Pearse Doherty
Ceist:61. Deputy Pearse Doherty asked the Minister for Finance if the United States Government has sought a role in aspects of a case (details supplied); and if he will make a statement on the matter. [21846/18]
Amharc ar fhreagraState Aid
Ceisteanna (61)
Freagraí scríofa
The Government profoundly disagrees with the European Commission’s analysis in the Apple State Aid case.
An appeal is therefore being brought before the European Courts. Such an appeal takes the form of an application to the General Court of the European Union (GCEU), asking it to annul the Commission’s Final Decision.
The Attorney General prepared the legal grounds in support of the annulment proceedings and the application was lodged in the GCEU in 2016. As is normal practice, a summary of these have been published in the Official Journal of the European Union. They were also published on the Department of Finance’s website in December 2016.
The case has been granted priority status and is progressing through the various stages of private written proceedings before the GCEU. It is at the discretion of the court to determine if there will be oral proceedings, either in public or in private. It will likely be several years before the matter is ultimately settled by the European Courts.
As this is the subject of open legal proceedings, it will not be possible to comment further, in particular on any of the individual elements of the State’s legal case in defence of our position. This is important to ensure that we do not prejudice our own legal case.
All Member States have legal standing to intervene in proceedings that go before the European Courts and do so from time-to-time if it is considered that a case raises particular points of relevance for their country. They therefore may intervene in the Irish appeal, and it is a matter for each Member State to make that decision.
Apple have also initiated their own distinct annulment proceedings in the court. As this is Apple’s own legal case, it is not appropriate to comment on any proposed interventions in their case as this is a matter for the respective parties. However, I can confirm that Ireland has intervened in that case to ensure that the best possible case for Ireland is presented to the court on all matters relating to the Apple State Aid Decision.
Banking Sector
Ceisteanna (62)
Pearse Doherty
Ceist:62. Deputy Pearse Doherty asked the Minister for Finance the reason a State-owned bank (details supplied) is seeking access to the social media of potential mortgage holders; his views on the practice; if other banks engage in the behaviour; and if he will make a statement on the matter. [21847/18]
Amharc ar fhreagraFreagraí scríofa
I have received the following response from AIB:
"AIB does not monitor individual customer social media accounts and as such never makes decisions using individual customer’s social media data. The only individual social media data that’s used by the bank is when a customer contacts us on AIB Group Social Channels and we respond to specific queries from customers as is normal practice. We do regular social listening where we monitor macro social media trends and sentiment towards our brand on social media. No individual customer data is collected or held as part of this measurement. This listening tool only uses publicly available social media data and is anonymised and aggregated to measure sentiment and macro themes rather than any specific customer comments.”
Startup Funding
Ceisteanna (63)
Fiona O'Loughlin
Ceist:63. Deputy Fiona O'Loughlin asked the Minister for Finance the timeframe for which applications for start-up relief for entrepreneurs are taking to be processed by the Revenue Commissioners; and if he will make a statement on the matter. [21868/18]
Amharc ar fhreagraFreagraí scríofa
Start-Up Relief for Entrepreneurs (SURE) is a tax relief for individuals who leave full-time employment and start up their own business.
In general terms, relief under SURE is available for an individual who:
- Sets up a new company to carry out a new trade. Companies that carry on a trade previously carried out by another person do not qualify. Nor do many consulting companies, which carry on a profession rather than a trade, qualify.
- Gives up full-time employment elsewhere to take up full-time employment with the new company.
- Invests in ordinary share capital of the new company.
The relief available is based on the amount invested and the amount of tax paid, through the PAYE system, for the previous 6 years.
I am advised by Revenue that it is not possible to give an average time taken to issue a decision regarding approval or rejection. In the more straightforward cases, the application will normally be processed within a month while in the more complex cases, it can take up to 6 months before processing of the application is completed.
