Wednesday, 26 Jul 2017

Written Answers Nos. 148-167

Insurance Costs

Ceisteanna (148, 207, 208)

Brendan Smith

Ceist:

148. Deputy Brendan Smith asked the Minister for Finance his plans to deal with the escalating cost of insurance premiums; and if he will make a statement on the matter. [36263/17]

Fiona O'Loughlin

Ceist:

207. Deputy Fiona O'Loughlin asked the Minister for Finance the assistance that will be given to persons faced with increasing insurance costs; and if he will make a statement on the matter. [36473/17]

Fiona O'Loughlin

Ceist:

208. Deputy Fiona O'Loughlin asked the Minister for Finance the progress that has been made on implementing the recommendations of the motor insurance January 2017 report; and if he will make a statement on the matter. [36542/17]

Freagraí scríofa

Minister for Finance

I propose to take Questions Nos. 148, 207 and 208 together.

My predecessor as Minister for Finance, Michael Noonan T.D. established the Cost of Insurance Working Group in 2016 in order to examine the factors contributing to the increasing cost of insurance and identify what short, medium and long-term measures can be introduced to help reduce the cost of insurance for consumers and businesses. The initial focus of the Working Group was the problem of rising motor insurance premiums and a broad range of issues affecting the cost of motor insurance were examined.

The Working Group’s Report on the Cost of Motor Insurance was published in January 2017. The Report makes 33 recommendations with 71 associated actions to be carried out in agreed timeframes, which are clearly set out in an Action Plan. Some 45 of these action points are due to be implemented by the end of this year with the remainder scheduled for completion before the conclusion of 2018.

There is a commitment within the Report that the Working Group will prepare quarterly updates on its progress and the first such update was published in early May. The second quarterly update was published on the Department's website on 21 July 2017 and shows the progress to date on the overall implementation of the recommendations, with a particular focus on the 17 action points which were due for completion in the second quarter of 2017. All 17 of these action points have been completed by their deadline.

It should be noted that the most recent CSO data (for June) indicates that motor insurance premiums have reduced by 10.2% year-on-year. I do, however, accept that while CSO statistics indicate a greater degree of stability on an overall basis, these figures only represent a broad average and that there are many people who are still seeing increases. I take the view that while the greater stability in pricing is a good thing, premiums are still at a very high level.  

However, I believe that the implementation of the Report on the Cost of Motor Insurance will make a difference to the pricing of insurance premiums over the next 18 months. I also believe that the Setanta judgment, by finding that MIBI is not liable to meet third party claims, removes a major uncertainty from industry, which I would expect to be reflected in pricing in the short to medium term.

Additionally, in January, the Cost of Insurance Working Group embarked on its second phase to examine issues around the cost of insurance for businesses, specifically Employer Liability (EL) Insurance and Public Liability (PL) Insurance. It is envisaged that the final results of this second phase will take the form of an addendum to the existing Report. As with the first phase, the aim is for all relevant bodies and stakeholders to work together in order to deliver fairer premiums for businesses without unnecessary delay. It is hoped that a final report will be published in the autumn.

The Working Group is building upon the previous work done in the motor phase in order to determine how it can be applied in the employer liability and public liability insurance claims areas particularly in relation to:

- Personal Injury data and information

- Effects of legal costs and litigation processes on insurance costs

- Current claims compensation arrangements and cost of claims

- Impact of unlawful activity on insurance sector

The Working Group is also considering the impact of the cost of insurance on the competitiveness of particular business sectors, the impact of health and safety issues on the cost of insurance and other market issues. 

The Working Group has met nine times this year and has held extensive consultations with a range of stakeholders including the Hotels Federation of Ireland, IBEC, ISME, the Vintners’ Federation of Ireland (VFI), the Licensed Vintners’ Association (LVA), the Retail Grocery Dairy & Allied Trades Association (RGDATA), Chambers Ireland, the Law Society of Ireland and the Health and Safety Authority. Further consultations are also planned and I would invite further submissions from interested parties to [e-mail].

Disabled Drivers and Passengers Scheme

Ceisteanna (149)

Brendan Smith

Ceist:

149. Deputy Brendan Smith asked the Minister for Finance his plans to improve the conditions and criteria for the primary medical certificate; and if he will make a statement on the matter. [36264/17]

Freagraí scríofa

Minister for Finance

The Disabled Drivers and Disabled Passengers (Tax Concessions) Scheme provides relief from VAT and Vehicle Registration Tax (up to a certain limit), an exemption from motor tax and a grant in respect of fuel, on the purchase of an adapted car for transport of a person with specific severe and permanent physical disabilities.

