Written Answers Nos. 78-96
78. Deputy Michael McGrath asked the Minister for Finance the first and full-year costs of decreasing the non-PAYE USC surcharge from 3% to 2%, to 1%, to nil, respectively; the estimated number of persons affected by such a change; and if he will make a statement on the matter. [51343/17]
Amharc ar fhreagraI am advised by Revenue that the table sets out the estimated first and full year costs to the Exchequer and the number of income earners affected from decreasing the USC surcharge for non-PAYE income over €100,000 in the manner set out by the Deputy.
|
USC Surcharge Rate |
First Year €M |
Full Year €M |
Numbers |
|
2% |
-31.4 |
-56.1 |
21,800 |
|
1% |
-62.8 |
-112.1 |
21,800 |
|
0% |
-94.8 |
-168.2 |
21,800 |
These figures are estimates from the Revenue tax forecasting model using latest actual data for the year 2015, adjusted as necessary for income, self-employment and employment trends in the interim. They are estimated by reference to 2018 incomes and are provisional and may be revised.
79. Deputy Michael McGrath asked the Minister for Finance the number of self-employed persons who will benefit from an increase in the earned income tax credit; and if he will make a statement on the matter. [51344/17]
Amharc ar fhreagra80. Deputy Michael McGrath asked the Minister for Finance the first and full-year cost of increasing the earned income tax credit from €950 to €1,650; and if he will make a statement on the matter. [51345/17]
Amharc ar fhreagraI propose to take Questions Nos. 79 and 80 together.
A Post-Budget 2018 Ready Reckoner is available on the Revenue Statistics webpage at https://www.revenue.ie/en/corporate/information-about-revenue/statistics/ready-reckoner/index.aspx. In relation to the Deputy's question, this Ready Reckoner shows a wide range of estimated costs including, on Page 6, the estimated cost to the Exchequer of changes to the earned income tax credit. The number of taxpayer units that would benefit from an increase in the earned income tax credit is of the order of 151,600.
81. Deputy Michael McGrath asked the Minister for Finance the first and full-year cost of increasing the home carer tax credit from €1,100 to €2,000; and if he will make a statement on the matter. [51346/17]
Amharc ar fhreagraA post-Budget 2018 Ready Reckoner is available on the Revenue Statistics webpage at https://www.revenue.ie/en/corporate/information-about-revenue/statistics/ready-reckoner/index.aspx. In relation to the Deputy's question, this Ready Reckoner shows a wide range of estimated costs including, on Page 6, the estimated cost to the Exchequer of changes to the home carer tax credit. The increase indicated by the Deputy is not shown but can be estimated on a pro-rata or straight-line basis from the increases shown in the Ready Reckoner.
82. Deputy Michael McGrath asked the Minister for Finance the estimated cost of reducing exit tax on life assurance policies from 41% to 39%; the estimated cost each year of linking the exit tax to DIRT reductions until they both reach 33%; and if he will make a statement on the matter. [51347/17]
Amharc ar fhreagraIn Budget 2017, the then Minister for Finance announced that the rate of DIRT would be reduced by 2 percentage points in each on the subsequent four years so that it would fall by 8 percentage points from its then rate of 41 percent to reach 33 percent in 2020.
Using the 2017 base, the estimated cost of reducing the rate of LAET from 41 percent to 39 percent is in the order of €11 million. On the assumption that there may be no growth in investment in products liable to LAET over the longer time period and no behavioural change, a reduction from 41 percent to 33 percent could cost in the order of €44 million. If all investment type products which are taxed at a similar rate were also to be reduced from 41 percent to 33 percent, the likely cost including any reduction in the rate applied to LAET could be in the region of €56 million.
The final cost of any possible change is likely to be determined by the change in the level of investment in products subject to LAET. Clearly if the level of investment were to be lower, the cost of a reduction in the rate charged would also be lower, and the reverse is equally true. It is worth noting in that context that to date in 2017 the level of LAET receipts compared to those forecasted is lower by some 23 percent, and this is not expected to change significantly in December.
