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Tuesday, 20 Mar 2018

Written Answers Nos 86-102

Tribunals of Inquiry Recommendations

Ceisteanna (86)

Catherine Murphy

Ceist:

86. Deputy Catherine Murphy asked the Minister for Finance the status of the investigation into the findings of the Moriarty tribunal; if he is satisfied that the findings will be acted upon; and if he will make a statement on the matter. [12395/18]

Amharc ar fhreagra

Freagraí scríofa

In response to the Deputy's question the Moriarty Tribunal made a number of recommendations which affected a number of Government Departments. As Minister for Finance I can only respond in relation to the recommendations made in relation to my own Department.

The tribunal pointed out problems to be addressed in our system of financial regulation. Poor supervision, an overly-deferential attitude by regulators, poor assessment of risks and a lack of follow-through on enforcement, all played a part in the financial crisis. I and my European counterparts have been working steadfastly since the financial crisis to bring about strengthened oversight and resolution regimes. The entire financial services landscape has changed utterly, characterised by the presence of new European institutions; strengthened regulations; a more intrusive supervisory approach; and a new focus on macroprudential requirements.

New European regulations have strengthened controls over the banking system and have resulted in an overhaul of regulation, supervision and resolution regimes. The capital requirements' regulation and directive, which came into force in 2014, brought about significant enhancements in the quality and quantity of capital that banks are required to hold and the setting of minimum liquidity requirements.

The Banking Recovery and Resolution Directive (BRRD) and the Single Resolution Mechanism have transformed the framework for dealing with failing banks and are designed to provide a financial safety net and a means for recovery and resolution with minimum disruption to the sovereign. The overarching objective of the BRRD is to shift the cost of bank failure from taxpayers to shareholders and creditors of the institutions themselves.

The Single Supervisory Mechanism (SSM) is now responsible for the prudential supervision framework for euro area banks. The central piece of the SSM supervisory process is the Supervisory Review and Evaluation Process (SREP) under which ECB led joint supervisory teams inspect business models, internal governance, profitability and banking risks.

All of these new regulations and institutional arrangements have been designed to address the challenges of banking oversight and resolution at a European level and provide for a pro-active approach towards systemic and emergent risks at a European level.

Besides the introduction of new European and national regulations, the Central Bank too has increased its resources and has become more pro-active in addressing systemic risk.

In response to the Tribunal recommendations I considered the provision of tax relief for donations to political parties and decided against introducing such relief. The Electoral (Amendment) (Political Funding) Act 2012 provided for changes to the Electoral Act, 1997 and imposed new limits for donations. Donations to individuals exceeding €600 must be declared and donations exceeding €1,000 in any one year may not be accepted. Political party donations greater than €1,500 must be declared and donations greater than €2,500 in any one year may not be accepted. These limits, in themselves, should act to deter any attempts by wealthy individuals to influence political activity.

Recommendation: Representations to Revenue by Office holders -

In relation to this proposal, I remain of the view that this recommendation could best be considered in the context of the Government's overall approach to political and parliamentary reform. Representations are a valid part of the political process. The Government may wish to consider whether this recommendation should be confined to Revenue, or to Office holders, or whether the Commissioners decision to publish data on the volume of representations made by each Deputy is an adequate response.

The Office of the Revenue Commissioners has advised in relation to the following recommendations of the Moriarty Tribunal that:

Recommendation: Independence of the Revenue Commissioners-

Section 101 of the Minister and Secretaries (Amendment) Act 2011 placed on a statutory basis the independence of the Revenue Commissioners in the exercise by the Commissioners of their statutory functions under the various taxation and customs enactments. This has given effect to the recommendation of the Report of the Tribunal into Payments to Politicians and Related Matters (that is, the report of Mr. Justice Moriarty), that the principle or convention of the independence of the Revenue Commissioners be placed on the more robust status of a legislative provision.

Recommendation: Transmission to other agencies of information obtained by Revenue under bilateral agreements –

This recommendation has been considered. These agreements are international treaties which are very precisely drawn as to the purpose for which information may be used and would not permit such transmission. However, if opportunities arise in the future, the Commissioners will consider the matter further. The Deputy will appreciate that Revenue is not in a position to comment on matters relating to individuals for reasons of taxpayer confidentiality.

