33,445,716 |
32,711,921 |
|
August |
197,333,071 |
193,268,680 |
37,917,423 |
36,930,003 |
|
September |
225,231,331 |
214,002,752 |
43,507,058 |
41,003,063 |
*The YTD Actual Allowances figures include the YTD net advances (advances paid less advances recouped.)
|
Materials € |
Training € |
|||
|
2015 |
YTD Budget |
YTD Actual |
YTD Budget |
YTD Actual |
|
January |
586,455 |
1,181,044 |
1,298,162 |
458,357 |
|
February |
2,336,692 |
2,232,648 |
1,057,523 |
809,362 |
|
March |
3,375,222 |
3,284,717 |
1,528,591 |
1,291,686 |
|
April |
4,673,384 |
4,511,236 |
2,115,046 |
1,800,698 |
|
May |
5,711,914 |
5,689,209 |
2,586,114 |
2,280,558 |
|
June |
6,750,444 |
6,754,691 |
3,057,182 |
2,742,706 |
|
July |
8,048,606 |
8,058,180 |
3,643,637 |
3,346,490 |
|
August |
9,087,136 |
9,072,159 |
4,114,705 |
3,721,914 |
|
September |
10,385,298 |
10,056,514 |
4,701,160 |
4,147,753 |
61. Deputy Martin Heydon asked the Tánaiste and Minister for Social Protection if the file relating to an appeal in respect of a carer's allowance by a person (details supplied) in County Kildare will be sent to the appeals office in Dublin as soon as possible; and if she will make a statement on the matter. [39932/15]
Amharc ar fhreagraThe application for carer’s allowance was stopped on 12 August 2015 on the grounds that the care recipient was not in need of full-time care and attention.
The carer was notified on 20 July 2015 of this decision, the reason for it and of her right of review and appeal.
The person concerned has appealed this decision to the independent Social Welfare Appeals Office (SWAO). All the necessary papers have been submitted to the Social Welfare Appeals Office for determination. The SWAO will be in touch with the person concerned in relation to the progress of the appeal.
62. Deputy Bernard J. Durkan asked the Tánaiste and Minister for Social Protection if and when a rent support increase in line with a monthly rent of €1,000 will be approved for a person (details supplied) in County Kildare; and if she will make a statement on the matter. [39936/15]
Amharc ar fhreagraI refer the Deputy to Parliamentary Question No 194 of 29 September 2015 in which the Deputy stated that rent had increased to €950. The client concerned has not, to date, provided the required documentation outlined in response to the previous Parliamentary Question.
63. Deputy Bernard J. Durkan asked the Tánaiste and Minister for Social Protection the support payment available to a person (details supplied) in County Kildare; and if she will make a statement on the matter. [39947/15]
Amharc ar fhreagraThe person concerned is currently not a customer of the department. It is open to the person concerned to make an application for Jobseekers Allowance and if successful they may be eligible to apply for one of the many activation/education supports available.
64. Deputy Bernard J. Durkan asked the Tánaiste and Minister for Social Protection the correct level of payment of invalidity pension and entitlements, including household benefits, to a person (details supplied) in County Kildare; and if she will make a statement on the matter. [39948/15]
Amharc ar fhreagraInvalidity pension (IP) is a payment for people who are permanently incapable of work because of illness or incapacity and who satisfy the pay related social insurance (PRSI) contribution conditions.
The person concerned is in receipt of IP at the maximum weekly personal rate. In addition, he has been awarded living alone allowance, fuel allowance and a travel pass. He has also been awarded the Household Benefits Package which includes electricity allowance and free television licence.
The department is required to carry out periodic reviews to confirm that recipients continue to satisfy the conditions for receipt of the pension. A review of the continued medical eligibility for IP of the person concerned is underway.
65. Deputy Brendan Griffin asked the Minister for Finance if retinitis pigmentosa will be considered a qualifying disability for the primary medical certificate; and if he will make a statement on the matter. [39885/15]
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, a fuel grant, and an exemption from Motor Tax.