As I announced during Report Stage of Finance Bill 2017, in the course of work on this summer’s TSG paper on DIRT and Exit Tax, and following advice from Revenue, it has become evident that there are more complex issues to be addressed in the context of the tax regimes which apply to investment products that are not covered by DIRT, than simply the degree of the rates of tax applied, and that a more holistic approach might be required in the context of addressing opposition calls for study on the re-establishment of the informal link between DIRT and LAET.
I therefore informed the Dáil that I propose to establish a working group comprising officials from my Department and from Revenue to examine and address the variety and complexity of the existing regimes, including the interaction of those regimes. When announcing this working group, I specified that its work will encompass an examination of the divergence between the rate of DIRT and the rate of LAET, including the impact of that divergence of life assurance savers.
I also noted that the group will consult with the relevant industry bodies, and will carry out a public consultation on the issues within its remit by written submission.
I will instruct the group to present me with coordinated formal proposals in advance of Budget 2019, allowing sufficient time for those proposals to be acted on if necessary.
83. Deputy Michael McGrath asked the Minister for Finance the estimated cost of creating a childcare support tax credit for parents of €2,000, €4,000, €6,000 and €8,000, respectively; and if he will make a statement on the matter. [51348/17]
Amharc ar fhreagraI am advised by Revenue that there are no data available to estimate the cost, uptake or levels of absorption of the measures as set out by the Deputy.
84. Deputy Michael McGrath asked the Minister for Finance the cost that is included in the fiscal space for mortgage interest relief in each year to 2021; and if he will make a statement on the matter. [51349/17]
Amharc ar fhreagra85. Deputy Michael McGrath asked the Minister for Finance the revenue that is included in the fiscal space for local property tax; if that is based on LPT, in view of the fact that it currently is charged; and if he will make a statement on the matter. [51350/17]
Amharc ar fhreagraI propose to take Questions Nos. 84 and 85 together.
The calculation of fiscal space decouples expenditure growth from revenue developments. Fiscal space represents the additional capacity arising from the permitted expenditure growth rate that is available for expenditure increases and/or tax reductions. Fiscal space may be increased through the introduction of discretionary revenue measures that increase revenue and conversely it is reduced by discretionary revenue measures that lower revenue.
As the Deputy is aware, the Government committed in the Programme for Partnership Government, the Confidence and Supply Agreement and Budget 2017 to retain Mortgage Interest Relief (MIR) beyond 2017 on a tapered basis. Accordingly, Budget 2018 included its retention for principal private residences for a further three years on a tapered basis through the continuation of 75 per cent of the existing relief in 2018, 50 per cent in 2019 and 25 per cent in 2020.
As the specific form and length of the tapering was only decided in the context of Budget 2018, pre-Budget 2018 tax forecasts include the costs of the scheme on an unchanged basis. This means that the tapering of MIR results in a revenue yield to the Exchequer that represents a positive discretionary revenue measure. It incrementally increases fiscal space by an estimated €51 million in 2018, €46 million in 2019, €41 million in 2020 and €37 million in 2021.
With regard to Local Property Tax (LPT), the revaluation date has been postponed to 2019. The position in 2019 and beyond is a matter for consideration by Government in the coming year. In that context, my Department and the Department of Housing, Planning and Local Government in conjunction with the Revenue Commissioners will consider issues relating to the implementation of the recommendations in the Report prepared by Dr Don Thornhill. The Government will make its position clear so that households will know well advance what its plans are for LPT. In that regard, the forecast for LPT as set out in Budget 2018 of €470 million for 2017 remains unchanged over the forecast horizon.
As a result, there are no discretionary revenue measures relating to LPT in 2018 and no assumptions can be made in this regard for 2019 and subsequent years until the policy process described above is completed. Accordingly, LPT has no impact on the forecasts of fiscal space out to 2021.
86. Deputy Michael McGrath asked the Minister for Finance the estimated cost of removing USC for each person earning under €60,000, €70,000, €80,000, €90,000 and €100,000, respectively; and if he will make a statement on the matter. [51351/17]
Amharc ar fhreagraI am advised by Revenue that the following table sets out the estimated first and full years cost to the Exchequer of increasing the USC threshold from €13,000 to the levels set out by the Deputy.
|
USC Threshold |
First Year Cost €m |
Full Year Cost €m |
|
€60,000 |
1,173 |
1,357 |
|
€70,000 |
1,400 |
1,621 |
|
€80,000 |
1,581 |
1,832 |
|
€90,000 |
1,728 |
2,004 |
|
€100,000 |
1,846 |
2,143 |
In these costings, individuals earning in excess of the USC amounts specified in the above table pay USC on all income at the rates and bands as set out in Budget 2018 i.e. on a post-Budget 2018 basis.