Disabled Drivers and Passengers Scheme

Ceisteanna (87)

Tom Neville

Ceist:

87. Deputy Tom Neville asked the Minister for Finance if persons who are blind can get VAT back on cars, in view of the fact they are disabled and require a driver to drive them; and the way in which the claim can be made. [12447/18]

Amharc ar fhreagra

Freagraí scríofa

I am informed by the Revenue Commissioners that the qualifying provisions for the Disabled Drivers and Passengers Scheme are contained in Statutory Instrument No. 353 of 1994 (Disabled Drivers and Disabled Passengers (Tax Concessions) Regulations 1994). Regulation 3 sets out the medical criteria by which the eligibility on medical grounds of disabled persons who are severely and permanently disabled is to be assessed in order to qualify for the scheme. A person who is blind is not included in Regulation 3 and therefore could not qualify for the scheme.

Further information in respect of the Scheme can be found at the following link http://www.revenue.ie/en/tax/vrt/reliefs-exemptions.html#section4-10

Government Bonds

Ceisteanna (88)

Peter Fitzpatrick

Ceist:

88. Deputy Peter Fitzpatrick asked the Minister for Finance the way in which a bond owned by a person (details supplied) can be cashed. [12448/18]

Amharc ar fhreagra

Freagraí scríofa

I am advised by the National Treasury Management Agency (NTMA) that Bank of Ireland historically acted as registrars for certain bonds and Savings Schemes on behalf of the State. Bank of Ireland ceased to fulfil this function some years ago.

The Central Bank of Ireland is now responsible for the maintenance of the register of Irish Government Bonds. As part of its responsibilities the Central Bank of Ireland also maintains in respect of Irish Government Bonds records of amounts not claimed on the redemption date or unclaimed interest on bonds. The NTMA has contacted the Central Bank of Ireland and understands that these records would include records for bonds where Bank of Ireland previously acted as registrar.

In order to investigate whether such a bond has not been redeemed, the holder should write, providing the details, to the following address:

Government Bonds Section

Central Bank of Ireland

Spencer Dock

PO BOX 11517

North Wall Quay

Dublin 1

Alternatively the holder can also e-mail the following address:

governmentbonds@centralbank.ie

Disabled Drivers and Passengers Scheme

Ceisteanna (89)

Éamon Ó Cuív

Ceist:

89. Deputy Éamon Ó Cuív asked the Minister for Finance his plans to review the regulations for the disabled drivers scheme and eligibility for a primary medical certificate under this scheme to ensure that a person with only one arm is eligible for a primary medical certificate; and if he will make a statement on the matter. [12465/18]

Amharc ar fhreagra

Freagraí scríofa

The 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, payment of a fuel grant, and an exemption from Motor Tax.

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. The Scheme represents a significant tax expenditure costing €65m in each of 2016 and 2017 (excluding motor tax foregone).

From time to time I receive representations on behalf of individuals who believe they would benefit from the scheme but do not qualify under the criteria. While I have sympathy for such cases, given the scale and scope of the scheme, I have no plans to review the medical criteria at this time.

Tracker Mortgage Examination

Ceisteanna (90)

Ruth Coppinger

Ceist:

90. Deputy Ruth Coppinger asked the Minister for Finance if there will be an investigation of a bank (details supplied) removing from tracker mortgages customers seeking a top-up mortgage loan; and if he will make a statement on the matter. [12487/18]

Amharc ar fhreagra

Freagraí scríofa

As the Deputy is aware, the Central Bank of Ireland Tracker Mortgage Examination, which is well advanced at this stage, was established to ensure all borrowers who were adversely affected by the tracker scandal were identified and properly recompensed. All relevant matters fall under the scope of this examination, including the matter described in the details supplied by the Deputy.

For borrowers who are dissatisfied with the initial decision by their bank in relation to a fair level of recompense, mechanisms are in place to deal with such situations. As part of the CBI Examination, the banks were required to put in place appeals panels to investigate cases where borrowers felt that they had not been adequately recompensed.

In addition, failing an expected outcome by engaging with these appeals panels, individuals can lodge an appeal with the Financial Services and Pensions Ombudsman (FSPO) to have their case investigated. Individuals can lodge an appeal with the FSPO even in cases where they were not identified by their bank as having been impacted.

Question No. 91 answered with Question No. 64.