To qualify for the Scheme an applicant must be in possession of a Primary Medical Certificate. To qualify for a Primary Medical Certificate, an applicant must be permanently and severely disabled within the terms of the Disabled Drivers and Disabled Passengers (Tax Concessions) Regulations 1994 and satisfy one of the following conditions:

- 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 Scheme and qualifying criteria were designed specifically for those with severe physical disabilities and are, therefore, necessarily precise. 

The Scheme represents a significant tax expenditure. Between the Vehicle Registration Tax and VAT foregone, and the fuel grant, the scheme cost approximately €65m in 2016. 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. 

I recognize the important role that the Scheme plays in expanding the mobility of citizens with disabilities. From time to time representations are received on behalf of individuals who feel they would benefit from the Scheme but do not qualify under the six criteria. While I have sympathy for these cases, 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.

Bank Branch Closures

Ceisteanna (150)

Brendan Smith

Ceist:

150. Deputy Brendan Smith asked the Minister for Finance his plans to hold discussions with the banking sector regarding the provision of additional financial services through An Post, in view of the concerns in rural communities in which bank branches are closing; and if he will make a statement on the matter. [36265/17]

Freagraí scríofa

Minister for Finance

I refer the Deputy to PQ 19081/17, which was answered on 13 April 2017.

I should stress at the outset that the Irish Government has no formal role in the commercial decisions of the banks as to their future business model and whether or not they will close particular branches.

 The Deputy will no doubt appreciate that the provision of services by banks, including the location of branches, is a commercial decision for the Boards and management of the institutions.

That said, I expect that any bank closing branches will do everything that it can to mitigate the impacts of the branch closures on local communities, including technology and the use of alternative means of service delivery. I also expect that the bank will ensure that customers are kept informed about developments and provided with the appropriate assistance to move branches, switch to other banks and avail of alternative means of accessing financial services. The Central Bank will also have a role in ensuring that consumer protection rules are followed.

In the context of the closures announced earlier this year, I understand that Ulster Bank intends extending its services with An Post to include cash and cheque lodgements for personal and business customers where the bank is closing branches.

The Deputy may be interested to hear that An Post recently announced that they are providing a new current account service, the An Post Smart Account to the public. This offers a number of features to its account holders. Consumers can apply for an account online or in any Smart Account Post Office.

Mortgage Arrears Proposals

Ceisteanna (151)

James Browne

Ceist:

151. Deputy James Browne asked the Minister for Finance if his Department has adopted a standard financial statement for use by all lenders and MABS to assess a borrower’s financial position in line with recommendations from the Mental Health Commission and the mortgage arrears and personal debt expert group; and if he will make a statement on the matter. [36270/17]

Freagraí scríofa

Minister for Finance

The Central Bank’s Code of Conduct on Mortgage Arrears (CCMA) provides a strong consumer protection framework to ensure that each borrower who is struggling to keep up mortgage repayments is treated in a timely, transparent and fair manner by lenders.  

The CCMA sets out how lenders must treat borrowers in mortgage arrears, or facing mortgage arrears, with due regard to the fact that each case of mortgage difficulty is unique and needs to be considered on its own merits. All cases must be handled sympathetically and positively by the lender, with the objective at all times of assisting the borrower to meet his/her mortgage obligations. The CCMA sets out the Mortgage Arrears Resolution Process (MARP) as the framework lenders must follow when dealing with borrowers in mortgage arrears or pre-arrears.

As part of the MARP process, lenders will need to gather relevant financial information from a mortgage borrower. To that end, Appendix 1 of the CCMA

(https://www.centralbank.ie/docs/default-source/Regulation/codes/gns-4-1-7-2013-ccma.pdf?sfvrsn=4) now sets out a Standard Financial Statement (SFS) which is to be used by all lenders and other relevant creditors across the industry in line with the recommendation which was made by the Mortgage Arrears and Personal Debt Expert Group. The SFS is essential to the effectiveness of the MARP Process and the standard format ensures that assessments of borrowers’ cases will be based on a common analysis of their financial circumstances.

It could also be noted that, in a more general way, the Consumer Protection Code (provision 3.1) also requires regulated entities to provide such reasonable assistance and/or assistance that may be necessary to a vulnerable customer to facilitate his/her dealings with the regulated entity.