The time taken to process a SURE application depends on a number of factors including the complexity of the corporate structure of the company concerned and the extent and completeness of the supporting documentation presented with the application when it is initially made to Revenue.
Of the 29 applications received since 1 January 2018, 13 have been the subject of additional information requests by Revenue.
As the Deputy may be aware, I announced that a review of both the EII and SURE incentives was to be carried out this year. That review is now under way and is being conducted by Indecon Economic Consultants. Amongst other matters, it will consider operational aspects of the scheme.
Revenue Commissioners Resources
Ceisteanna (64, 72)
Michael McGrath
Ceist:64. Deputy Michael McGrath asked the Minister for Finance if extra resources have been provided to the Revenue Commissioners for the upcoming change in PAYE reporting in 2019; the amount that has been spent and will be spent on upgrading the Revenue Commissioners' systems including changes to the Revenue Online service; if extra employees will be hired for these changes; and if he will make a statement on the matter. [21875/18]
Amharc ar fhreagraMichael McGrath
Ceist:72. Deputy Michael McGrath asked the Minister for Finance the status of the Revenue Commissioners PAYE modernisation programme; the work being done to ensure that employers are fully prepared for the change; the benefits the new programme will bring from a Revenue Commissioners perspective; the impact on employees; and if he will make a statement on the matter. [21885/18]
Amharc ar fhreagraFreagraí scríofa
I propose to take Questions Nos. 64 and 72 together.
The implementation of the PAYE Modernisation project was announced in Budget 2017.
PAYE Modernisation represents the most significant reform of the administration of the PAYE system in over 50 years. Its objective is that employers, employees and Revenue will all have access to the most accurate and up-to-date information available relating to pay, tax, PRSI and USC deductions. This will ensure that the right amount is collected at the right time from employees, and that employers pay their correct liabilities when required. The new reporting requirements also minimise the scope for error and omission by employers.
Real-time data will assist Revenue in ensuring that employees get the full benefit of their entitlements during the year, in particular where an individual has a number of employments. Providing employees with access to the statutory deductions reported by their employer and an end of year income statement will improve the accuracy, ease of understanding and transparency of the PAYE system.
For Revenue, the availability of real-time information will inform its risk profiling, identification fraud and non-compliance activities, including assisting in the earlier identification of insolvent businesses. PAYE Modernisation will also provide the Department of Employment Affairs and Social Protection with more timely data regarding employments and PRSI contributions and provide greater assurance on the overall PAYE yield, which will enable better forecasting and policy decisions.
Revenue is undertaking a co-design approach to PAYE Modernisation. It has engaged with key stakeholders since the start of the project and continues to do so to ensure the design is optimised through their input. This will result in a more streamlined process and ultimately a reduction in the administrative burden for employers with pay and tax reporting being a by-product of their payroll process.
I am advised by Revenue that significant change management structures have been put in place for PAYE Modernisation. These include the following key components:
- Monthly meetings with external stakeholders that includes organisations like the Small Firms Association, ISME, IBEC, Irish Tax Institute, Chartered Accountants Ireland, Chambers Ireland, Financial Services Support Unit (under Department of Education) and accountancy firms.
- Monthly meetings with key staff representatives.
- Fortnightly or monthly meetings, as required, with the Payroll Software Developers’ Association.
- Revenue has presented on PAYE Modernisation at over 170 events arranged by representative bodies, payroll software providers, tax practitioners and the Irish Payroll Association (IPASS) throughout the country.
At the end of April 2018 Revenue issued a letter to 219,000 registered employers informing them of the upcoming changes and providing them with links to detailed content on the Revenue website . This letter also provided a link to sign up for regional seminars that will be run by Revenue in September 2018. To date over 3,300 employers and agents have registered their interest in attending these seminars.
Revenue is also undertaking customer service visits to employers to help them prepare for PAYE Modernisation. These visits will focus particularly on small employers who do not have payroll software or a tax agent to help them prepare for the new reporting requirements. Revenue will undertake a media and advertising campaign later in the year to maximise the level of awareness of the changed reporting obligations under PAYE Modernisation.