This estimate has 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.
87. Deputy Michael McGrath asked the Minister for Finance the first and full-year cost of increasing the lifetime limit for the capital gains tax entrepreneurial relief from €1 million to €15 million; and if he will make a statement on the matter. [51352/17]
Amharc ar fhreagraIt is assumed that the Deputy is referring to the revised Entrepreneur Relief provided for in section 597AA of the Taxes Consolidation Act 1997. I am advised by the Revenue that the cost of the measure would depend on the disposal of relevant gains by taxpayers. However, on the basis of disposals of gains in previous tax years, it is estimated that the cost of increasing this limit to €15m could be in the region of €55m in a full year. If the measure was introduced for disposals from January 2018, the first year cost could be in the region of €50 million. It should be noted that this estimate assumes no behavioral change on the part of taxpayers.
88. Deputy Michael McGrath asked the Minister for Finance the first and full-year cost of increasing the farmers' flat rate addition of between 5.4% and 6% to 6.5%; and if he will make a statement on the matter. [51353/17]
Amharc ar fhreagraThe flat rate addition is designed to compensate non-VAT registered farmers for the VAT incurred by them on the purchases of goods and services. These farmers add this percentage to their prices when selling to VAT registered businesses that subsequently treat the flat rate addition as a normal input VAT in their periodic VAT returns.
Under the EU VAT directive, the flat rate addition is calculated using macro-economic statistics for the preceding three years. Member States are not allowed to fix a rate independently and on that basis therefore it is not appropriate to provide a detailed costing as requested by the Deputy.
89. Deputy Michael McGrath asked the Minister for Finance the first and full-year cost of increasing the group A capital acquisitions tax, CAT, threshold from €310,000 to €320,000, €330,000, €340,000 and €350,000; and if he will make a statement on the matter. [51354/17]
Amharc ar fhreagra90. Deputy Michael McGrath asked the Minister for Finance the first and full-year cost of increasing the group B CAT threshold from €32,150 to €37,150 and €42,150; and if he will make a statement on the matter. [51355/17]
Amharc ar fhreagra91. Deputy Michael McGrath asked the Minister for Finance the first and full-year cost of increasing the group C CAT threshold from €16,250 to €21,250 and €26,250; and if he will make a statement on the matter. [51356/17]
Amharc ar fhreagraI propose to take Questions Nos. 89 to 91, inclusive, together.
I am advised by Revenue that the first and full year cost of increasing Group A, B and C thresholds are outlined in the table.
|
Threshold A €310,000 |
First Year |
Full Year |
|
Increased to |
€m |
€m |
|
€320,000 |
7.4 |
8.5 |
|
€330,000 |
13.8 |
16.0 |
|
€340,000 |
19.6 |
22.8 |
|
€350,000 |
24.8 |
28.9 |
|
Threshold B €32,500 |
First Year |
Full Year |
|
Increased to |
€m |
€m |
|
€37,150 |
11.4 |
13.2 |
|
€42,150 |
22.1 |
25.7 |
|
Threshold C €16,250 |
First Year |
Full Year |
|
Increased to |
€m |
€m |
|
€21,250 |
4.7 |
5.5 |
|
€26,250 |
8.5 |
9.9 |
The current Threshold B rate is €32,500 as of 12th October 2016.
Further information is available in the Post-Budget 2018 Ready Reckoner which is available on the Revenue Statistics webpage at https://www.revenue.ie/en/corporate/information-about-revenue/statistics/ready-reckoner/index.aspx. This Ready Reckoner shows a wide range of detailed information, including changes to the CAT rates and the Group thresholds.