Social and Affordable Housing Provision

Ceisteanna (92)

Thomas P. Broughan

Ceist:

92. Deputy Thomas P. Broughan asked the Minister for Finance his plans to utilise the credit union movement and its resources to develop new affordable housing financial products; and if he will make a statement on the matter. [12513/18]

Amharc ar fhreagra

Freagraí scríofa

The Government's Rebuilding Ireland Action Plan for Housing and Homelessness emphasised the need to look at new ways of funding social housing delivery, in particular the need to provide structural, funding and policy supports to increase delivery of social housing by Approved Housing Bodies (AHBs).

My colleague Eoghan Murphy, the Minister for Housing, Planning and Local Government, committed to providing support to the AHB sector to develop innovative financial models to enable AHBs to further enhance their contribution in the delivery of additional social housing. His Department announced in May 2017 that funding of €49,000 would be provided to the Irish Council for Social Housing (ICSH) to support an initiative through which they would develop proposals regarding special purpose vehicles. The purpose of this initiative was to provide a mechanism that would enable the sector to attract investment in social housing projects from potential investors, including the credit union movement. The ICSH has completed 2 of the 3 phases of the project and anticipates that this work should be completed later this year.

Moreover, the Government acknowledges the affordability pressures faced by some households with low to moderate incomes in particular parts of the country. It is precisely for that reason that the Rebuilding Ireland Action Plan for Housing and Homelessness has also prioritised the supply of new and more affordable homes. On 22 January 2018, a package of initiatives to help alleviate affordability pressures faced by households, particularly in areas of high housing demand and high accommodation costs were announced by Minister Murphy. The measures announced were the new Rebuilding Ireland Home Loan, a new Affordable Purchase Scheme and a new Affordable Cost Rental Scheme. Further details on this suite of initiatives are available on the Rebuilding Ireland website at www.rebuildingireland.ie

Officials from my Department and the Department of Housing, Planning and Local Government have met with the credit union representative bodies on a number of occasions to examine how credit unions can assist in the area of social housing.

Following engagement with the credit union sector on proposals for credit unions to provide funding for the provision of social housing, the Central Bank undertook a review of the investment framework for credit unions in 2017. On foot of this review, revised Regulations with the addition of investment in Tier 3 AHBs as a permitted investment class for credit unions commenced on 1 March 2018. The revised Regulations could facilitate a combined sector investment in Tier 3 AHBs of close to €700 million.

The Programme for a Partnership Government recognises the potential role that credit unions can play in housing finance. To that end, this new investment framework for credit unions clarifies the scope and the manner in which credit unions can support the development of social housing.

Ultimately, any funding mechanisms will have to be put in place in the first instance by the credit unions themselves, with the support of their members, and with the agreement of the Central Bank.

Question No. 93 answered with Question No. 78.

Code of Conduct on Mortgage Arrears

Ceisteanna (94)

Eugene Murphy

Ceist:

94. Deputy Eugene Murphy asked the Minister for Finance the guidelines that banks use when calculating the ability to pay of a person in mortgage arrears; and if he will make a statement on the matter. [12555/18]

Amharc ar fhreagra

Freagraí scríofa

I refer the Deputy to the Code of Conduct on Mortgage Arrears (CCMA).

The completion of affordability assessments is a key step in the Mortgage Arrears Resolution Process set out in the CCMA (Step 3 - Assessment). In this regard regulated entities must examine each case on its individual merits and it must base its assessment on the full circumstances of the borrower, including:

a) the personal circumstances of the borrower;

b) the overall indebtedness of the borrower;

c) the information provided in the standard financial statement;

d) the borrower’s current repayment capacity; and

e) the borrower’s previous repayment history. (See Provision 37 of the CCMA).

While the CCMA obliges lenders to explore all of the options for alternative repayment arrangements (ARA) offered by that lender under step 4 of the MARP, it does not oblige lenders to offer and apply a particular set of options nor does it approve the specific options that a lender does offer. The Central Bank has focused on providing a fair and consistent process for the borrower through the CCMA, the MART audits and against defined Sustainability Guidelines. The Central Bank of Ireland published sustainability guidelines, published in September 2013 and subsequently updated them in June 2014. The guidelines are available at http://www.centralbank.ie/regulation/industry-sectors/credit-institutions/Documents/Internal%20Guideline%20-%20Sustainable%20Mortgage%20Arrears%20Solutions.pdf).