I am assured by Revenue that preparations for PAYE Modernisation are well advanced. There is currently c. 100 staff in Revenue dedicated to PAYE Modernisation working on regulations, ICT development, change management and business readiness. Revenue recently recruited 40 Clerical Officers specifically to scale and develop the employer helpdesk in advance of the new employer reporting requirements. It is anticipated that Revenue will also require c.35 temporary Clerical Officers in 2018/2019 to manage a peak in business arising from the transition to the new reporting requirements and the simultaneous reporting by employers of the 2018 end of year return.
I am advised by Revenue that total project spend to date is €9.2m. At this point, total project cost for the years 2017-2019 is estimated to be between €25-€30 million. It is important to point out that this expenditure is in the context of a system that brings in almost €1 billion every month to the Exchequer.
Legislative Programme
Ceisteanna (65)
Michael McGrath
Ceist:65. Deputy Michael McGrath asked the Minister for Finance when legislation on limited partnerships will be introduced; the timelines for the enactment of such legislation; and if he will make a statement on the matter. [21876/18]
Amharc ar fhreagraFreagraí scríofa
The funds industry has been a successful and significant element of the Irish financial services landscape for many years. This success has been underpinned by changes in the legislative landscape that have made Ireland an attractive domicile for promoters in Asia, across Europe, the U.S., and further afield. We also have a regulatory regime providing a robust and consistent approach to the supervision that promotes confidence in Ireland as a location for investment funds.
Due to changes in the global private equity market in both structure and relevant European legislation, there is a need to update the Investment Limited Partnership Act 1994. This objective has been included in the IFS2020 Action Plan which commits to developing amendments to the Investment Limited Partnership Act 1994 to make the structure more attractive to fund managers.
Consequentially, my Department sought and obtained approval from the Government for the preparation of Heads of Bill in 2017. The Heads of Bill have been sent to the Office of the Parliamentary Counsel and a drafter has been assigned to work on this.
The Bill appears on the legislative programme for 2018 and it is anticipated that the draft legislation will be developed in the second half of the year with the intention for the Bill to be considered by the House before the end of this year.
Consumer Protection
Ceisteanna (66)
Michael McGrath
Ceist:66. Deputy Michael McGrath asked the Minister for Finance if small and medium-sized enterprises are covered by the Central Bank's consumer protection code; and if he will make a statement on the matter. [21877/18]
Amharc ar fhreagraFreagraí scríofa
On consultation with the Central Bank, I can confirm that the General Principles of the Consumer Protection Code (the Code) apply in respect of all customers in the State, with customer defined as:
“ any person to whom a regulated entity provides or offers to provide a product or service the subject of this Code, and any person who requests such a product or service”.
The other chapters of the Code apply in respect of customers in the State who fall within the definition of ‘consumer’. ‘Consumer’ is defined as either of the following:
- “ a person or group of persons, but not an incorporated body with an annual turnover in excess of €3 million in the previous financial year (for the avoidance of doubt a group of persons includes partnerships and other unincorporated bodies such as clubs, charities and trusts, not consisting entirely of bodies corporate); or
- incorporated bodies having an annual turnover of €3 million or less in the previous financial year (provided that such body shall not be a member of a group of companies having a combined turnover greater than the said €3 million).”
This includes where appropriate, a potential ‘consumer’.
Please note, however, that certain provisions of the Consumer Protection Code apply only to personal consumers, defined as
“a consumer who is a natural person acting outside his or her business, trade or profession.
However, the Central Bank (Supervision and Enforcement) Act 2013 (Section 48) (Lending to Small and Medium-Sized Enterprises) Regulations 2015 (the SME Regulations), were published in December 2015. Regulated lenders (other than credit unions) have been required to comply with the SME Regulations since 1 July 2016, and in the case of credit unions, from 1 January 2017. These Regulations replaced the existing SME Code.