Central Bank of Ireland Staff

Ceisteanna (152)

Michael McGrath

Ceist:

152. Deputy Michael McGrath asked the Minister for Finance the number of vacancies across each functional area of the Central Bank; the percentage vacancy rate in each section, in tabular form; the length of time these positions have been vacant; and if he will make a statement on the matter. [36281/17]

Freagraí scríofa

Minister for Finance

I am advised by the Central Bank that there are 155 open competitions in operation, and a total of 188 positions to be filled to bring staffing total to the approved complement.

The breakdown of these vacancies is set out as follows:

Pillar	2017 Complement	Closing at Jun-2017	Variance (vacancies) to complement at end Jun-2017	Current staffing Vs. Compliment	% vacancies
Central Banking	395	345	50	87%	13%
Financial Regulation	869	788	82	91%	9%
Operations	552	496	57	90%	10%
Total	1816	1628	188	90%	10%

Each role is advertised internally and externally for a minimum of 2 weeks and roles within Operations and Financial Regulation take on average 8 weeks to fill with Central Banking roles being filled on average within 7.3 weeks.

Note 1: As at 24th July 2017 there are 155 open competitions - split as follows 31 Central Banking, 100 in Financial Regulation (Campaign Based) & 24 in the Operations Pillar.

Universal Social Charge Abolition

Ceisteanna (153, 154, 155, 165, 166)

Richard Boyd Barrett

Ceist:

153. Deputy Richard Boyd Barrett asked the Minister for Finance the full year cost of abolishing the universal social charge. [36293/17]

Richard Boyd Barrett

Ceist:

154. Deputy Richard Boyd Barrett asked the Minister for Finance the full year cost of abolishing the universal social charge for persons earning less than €90,000. [36294/17]

Richard Boyd Barrett

Ceist:

155. Deputy Richard Boyd Barrett asked the Minister for Finance the full year cost of abolishing the universal social charge for persons earning less than €80,000. [36295/17]

Richard Boyd Barrett

Ceist:

165. Deputy Richard Boyd Barrett asked the Minister for Finance the amount that would be collected if extra tax bands were introduced (details supplied). [36307/17]

Richard Boyd Barrett

Ceist:

166. Deputy Richard Boyd Barrett asked the Minister for Finance the amount that would be collected in a single year if the rate of USC was only applied to those earning more than €90,000. [36308/17]

Freagraí scríofa

Minister for Finance

I propose to take Questions Nos. 153 to 155, inclusive, 165 and 166 together.

The Universal Social Charge (USC) is projected to raise approximately €3.7 billion in Exchequer receipts terms in 2017, with this level expected to increase, on a dynamic basis, as employment and wage growth are projected to continue over the forecast horizon. 

For example, on a no policy change basis, which does not take account of the allocation of fiscal space beyond Budget 2017, but does include the carryover effect of Budget 2017 changes, the USC is expected to yield approximately €4.0 billion in 2018. Therefore, assuming abolition in 2018, the full-year cost of abolishing the Universal Social Charge would be in the order of €4.0 billion. As the Deputy will appreciate, these figures will be reviewed and are subject to change as part of the Budget 2018 process in October this year, which will incorporate the most up to-date macroeconomic data.

I am advised by the Revenue Commissioners that the first and full year cost of abolishing the USC for persons earning less than €90,000 is €1,884 million and €2,185 million respectively.

I am advised by the Revenue Commissioners that the first and full year cost of abolishing the USC for persons earning less than €80,000 is €1,730 million and €2,004 million respectively.

The Deputy may also wish to note that increasing the entry threshold to USC in this manner would create a significant step effect whereby a USC liability of over €3,589 or €4,389 would arise once income exceeds €80,000 or €90,000 respectively.

I am advised by Revenue that the first and full year yield of introducing additional income tax bands such that earnings between €100,000-€140,000 are subject to income tax at 50%; earnings between €140,000 and €180,000 are taxed at 55%; earnings between €180,000 and €250,000 are taxed at 60%; and earnings above €250,000 are taxed at 65%; is €1,636 million and €2,226 million respectively.

On the basis of the information provided above in respect of the cost of abolishing the USC for those earning under €90,000 and the projected 2018 USC yields, it is estimated that the amount that would be collected in 2018 if USC were to be applied only to those earning over €90,000, using the current system of rates and bands for the charge, would be in the region of €1,815 million.