Code of Conduct on Mortgage Arrears

Ceisteanna (95)

Eugene Murphy

Ceist:

95. Deputy Eugene Murphy asked the Minister for Finance the reason a person's minimum required pension contributions are not taken into account as an expense when calculating the ability to pay of a person in mortgage arrears; and if he will make a statement on the matter. [12556/18]

Amharc ar fhreagra

Freagraí scríofa

I refer the Deputy to the relevant parts of Code of Conduct on Mortgage Arrears (CCMA) and the Standard Financial Statement (SFS):

The Central Bank’s Code of Conduct on Mortgage Arrears (CCMA) applies to all regulated mortgage lenders and credit servicing firms operating in the State when dealing with borrowers facing or in mortgage arrears on their primary residence.

The CCMA provides a strong consumer protection framework to ensure that borrowers struggling to keep up mortgage repayments are treated in a fair and transparent way by their lender and that long term resolution is sought by lenders with each of their borrowers. It sets out a process, called the Mortgage Arrears Resolution Process (MARP).

The MARP is a four-step process which lenders must follow:

Step 1: Communicate with the borrower

Step 2: Gather financial information

Step 3: Assess the borrower’s circumstances

Step 4: Propose a resolution

As part of step 2 of MARP, a lender must use the prescribed standard financial statement (the SFS) to obtain financial information from a borrower in arrears or pre-arrears, including information in relation to net monthly salary (in section B) and pension contribution (in section C). The lender must provide the borrower with the SFS at the earliest possible opportunity and offer to assist the borrower with completing the SFS.

The completion of affordability assessments is a key step in the MARP (MARP) (Step 3). In this regard a lender must examine each case on its individual merits and it must base its assessment on the full circumstances of the borrower, including, inter alia, the information provided in the SFS.

Banking Sector

Ceisteanna (96, 97)

Pearse Doherty

Ceist:

96. Deputy Pearse Doherty asked the Minister for Finance if a bank (details supplied) or other State-backed banks have been lobbied or communicated with by Israel or other foreign states regarding their management of certain accounts, as, for example, in a newspaper article; and if he will make a statement on the matter. [12557/18]

Amharc ar fhreagra

Pearse Doherty

Ceist:

97. Deputy Pearse Doherty asked the Minister for Finance his views on the lobbying of Irish banks by foreign governments with brutal human rights records with regard to the banks' policies of providing banking services to groups involved in solidarity work with oppressed persons; and if he will make a statement on the matter. [12558/18]

Amharc ar fhreagra

Freagraí scríofa

I propose to take Questions Nos. 96 and 97 together.

As the deputy is aware the relationship between the Minister for Finance and AIB is governed by a Relationship Framework Agreement. Under this framework the Minister has no direct function in commercial decisions made by AIB and these decisions are the responsibility of the Board and management of the bank.

in relation to your specific query AIB have provided the following response

“AIB cannot comment on individual customer accounts.”

Banking Sector Regulation

Ceisteanna (98)

Pearse Doherty

Ceist:

98. Deputy Pearse Doherty asked the Minister for Finance if the Central Bank has investigated issues regarding failure to comply with provision 3.11 of the consumer protection code relating to the transfer of mortgages; if so, the nature of the complaints, investigation or results; and if he will make a statement on the matter. [12564/18]

Amharc ar fhreagra

Freagraí scríofa

The Central Bank monitors compliance by regulated entities with its regulated requirements, including the Consumer Protection Code (the Code), through its on-going supervisory engagement with firms including but not limited to reviews and research; themed inspections; mystery shopping; and advertising monitoring.

Provision 3.11 of the Code requires that where a regulated entity intends to transfer all or part of its regulated activities to another regulated entity, it must:

- notify the Central Bank immediately;

- provide at least two months’ notice to affected consumers to enable them to make alternative arrangements;

- ensure all outstanding business is properly completed prior to the transfer;

- inform the consumer of how continuity of service will be provided following the transfer; and

- inform the consumer that their details are being transferred to the other regulated entity, if that is the case.

The provisions of the Code are binding on regulated entities and, must at all times, be complied with when providing financial services. The Central Bank of Ireland has the power to administer sanctions for a contravention of this Code, under Part IIIC of the Central Bank Act 1942.

Tax Data

Ceisteanna (99)

Niall Collins

Ceist:

99. Deputy Niall Collins asked the Minister for Finance the value of all tax appeals with the Revenue Commissioners that are awaiting a hearing or judgment, by liability type; and if he will make a statement on the matter. [12596/18]

Amharc ar fhreagra

Freagraí scríofa

Since 21 March 2016 tax appeals are made directly to the independent Tax Appeals Commission (TAC) which then notifies Revenue of the appeal. The amount estimated by Revenue to be in dispute for all tax appeals, both pre and post 21 March 2016, is approximately €1.8 billion. This figure relates to appeals that are with the TAC and with the Courts.