The SME Regulations aim to strengthen protections for small and medium sized enterprises (SMEs) when borrowing from regulated lenders, while also facilitating access to credit. They also set out a framework which regulated entities must comply with when dealing with SME borrowers in arrears and financial difficulties. SMEs are enterprises which employ fewer than 250 persons and have an annual turnover not exceeding €50 million, and/or an annual balance sheet not exceeding €43 million.
The SME Regulations apply to regulated entities engaged in relevant activities in the State. For the purposes of the Regulations, a ‘regulated entity’ means a regulated financial service provider providing relevant activities. ‘Relevant activities’ include:
- Providing or offering to provide credit to a borrower or from which a borrower is seeking to avail of credit;
- Entering into, offering to enter into or with which a borrower has sought to enter into a credit facility agreement, to which a borrower is a party or will be a party;
- Proposing or undertaking preparatory work for entering into a credit facility agreement with a borrower and any related activities;
- Providing or offering to provide an alternative arrangement; or
- Engaging in credit servicing activities.
Motor Insurance Costs
Ceisteanna (67)
Michael McGrath
Ceist:67. Deputy Michael McGrath asked the Minister for Finance when the next progress update will be published on the report into the cost of motor insurance; and if he will make a statement on the matter. [21878/18]
Amharc ar fhreagraFreagraí scríofa
The Fifth Progress Update was published on the Department of Finance website on 11 May 2018, together with an accompanying press release. This is the first such quarterly report to provide details on the implementation of the Report on the Cost of Employer and Public Liability Insurance, as well as continuing to outline developments in respect of the Report on the Cost of Motor Insurance recommendations.
In relation to the Liability Insurance Report, all eight actions scheduled for delivery in the first quarter of the year have been fully completed. Of the four actions in the Motor Report with a Q1 2018 deadline, one has been met in full and it is expected that at least two of the other three will be concluded during the second quarter. Further details can be found in the attached link.
www.finance.gov.ie/wp-content/uploads/2018/05/5th-Progress-Update-Q1-2018-Focus.pdf.
The Action Plan Monitoring Dashboard for the Motor Report currently indicates that 40 of the 50 separate deadlines set thus far have been met. Substantial work has also been undertaken in respect of the nine action points categorised as “ongoing”.
The main reason for the delays in the actions not fully completed on time is that most of these actions relate to large and far-reaching projects involving multiple stakeholders, which can lead in many instances to significant legislative implications which need time to be adequately dealt with such as, for instance, the National Claims Information Database.
However, aside from Action Point 2, which I believe has been satisfactorily addressed through a protocol agreed with Insurance Ireland, the rest of the action points continue to be worked upon in order to complete them as soon as possible.
It is planned at this juncture that the next Quarterly Update, which will focus in particular on the 14 actions across the two Reports with Q2 2018 deadlines, will be released before the end of July.
Motor Insurance Costs
Ceisteanna (68)
Michael McGrath
Ceist:68. Deputy Michael McGrath asked the Minister for Finance if recommendation 8 of the report on the cost of motor insurance has been completed; his views on the assessment of an organisation (details supplied) that the recommendation is covered by the Central Bank's consumer protection code; and if he will make a statement on the matter. [21879/18]
Amharc ar fhreagraFreagraí scríofa
The Fifth Progress Update, which provides details on the implementation of the Report on the Cost of Motor Insurance recommendations, was published on the Department of Finance website on 11 May 2018. This Fifth Progress Update confirms that Action Point 17 (associated with Recommendation 8), which calls upon Insurance Ireland to put in place a general protocol around the requirement for insurance companies to notify a policyholder of claims made against them before settlement, has not yet been completed.