92. Deputy Thomas P. Broughan asked the Minister for Finance if he will report on the Central Bank's invigilation of the management of mortgage arrears by sub-prime lenders; and if he will make a statement on the matter. [51380/17]
Amharc ar fhreagraThe Central Bank of Ireland (Central Bank) has informed me that various lenders offer loans where the interest rate is higher than that generally charged in the market. Although these lenders are commonly referred to as ‘sub-prime lenders’, there is no such regulated category as ‘sub-prime lender’. Retail Credit Firms are authorised to provide credit, in the form of cash loans, directly to individuals (these firms are not licensed to accept deposits). Some firms authorised in this category are mortgage lenders. Retail Credit Firms have been subject to regulation by the Central Bank since 1 February 2008. A register of all Retail Credit Firms is available on the Central Bank website at the following link:
http://registers.centralbank.ie/DownloadsPage.aspx.
In light of their activities, Retail Credit Firms are not subject to the same prudential supervisory regime as licensed credit institutions but are subject to the same Consumer Protection framework requirements including the Central Bank’s statutory Consumer Protection Code and the Code of Conduct on Mortgage Arrears (‘CCMA’).
The CCMA sets out requirements for all mortgage lenders, including Retail Credit Firms, dealing with borrowers in arrears or pre-arrears on a mortgage loan which is secured by their primary residence (as defined). It provides a strong consumer protection framework to ensure that borrowers struggling to keep up mortgage repayments are treated in a fair and transparent manner by their lender and that long term resolution is sought by lenders with each of their borrowers.
The Central Bank engages with Retail Credit Firms in relation to their treatment of borrowers under the Mortgage Arrears Resolution Process (MARP), as provided for in the CCMA. The MARP sets out the steps which lenders must follow:
Step 1: Communicate with borrower;
Step 2: Gather financial information;
Step 3: Assess the borrowers circumstances; and
Step 4: Propose a resolution.
The Central Bank monitors the level of short term and long term mortgage arrears and the level of restructures in relation to, inter alia, non-bank entities. The Central Bank’s Residential Mortgage Arrears and Repossessions Statistics detail figures on ‘Residential Mortgages held by Non-Bank Entities’. The latest figures relate to Q1, 2017 and were published on 8 June 2017 This data is available at the following link:
https://www.centralbank.ie/docs/default-source/statistics/data-and-analysis/credit-and-banking-statistics/mortgage-arrears/residential-mortgage-arrears-and-repossessions-statistics-june-2017.pdf?sfvrsn=7.
93. Deputy Dara Calleary asked the Minister for Public Expenditure and Reform the estimated cost of restoring pensions in full for retired public sector workers by 2019; and if he will make a statement on the matter. [51357/17]
Amharc ar fhreagraThe Public Service Pension Reduction (PSPR), was introduced on 1 January 2011 under the Financial Emergency Measures in the Public Interest (FEMPI) Act 2011.
The PSPR reduces the value of those public service pensions which have pre-PSPR values above specified thresholds. It does so in a progressively structured way which has a proportionately greater effect on higher value pensions.
A very significant part-unwinding of PSPR in three stages is taking place under FEMPI 2015, with PSPR-affected pensioners getting pension increases via substantial restoration of the PSPR cuts on 1 January 2016, 1 January 2017 and 1 January 2018.
From 1 January 2018 all pensions of up to at least €34,132 per year will be exempt from PSPR. Those pensioners not fully removed from the reach of PSPR by dint of these changes will, in the majority of cases, benefit by €1,680 per year from 2018.
The cost of these FEMPI 2015 changes is estimated at about €90 million on a full-year basis from 2018.
The Public Service Pay and Pensions Bill 2017, if enacted, will provide for further significant lessening of the impact of PSPR by way of threshold and rate changes to apply on 1 January 2019 and 1 January 2020.
When fully in place from the beginning of 2020, these changes will mean that the vast majority of public service retirees, comprising everyone with occupational pension values up to at least €54,000, will be entirely free of PSPR. For those who retired since end-February 2012 that threshold will be even higher, at €60,000.
The cost of these changes is estimated at €24 million in 2019 and €12 million in 2020.
The total removal of PSPR by 2019 would cost in the region of €48 million on a full-year basis, by comparison with the cost arising in 2018 following completion, on 1 January 2018, of the FEMPI 2015 part-unwinding or amelioration which I referred to earlier.