These estimates have been generated by reference to 2018 incomes as calculated on the basis of actual data for the year 2015, the latest year for which returns are available, adjusted as necessary for income, self-employment and employment trends in the interim. The estimates are provisional and may be revised.

Property Tax

Ceisteanna (156)

Richard Boyd Barrett

Ceist:

156. Deputy Richard Boyd Barrett asked the Minister for Finance the full year cost of abolishing the local property tax. [36296/17]

Freagraí scríofa

Minister for Finance

I am informed that the estimated cost of abolishing the Local Property Tax (LPT) in 2018 would be in the order of €460 million, based on my Department’s latest official forecast of LPT receipts for next year.

NAMA Portfolio

Ceisteanna (157)

Richard Boyd Barrett

Ceist:

157. Deputy Richard Boyd Barrett asked the Minister for Finance the details of all empty properties and land banks in NAMA's assets that have not yet been sold; the negotiations that have taken place to acquire these homes for social and or affordable housing; and if he will make a statement on the matter. [36299/17]

Freagraí scríofa

Minister for Finance

I wish to advise the Deputy that, under Sections 99 and 202 of the NAMA Act, NAMA is precluded from disclosing confidential information, including information relating to debtors and the assets under their control.

I am advised that, at its recent appearance before the Oireachtas Joint Committee on Finance, Public Expenditure and Reform, and Taoiseach, NAMA stated that it holds security over approximately 4,000 residential properties and that only 72 of these – less than 2% - are vacant. I am advised by NAMA that this is considered frictional vacancy, whereby one tenant has just moved out of a property and a new tenant is preparing to occupy it.

As regards development land over which NAMA holds security, NAMA’s objective is to facilitate the delivery of 20,000 residential units by end-2020, subject to commercial viability.

From the beginning of 2014 to the end of April 2017, I am advised that over 5,300 residential units were completed with funding from NAMA. In addition, I am advised that another 9,200 units are either under construction or have obtained planning permission. Sites with a delivery capacity of another 9,500 units are either in the planning system or will be within a year. Pre-planning and feasibility work is underway on sites which have a delivery capacity for another 17,000 units.

NAMA has also played an important role in facilitating, on a commercial basis, the supply of social housing from within its existing portfolio. It has engaged extensively with the Department of Housing, Planning and Local Government, the Housing Agency, local authorities and approved housing bodies in order to facilitate the delivery of social housing to the greatest extent possible given the composition of assets securing its loans.

I am advised that, to date, NAMA has identified 6,945 vacant residential properties as being potentially suitable for social housing. Through the Housing Agency, local authorities confirmed demand for 2,768 of these properties and to date, 2,398 of these properties have been delivered to both local authorities and approved housing bodies for social housing. It is important to note that confirmation of demand and suitability is a matter, not for NAMA, but for the local authorities through the Housing Agency.

Tax Reliefs Costs

Ceisteanna (158)

Richard Boyd Barrett

Ceist:

158. Deputy Richard Boyd Barrett asked the Minister for Finance the amount of revenue that was forgone in 2015 and 2016 and will be forgone in 2017 through tax breaks on private medical insurance; and if he will make a statement on the matter. [36300/17]

Freagraí scríofa

Minister for Finance

I am advised by Revenue that the cost of tax relief on medical insurance premiums between 2004 and 2015, the latest year for which data are available, is published online on the Revenue website and is available at: http://www.revenue.ie/en/corporate/information-about-revenue/statistics/tax-expenditures/costs-expenditures.aspx.

In Budget 2014 a maximum premium threshold of €1,000 per adult and €500 per child was introduced on medical insurance premiums that would continue to be eligible for tax relief from 16 October 2013. Any premium amount paid in excess of these thresholds no longer qualifies for tax relief.

The cost of Income Tax relief in respect of medical insurance increased significantly in the years leading up to Budget 2014, estimated at €404 million in 2011, €448 million in 2012 and it was projected that the cost could reach €500 million in 2013 if no policy change were made. Despite the increasing cost of the relief, the numbers insured were estimated to have reduced by approximately 150,000 over the same period, while at the same time the level of medical cover decreased on some policies.   

Against this background the increase in costs was unsustainable. If the relief had remained unchanged and the trend was to continue, it was estimated that the cost could have increased to €1 billion per annum by 2020. 

The ceilings introduced in Budget 2014 ensure a level of continuing support via the tax system for those who purchase medical insurance policies, while reducing Exchequer exposure to more expensive policies.