The background to this position is that Insurance Ireland have argued that this recommendation is achieved through the application of the Consumer Protection Code (CPC) and that a previously agreed protocol between the Irish Insurance Federation (IIF – the predecessor to Insurance Ireland) and IBEC titled Communication Guidelines for Insurers & Policyholders - April 2003 - has been superceded.
It should be noted that much of which was in this aforementioned protocol covers what is required to implement fully recommendation 8 and in particular addresses what is a key missing feature in the CPC i.e. the absence of any requirement for policyholders to receive appropriate communication and engagement with their insurer in relation to claims made against their policies.
As a result, the Minister of State for Financial Services and Insurance, Michael D’Arcy TD, wrote to Insurance Ireland on this matter on 8 December 2017 to ask the insurance industry to fully implement this recommendation as soon as possible. A response to this letter was received on 3 April 2018 which reiterates Insurance Ireland’s position that the CPC is sufficient in their view.
In conclusion, it should be noted that my Department is continuing to pursue the implementation of Recommendation 8, in parallel with a related recommendation from the EL/PL Report. Options are being considered as to the best course of action for bringing the recommendations forward, given industry’s diverging opinion on the matter.
Motor Insurance Data
Ceisteanna (69)
Michael McGrath
Ceist:69. Deputy Michael McGrath asked the Minister for Finance the number of motor insurance policies entered into under the declined cases agreement in each month in 2017 and to date in 2018; and if he will make a statement on the matter. [21880/18]
Amharc ar fhreagraFreagraí scríofa
As the Deputy is aware, under the terms of the Declined Cases Agreement (DCA), which is adhered to by all motor insurers in Ireland, the insurance market will not refuse to provide insurance to an individual seeking motor insurance if he or she has approached at least three insurers and has not been able to obtain cover from them.
I am not responsible for the operation of the DCA and therefore I do not have direct access to the number of motor insurance policies entered into under the DCA process in 2017 and 2018 to date.
However, in order to be as helpful as I can, my officials contacted Insurance Ireland seeking the DCA application figures. In response, Insurance Ireland provided statistics on the number of cases it dealt with in 2017 and Q1 of 2018. In relation to these cases, Insurance Ireland has informed my officials that all applications submitted were accepted by Insurance Ireland for processing under the DCA. It has also stated that a quotation was secured for every applicant.
The month-by-month figures for 2017 are:
|
Month |
Total |
|
January |
113 |
|
February |
109 |
|
March |
126 |
|
April |
139 |
|
May |
147 |
|
June |
155 |
|
July |
136 |
|
August |
129 |
|
September |
121 |
|
October |
104 |
|
November |
86 |
|
December |
58 |
In relation to quarter 1 of 2018, there were 322 applications. I am informed that the month-by-month figures for Q1 and the figures for April will be available shortly.
Tracker Mortgage Examination Expenditure
Ceisteanna (70)
Michael McGrath
Ceist:70. Deputy Michael McGrath asked the Minister for Finance the costs incurred to date by the Central Bank in the tracker mortgage examination by the types of professional fees incurred and staff costs; the costs that will be reimbursed by bank, in tabular from; and if he will make a statement on the matter. [21883/18]
Amharc ar fhreagraFreagraí scríofa
The Central Bank has advised that the estimated costs incurred by the Bank in carrying out the Tracker Mortgage Examination to end December 2017 amounted to approximately €8.4m. This comprises an estimate of internal labour costs of €4.5m (but does not include an apportionment of indirect costs) and an estimate of €3.9m for directly attributable external costs (including third party external consultancies).
The Bank also indicates that, since 2016, third party external costs incurred by the Consumer Protection division of the Central Bank relating to the Examination have been ring-fenced and are recoverable in full from the entities involved. It is also worth noting that, through the Central Banks’s annual Industry Funding Levy process, the overall costs of financial regulation are aggregated and charged to the industry in accordance with defined recovery rates. The rates as set out in the annual Industry Funding Regulations reflect the recovery rates as agreed with the Minister.