The €1.8 billion disputed liability is broken down by tax type as follows-

Tax type

Disputed Amount €

Income tax

368,575,815

Corporation tax

575,570,828

Capital gains tax

287,822,234

VAT

194,013,071

PAYE

225,228,644

(employer and employee cases)

Capital acquisitions tax

65,744,701

Customs & excise

5,752,481

Vehicle registration tax

41,279

Other

82,232,041

Total

1,804,981,094

The value of outstanding tax appeals is constantly changing as appeals are decided, either by determination by the TAC or the Courts or by agreement with Revenue, and as the TAC notifies new appeals to Revenue.

Tax Appeals Commission

Ceisteanna (100)

Niall Collins

Ceist:

100. Deputy Niall Collins asked the Minister for Finance the average length of time an appeal case takes to be heard by the Tax Appeals Commission; the average time to receive a judgment; and if he will make a statement on the matter. [12597/18]

Amharc ar fhreagra

Freagraí scríofa

I am informed by the Tax Appeals Commission (TAC) that for a number of reasons, it is not possible to ascertain the average length of time an appeal takes to be heard or settled, as not all matters require a hearing.

I am advised that some appeals can settle within a number of days of notification to the TAC due, in some part, to their less complex nature. However other more complex appeals, some of which can involve multiple appellants, multiple tax heads and/or multiple years of assessment, can require significant preparatory work and take longer to reach a conclusion. In certain circumstances, hearings or determinations can take place in respect of part of an appeal; however the appeal will remain open until all issues are concluded.

I am further advised by the TAC that it is increasingly conducting less formal hearings with a view to assisting all parties reach a settlement or agreement more expeditiously. These are also being used in order to facilitate the timely progression of appeals and where possible, to agree the main points prior to the formal hearing.

Tax Appeals Commission

Ceisteanna (101)

Niall Collins

Ceist:

101. Deputy Niall Collins asked the Minister for Finance the number of appeals commissioners operating; the number of vacancies; the length of time these vacancies have been left unfilled; the reason therefor; and if he will make a statement on the matter. [12598/18]

Amharc ar fhreagra

Freagraí scríofa

Since its establishment in March 2016 the Tax Appeals Commission (TAC) has had two full time Commissioners. An additional temporary Commissioner was appointed in June 2017 for a 2 year period in order to assist in disposing of the legacy appeals which transferred to the Commission from the Revenue Commissioners. My Department is currently considering a request from the TAC for additional resources including staff. I note that this request does not involve any further appointments at Commissioner level.

Credit Union Regulation

Ceisteanna (102)

Catherine Murphy

Ceist:

102. Deputy Catherine Murphy asked the Minister for Finance if persons that entered draws in credit unions suspected of not being run in a transparent way will be refunded their entry fees in view of a Central Bank report on members' car draws in credit unions (details supplied); and if he will make a statement on the matter. [12601/18]

Amharc ar fhreagra

Freagraí scríofa

I can advise the Deputy that the board of each credit union is responsible for ensuring compliance with all legislative and regulatory requirements and guidance for the effective governance of the credit union. In particular there is an onus on the boards of credit unions operating prize draws to ensure that the governance, operation and recording of financial transactions are in line with legislation, regulations, and guidance and are fully transparent to members.

Where any instances of loss to a member related to a draw arise, the Central Bank would expect the Board of the credit union to undertake a full review of the circumstances, to compensate its members as appropriate, to update its systems and controls and to provide full details on the issue and the remedial action taken to its members.

The Central Bank issued guidance to credit unions in February 2017, setting out the Central Bank’s expectation that, “where a credit union is operating a draw for its members, it will be done in a clear and transparent manner with appropriate systems and controls in place”. The guidance advises that credit unions should ensure:

- Members are only included in draws where they have given their written consent for inclusion

- Clear terms and conditions are documented and provided to participating members. Such terms and conditions would be expected to include items such as:

- eligibility criteria for entry into the draw and the process for entering the draw (it should be clear whether or not volunteers and/or staff are eligible to enter);

- how the draw fee will be collected;

- information on when and where draws will take place;

- how winners will be advised of their win;

- how any surplus funds arising from the draw will be dealt with;

- how members participating in the draw will be recorded; and

- how the draw will be accounted for and audited (e.g. by internal and external audit).

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