94. Deputy Dara Calleary asked the Minister for Public Expenditure and Reform the estimated cost of pay equalisation for new entrants in the public service; and if he will make a statement on the matter. [51360/17]
Amharc ar fhreagraThe 10% reductions in starting pay for certain new entrants were introduced in January 2011 as part of the National Recovery Plan in order to reduce the Public Service Pay Bill by the then Government.
The issue of addressing the difference in incremental salary scales between those public servants, who entered public service employment since 2011 and those who entered before that date was addressed with the relevant union interests under the provisions of the Haddington Road Agreement (HRA). From 1 November 2013 pre and post-2011 pay scales were merged into a single consolidated scale applicable to each grade. Generally, the third point of 1 November 2013 payscale is equivalent to the first point of the pre 2011 scale.
In addition, the Lansdowne Road Agreement provided the flexibility to address particular sectoral issues such as the restoration of supervision and substitution payments and new entrant payments in the Education Sector and the restoration of rent allowances to new entrant firefighters and members of An Garda Síochána.
As such there are no new entrant scales anymore, there are new scales that start at a lower point i.e. the two initial points on the merged scales represent in general, the only difference in pay points for those recruited to new entry grades from 2011.
Indicative estimates of the total cost of moving all staff hired on new entrant scales up two increment points would be over €209m excluding any cost in respect of retrospective payment.
The Deputy will also be aware that the benefits of the new Public Service Stability Agreement 2018-2020, now ratified by the Public Services Committee of the ICTU, are progressively weighted in favour of new entrants.
The PSSA also recognises the issues of concern in relation to the salaries of new entrants and commits all parties to an examination of these matters within 12 months of the commencement of the Agreement. The first, exploratory meeting, with the full complement of Trade Unions and staff associations, took place on the 12th of October. This meeting, based on the contributions of all parties, agreed an outline process of oversight and data gathering. This process will be overseen by the Oversight Body for the PSSA. Further engagement will be undertaken over the coming months with those parties that have subscribed to the Agreement.
95. Deputy Dara Calleary asked the Minister for Public Expenditure and Reform the estimated cost of the public service stability agreement; the cost each year; the impact on the fiscal space in each year covered by the agreement; and if he will make a statement on the matter. [51362/17]
Amharc ar fhreagraThe cost of the Public Service Stability Agreement 2018-2020 is €887m broken down as follows:
|
Year |
Pay Deal Cost |
|
2018 |
€178m |
|
2019 |
€370m |
|
2020 |
€339m |
There are carryover costs associated with the Agreement of €227m in 2021.
The latest Fiscal Space projections were published in the Summer Economic Statement of 2017: http://www.budget.gov.ie/Budgets/2018/Documents/SES/20170712-SES-final-version.pdf.
Subsequent to that the impact of the PSSA was fully included in the calculations for Budget 2018 and the current expenditure ceilings in Table 9 of the Expenditure Report:
http://www.budget.gov.ie/Budgets/2018/Documents/Expenditure%20Report%202018%20(Parts%20I-III).pdf.
The great benefit of the agreement is the level of certainty it provides for medium term fiscal planning. Future projections of the net fiscal space will include provision for the PSSA.
96. Deputy John Curran asked the Minister for Public Expenditure and Reform if the scheduled meeting of the community sector high-level forum took place on 23 November 2017; the progress made at this meeting to address the issue of pensions for community employment supervisers; and if he will make a statement on the matter. [51368/17]
Amharc ar fhreagraAt the April meeting of the Community Sector High Level Forum, my Department outlined its intention to conduct a detailed scoping exercise in order to comprehensively examine and assess the full potential implications of the issues under consideration. In considering the particular matter referred to, regard must be had to the costs and precedent of such an arrangement were one to be created.
It continues to be the position that state organisations are not the employer of the particular employees concerned and that it is not possible for the State to provide funding for such a scheme. The employees in question are, or were, employees of private companies notwithstanding the fact that the companies concerned are, or were, reliant on State funding. In considering the matter, regard must be had to costs and the precedent of such an arrangement were one to be created given that the individuals employed in that sector are not employed by the State, even if many of the services they provide are funded by the State.
A meeting of the Forum took place last Thursday, 23 November, at which the findings of the scoping exercise were shared with members of the Forum. A following meeting to deal with technical questions arising from the exercise will be arranged in the coming weeks.