Tax Reliefs Costs

Ceisteanna (159, 160)

Richard Boyd Barrett

Ceist:

159. Deputy Richard Boyd Barrett asked the Minister for Finance the number of tax units that avail of tax breaks for child care. [36301/17]

Richard Boyd Barrett

Ceist:

160. Deputy Richard Boyd Barrett asked the Minister for Finance the amount of revenue that was forgone in 2015 and 2016 and will be forgone in 2017 through tax breaks for private child care; and if he will make a statement on the matter. [36302/17]

Freagraí scríofa

Minister for Finance

I propose to take Questions Nos. 159 and 160 together.

An exemption from tax is available on income of up to €15,000 per annum for individuals who mind up to three children in their own home. I am advised by Revenue that the numbers availing of the exemption of income arising from the provision of childcare services between 2006 and 2015, the latest year for which data are available, and the associated costs of the relief, are published online on the Revenue’s website and is available at http://www.revenue.ie/en/corporate/information-about-revenue/statistics/tax-expenditures/costs-expenditures.aspx. In 2015, 680 child-minders availed of the relief at a cost to the exchequer of €1.4m. 

Tax relief is not available to parents in respect of crèche fees or child care costs. A relief did exist in the form of a benefit-in-kind exemption where child care facilities were provided by an employer. However, this was abolished in Finance Act 2011, following a recommendation made by the Commission on Taxation.

Corporation Tax Regime

Ceisteanna (161, 163, 164)

Richard Boyd Barrett

Ceist:

161. Deputy Richard Boyd Barrett asked the Minister for Finance the total pre-tax profits relating to corporate profits before deductions or allowances for all firms. [36303/17]

Richard Boyd Barrett

Ceist:

163. Deputy Richard Boyd Barrett asked the Minister for Finance the amount that was deducted from pre-tax profits for losses brought forward in the most recent available statistics. [36305/17]

Richard Boyd Barrett

Ceist:

164. Deputy Richard Boyd Barrett asked the Minister for Finance the amount that was deducted from pre-tax profits arising from all other deductions, allowances and reliefs; and the amount for each category. [36306/17]

Freagraí scríofa

Minister for Finance

I propose to take Questions Nos. 161, 163 and 164 together.

I am advised by Revenue that the available statistics on the calculation of corporate profits and related data are published on the Revenue website for the years 2011 to 2015 at: http://www.revenue.ie/en/corporate/information-about-revenue/statistics/income-distributions/ct-calculation.aspx. In addition, a table showing the cost of tax expenditures, including the cost of losses is available at: http://www.revenue.ie/en/corporate/information-about-revenue/statistics/tax-expenditures/costs-expenditures.aspx.

Tax Yield

Ceisteanna (162)

Richard Boyd Barrett

Ceist:

162. Deputy Richard Boyd Barrett asked the Minister for Finance the amount of revenue collected annually through vehicle registration tax. [36304/17]

Freagraí scríofa

Minister for Finance

The yield from VRT in 2016 was €814 million.

Questions Nos. 163 and 164 answered with Question No. 161.

Questions Nos. 165 and 166 answered with Question No. 153.

Central Bank of Ireland Transactions

Ceisteanna (167)

Richard Boyd Barrett

Ceist:

167. Deputy Richard Boyd Barrett asked the Minister for Finance the volume of commercial trade that took place in shares here in 2016. [36311/17]

Freagraí scríofa

Minister for Finance

The transaction reporting regime established under the EU Markets in Financial Instruments Directive obliges investment firms to report to competent authorities, relevant details of certain financial transactions they execute, including shares.

The designated competent authority in Ireland is the Central Bank of Ireland and the details of the transaction reporting regime is set out in Regulation 112 of SI 60 of 2007 and relevant EU legislation.

The Central Bank informed me that 230.6 million transactions were reported to the Central Bank in 2016, which includes all financial instruments, not just shares. Out of these transactions, 203.9 million of them relate to non-Irish financial instruments. The Bank was not able to provide a more detailed breakdown of this data at this time.

The Central Bank has highlighted to me that based on Irish Stock Exchange published data, 6.6 million equity trades were executed on its trading venues in 2016. The Central Bank also advised that the Irish Stock Exchange produces annual statistics on activity on its markets which can be accessed at: http://www.ise.ie/Media/News-and-Events/2017/Irish-Stock-Exchange-publishes-review-of-2016.html