To qualify for the Scheme, an applicant must have a permanent and severe physical disability within the terms of the Disabled Drivers and Disabled Passengers (Tax Concessions) Regulations (S.I. 353 of 1994) and satisfy one of the six medical criteria outlined in the Regulations. These are that a person must:
- be wholly or almost wholly without the use of both legs;
- be wholly without the use of one leg and almost wholly without the use of the other leg such that the applicant is severely restricted as to movement of the lower limbs;
- be without both hands or without both arms;
- be without one or both legs;
- be wholly or almost wholly without the use of both hands or arms and wholly or almost wholly without the use of one leg;
- have the medical condition of dwarfism and have serious difficulties of movement of the lower limbs.
The Senior Medical Officer for the relevant local Health Service Executive administrative area makes a professional clinical determination as to whether an individual applicant satisfies the medical criteria. A successful applicant is provided with a Primary Medical Certificate, which is required under the Regulations to claim the reliefs provided for in the Regulations.
An unsuccessful applicant can appeal the decision of the Senior Medical Officer to the Disabled Drivers Medical Board of Appeal, which makes a new clinical determination in respect of the individual. The Regulations mandate that the Medical Board of Appeal is independent in the exercise of its functions to ensure the integrity of its clinical determinations. After six months a citizen can reapply for a Primary Medical Certificate if there is a deterioration in their condition.
The Scheme represents a significant tax expenditure. Between the Vehicle Registration Tax and VAT foregone, and the repayment of excise on fuel used by members of the Scheme, the Scheme represented a cost of €48.6 million to the Exchequer in 2014. This figure does not include the revenue foregone to the Local Government Fund in the respect of the relief from Motor Tax provided to members of the Scheme. In terms of the numbers of claims to the Scheme in 2014, there were 4,936 claims for Vehicle Registration Tax and VAT relief, and 12,338 claims in respect of the repayment of excise on the fuel element of the Scheme.
I frequently receive correspondence from applicants who do not meet the qualifying criteria but feel that they could benefit from the Scheme. While I am sympathetic to those who do not qualify for Scheme, I cannot, given the scale and scope of the Scheme, expand it further within the current context of constrained resources.
I recognise the important role that the Scheme plays in expanding the mobility of citizens with disabilities, and I have managed to maintain the relief at current levels throughout the crisis despite the requirement for significant fiscal consolidation. However, in the still challenging fiscal environment and given the scale and scope of the Scheme, I have no plans to expand the medical criteria beyond the six currently provided for in the Disabled Drivers and Disabled Passengers (Tax Concessions) Regulations 1994.
66. Deputy Michael McCarthy asked the Minister for Finance the consequences for the State in not adhering to the medium term budgetary obligation of the fiscal compact; and if he will make a statement on the matter. [39819/15]
Amharc ar fhreagraIn 2016 Ireland will enter the preventive arm of the Stability and Growth Pact (SGP). Countries in the preventive arm must attain the Medium Term Objective (MTO) or be on an appropriate adjustment path towards it. The MTO is the central concept of the preventive arm that serves to ensure sustainable public finances and compliance with the 3% of GDP deficit criterion in all but the most unusual adverse circumstances.
If the European Commission observes that a Member State has a significant deviation[1] from the MTO or the adjustment path towards the MTO, it will issue a warning to the Member State. Within one month of the adoption of a Commission warning, the Council will adopt a recommendation on the necessary policy measures and will set a maximum deadline of five months for implementation of the actions. If the situation is considered serious and urgent, a three month deadline may be set for effective implementation. Nationally, under the Fiscal Responsibility Act 2012, the Government must prepare and lay before the Dáil a correction plan within two months. The plan must be consistent with the Council's recommendations. Under the Act, the Irish Fiscal Advisory Council is responsible for monitoring if a plan is required and if a plan is performing.
If the Member State does not take effective action within the relevant deadline, the Council can make a decision to this effect by a qualified majority vote. If the Council rejects the decision and there is still no effective action by the Member State, the Commission can bring forward the recommendation again after one month and it is deemed to be adopted by the Council unless there is a simple majority to reject it within 10 days.
This leads to the start of the sanction procedure for euro area Member States. Within 20 days of the adoption of a Council decision on no effective action, the Commission shall issue a recommendation for a new Council decision, requiring the Member State to lodge an interest-bearing deposit equal to 0.2% of the previous year's GDP with the Commission. The Commission's recommendation is deemed to be adopted unless it is overturned by a qualified majority vote. The deposit may be reduced or cancelled by the Council on grounds of exceptional circumstance or reasoned request if the Commission recommend this approach. If the Member State subsequently takes effective action, the deposit plus interest will be returned.
I have outlined above the procedural consequences of a significant deviation from the MTO or the adjustment path towards the MTO. There are also a number of practical consequences of persistent failure to meet the MTO or the required adjustment towards the MTO. In the first instance, the commencement of procedures relating to a significant deviation, let alone reaching the point of sanctions for failure to take effective action, would be likely to result in reputational damage with a series of increasing adverse reports from the European Commission and independent bodies such as the Irish Fiscal Advisory Council. There is also the unknown market reaction to such an event and how this would impact on the State's ability to borrow and the subsequent debt servicing costs. Furthermore, going down this path would increase the risk that the State would not meet the 3% of GDP deficit limit in time and be made subject to the corrective arm of the SGP, which has its own suite of recommendations, monitoring and sanctions.
However, compliance with the obligations of the preventive arm of the SGP is not and should not be primarily about avoiding sanctions and the wider market consequences that would be likely to follow. It is about ensuring sustainable public finances and lower debt levels. Doing so is the best way to avoid future crises arising from domestic sources in our public finances and to protect ourselves against crises arising from matters beyond our control because it will assist in the rebuilding of our fiscal capacity or ability to borrow, if needed in the future. Finally, balancing the budget in structural terms allows the automatic stabilisers play a counter-cyclical role in supporting aggregate demand.
[1] A deviation is considered significant if it is greater than 0.5% of GDP in one single year or 0.25% of GDP on average per year in two consecutive years.
67. Deputy Eric Byrne asked the Minister for Finance the tax credits that would no longer exist if all tax credits were abolished; and if he will make a statement on the matter. [39822/15]
Amharc ar fhreagraI am advised by the Revenue Commissioners that the phrase 'tax credit' has a very specific meaning in the Taxes Acts. For income tax, corporation tax and capital gains tax it means an amount "to be given or set against, or deducted from, the amount of tax chargeable on the person". Therefore, it includes items which form part of the normal computation of a tax liability, (for example the set-off of PAYE deductions against total tax chargeable where a person has both PAYE and non-PAYE sources of income) as well as specific tax reliefs which are given in the form of a credit against tax. I assume that the Deputy is referring to tax reliefs in this question.
The main relevant income tax reliefs given as a credit as of todays date is as follows:
- Basic Personal tax credit,
- Single Person tax credit (€1,650 for 2015 and subsequent years) and
- Married Person or Civil partner tax credit (€3,300 for 2015 and subsequent years);
- Widowed Person (no dependent children) tax credit (€2,190 for 2015 and subsequent years);
- Widowed Parent or Surviving Civil Partner tax credit (€3,600 if bereaved in 2014). This credit is available for the first five years after the year of bereavement;
- Age Credit,
- Single person, widowed or surviving civil partner (€245 for 2015 and subsequent years);
- Married person or in civil partnership (€490 for 2015 and subsequent years);
- Home Carer Tax Credit (€810 for 2015 and subsequent years);
- PAYE Tax Credit (€1,650 for 2015 and subsequent years);
- Incapacitated Child Tax Credit (€3,300 for 2015 and subsequent years);
- Dependent Relative Tax Credit (€70 for 2015 and subsequent years);
- Blind Person's Tax Credit (€1,650 for 2015 and subsequent years);
- Single Person Child Carer Credit (€1,650 for 2015 and subsequent years and claimants are also entitled to an additional €4,000 on their standard rate band);
- Medical Insurance;
- Relief for interest paid on home loans;
- Relief for Health Expenses (Medical Expenses). Relief for medical expenses is given at the standard tax rate with the exception of nursing home expenses which are allowable at the individual's marginal rate of tax; and
- Home renovation incentive. HRI provides a tax credit for property owners for qualifying expenditure incurred on repair, renovation or improvement work carried out on a property.
The main corporation tax credit is:
- Research & development tax credit.
Other items which are technically tax credits include:
Credit for certain taxes withheld:
DIRT, or deposit interest retention tax, is a final liability tax. Under s.261(c) TCA, the grossed up interest is taxable under Case IV of Schedule D and the rate of income tax to be applied is to be the same as the rate at which DIRT was deducted. Under s.59 TCA, individuals are then entitled to a credit in respect of the DIRT deducted. This procedure effectively ensures that DIRT deducted from interest on relevant deposits is a final liability tax. If the credit for DIRT suffered was abolished then a double charge to DIRT would apply without other consequential amendments also being made.
Professional Services Withholding Tax, PAYE and Dividend Withholding Tax operated by Irish companies, are all also treated as credits when calculating an Irish person's tax payable for a year.
Credit for Double Taxation:
Foreign tax credits ensure that a person or company is not taxed on the same income twice in as a result of the interaction between the tax rules of two separate jurisdictions. In Ireland, the mechanics for determining the amount of the credit are set out in Schedule 24 of the Taxes Consolidation Act 1997. Relief from the double tax charge is available by crediting foreign tax paid in the source country of the income against Irish tax payable on that income in the State; this is known as "double taxation relief". Relief for foreign tax forms part of the benchmark tax system and Ireland follows the international norm in this regard as Double taxation relief is the essential feature of our international tax treaties. This relief is particularly important for open economies like Ireland where cross-border trade and activity is particularly prevalent.
Other credit reliefs:
S267J Credit for foreign tax on interest or royalties received by a company from an associated company in Greece, Portugal or Spain in accordance with derogations given to those Member States under the Interest and Royalties Directive.
S634 Credit for tax where an Irish resident company transfers a trading operation carried on by it in another Member State to a non-resident company in return for securities in the non-resident company. In order to get relief, the company making the disposal must produce to the Revenue Commissioners a relevant certificate given by the tax authorities of the Member State in which the trading operation is situated.
S831 Credit from double taxation under the Parent Subsidiary Directive, which is concerned with relieving double taxation in the case of cross border dividend flows within the EU from a subsidiary to its parent company.
68. Deputy Eric Byrne asked the Minister for Finance if he is aware of any jurisdictions that have abolished all tax credits; if there is analysis available as to the economic and social impact of such a move; and if he will make a statement on the matter. [39823/15]
Amharc ar fhreagra69. Deputy Eric Byrne asked the Minister for Finance if he is aware of any jurisdictions that have introduced a flat tax rate of 23%; if there is analysis available as to the economic and social impact of flat taxes; and if he will make a statement on the matter. [39824/15]
Amharc ar fhreagraI propose to take Questions Nos. 68 and 69 together.
I understand that Latvia has a flat income tax rate of 23% with effect from 2015 for certain types of income, while also having a State Social Insurance Mandatory Contributions system. I am not aware of any jurisdictions that have abolished all tax credits. Furthermore, I am not aware of any analysis of the economic and social impacts of these specific measures. However the Deputy may be interested in researching further the tax systems in Latvia, Estonia and Hungary, as these all involve a flat tax element.
It should however be noted that the abolition of tax credits, depending on what tax system remained, would be likely to have a negative impact for low-income earners. Tax credits can be used to shelter tax liabilities from the first unit of taxable income and therefore, depending on their value, can allow low-income earners to significantly reduce their tax liabilities.
With regard to the impact of a move to a flat rate tax of 23%, my officials have estimated that, in the context of the Irish tax system this would have a negative impact on progressivity.
A progressive income tax system means that those on higher incomes pay proportionately higher rates of tax on their income than those on lower incomes. The European Commission compares progressivity of income tax by taking the OECD tax wedge for an individual earning 167% of the average wage and dividing it by the tax wedge for an individual earning 67% of the average wage.
My officials have estimated that the replacement of the Irish income tax and universal social charge systems with a flat income tax rate of 23%, would result in the OECD progressivity measure for Ireland falling from its 2014 calculation of 1.79 to 1. In terms of Ireland's OECD ranking on this progressivity measure, Ireland would move from 2nd highest in the OECD in 2014 to the bottom of the rankings, to share that position jointly with Hungary.
