Departmental Operations

Question No. 148 answered with Question No. 115.

Ceisteanna (147)

Jack Chambers

Ceist:

147. Deputy Jack Chambers asked the Minister for Finance if his Department has a disaster recovery plan, business continuity plan and-or disaster recovery sites; and if he will make a statement on the matter. [36244/19]

Amharc ar fhreagra

Freagraí scríofa (Ceist ar Finance)

My Department has developed a business continuity management system policy framework on business resilience and continuity management, and also has an incident management plan, which sets out the Department's pre-determined actions to providing a response system to an incident or emergency occurring that could potentially affect its operations. 

Work is currently being undertaken on business continuity management plans across a number of areas of the Department and representative staff recently undertook business continuity management training in August 2019.  

ICT systems within the Department are provided by the Office of the Government Chief Information Officer (OGCIO) under the Department of Public Expenditure and Reform, who have indicated that its ICT solutions have inbuilt resilience as a matter of course, and disaster recovery plans and sites. 

Question No. 148 answered with Question No. 115.

Tax Code

Ceisteanna (149)

Michael McGrath

Ceist:

149. Deputy Michael McGrath asked the Minister for Finance if there is flexibility for certain not-for-profit providers such as music schools and community organisations in the application of the Revenue Commissioners' guidance relating to the taxation of part-time lecturers, teachers and trainers (details supplied); and if he will make a statement on the matter. [36314/19]

Amharc ar fhreagra

Freagraí scríofa (Ceist ar Finance)

Chapter 4 of Part 42 of the Taxes Consolidation Act (TCA) 1997 imposes a legal obligation on all employers to make deductions at source under the PAYE system from the payment of emoluments to employees and to report these amounts to Revenue as they are being paid.

I am advised by Revenue that part-time lecturers/teachers/trainers are generally engaged under a contract of service (employee) as opposed to a contract for service (self-employed). Accordingly, payments made to such individuals should be made net of statutory deductions for Income Tax, USC and PRSI under the PAYE system.

Revenue has also confirmed to me that this position need not apply for periods up to 31 August 2019 in situations where a guest lecturer provides a ‘once off’ lecture (maximum of once or twice per year to the same body). Such lecture fees must of course be returned by the persons concerned under self-assessment rules.

This exception does not apply from 1 September 2019 and all payments made to guest lecturers from that date forward should be paid net of statutory deductions for Income Tax, USC and PRSI under the PAYE system. This is in accordance with the new administrative arrangements introduced for PAYE as part of the PAYE Modernisation project on 1 January 2019.

Revenue’s Tax and Duty Manual, which is available at TDM 05-01-11  contains further clarifications on this issue.

Pension Provisions

Ceisteanna (150)

Eamon Scanlon

Ceist:

150. Deputy Eamon Scanlon asked the Minister for Finance his views on a matter (details supplied) regarding taxation of German pensions; his views on whether persons should not have to pay twice for the same pension; and if he will make a statement on the matter. [36361/19]

Amharc ar fhreagra

Freagraí scríofa (Ceist ar Finance)

I am advised by Revenue that a person’s Irish tax position depends on the source of the taxable income involved and the tax residence and domicile position of the individual. For example, where a person is tax resident and domiciled in Ireland, s/he will be liable to Irish income tax on his or her worldwide income.  This is subject to any relief afforded by a Double Taxation Agreement (DTA). However, where a person is tax resident but not domiciled in Ireland, s/he will be liable to Irish income tax on Irish source income and foreign income to the extent it is remitted (brought into) the State.  This is also subject to any relief afforded by a DTA.  

Regarding the case in question, Revenue has confirmed that the tax returns filed by the taxpayer (and her deceased husband) for the years in question were completed on the basis of them both being Irish tax resident, but excluded information relating to their domicile status. When completing the tax returns for 2013 to 2018 (self-assessment), the taxpayer/s declared and paid Irish tax on their German Social Welfare Pension/s. The surviving spouse subsequently received a tax bill from the German tax authorities in respect of the same income. As Irish taxes were already paid on this income, the bill from the German authorities created a double taxation situation.

Article 17 of the Ireland/Germany DTA deals with pensions payable under social insurance legislation.  Specifically, Paragraph 2 of Article 17 provides sole taxing rights to Germany as the payments are made under German social insurance legislation. As such, the amounts involved in the case in question should not have been included on the self-assessment Irish tax returns filed for the relevant years.

The taxpayer is therefore entitled to seek amendment of the relevant returns. However, any such refund claim/s must be made in accordance with section 865(4) of the Taxes Consolidation Act 1997. This requires that claims must be made no later than the end of the fourth year following the end of the relevant tax year and Revenue has no discretion to operate outside of the legislation as set down.

Article 25 of the Ireland/Germany DTA provides that where a person has been taxed in a manner that is not in accordance with the provisions of the agreement, s/he may present a case to the Competent Authority in the State of residence with a view to obtaining agreement between the relevant States to resolve the position. Such a process is referred to as a Mutual Agreement Procedure (MAP)

Revenue has confirmed to me that the Irish Competent Authority will engage directly with the person’s representative with a view to determining if a MAP can be used to resolve the issue.

VAT Rate Application

Question No. 152 answered with Question No. 56.

Ceisteanna (151)

Michael Healy-Rae

Ceist:

151. Deputy Michael Healy-Rae asked the Minister for Finance if the VAT free limit will be increased (details supplied); and if he will make a statement on the matter. [36406/19]

Amharc ar fhreagra

Freagraí scríofa (Ceist ar Finance)

VAT is governed by the EU VAT Directive, with which Irish VAT law must comply. The VAT Directive provides that VAT registration thresholds may only be raised by Member States to maintain their value in real terms, that is, they may only be increased in line with inflation. Our VAT thresholds were increased to their current values, €37,500 for services and €75,000 for goods, on 1 May 2008 and as the Central Statistics Office figures show the consumer price index is below the level it reached in 2008, therefore it is not possible to increase these thresholds.

Ireland’s VAT registration thresholds for small enterprises and the self-employed are among the highest in the EU.

Question No. 152 answered with Question No. 56.

Primary Medical Certificates Eligibility

Question No. 154 answered with Question No. 103.

Ceisteanna (153)

Brendan Smith

Ceist:

153. Deputy Brendan Smith asked the Minister for Finance his plans to improve the criteria for the primary medical certificate; and if he will make a statement on the matter. [36538/19]

Amharc ar fhreagra

Freagraí scríofa (Ceist ar Finance)

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 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 represents a significant tax expenditure. Between the Vehicle Registration Tax and VAT foregone, and the fuel grant, the scheme cost €65m in each of 2016 and 2017, rising to €70m in 2018. This figure does not include the revenue foregone in respect of the relief from Motor Tax provided to members of the Scheme.  

I understand and fully sympathise with any person who suffers from a serious physical disability and can’t access the scheme under the current criteria. However, given the scope and scale of the scheme, any possible changes to it can only be made after careful consideration, taking into account the existing and prospective cost of the scheme as well as the availability of other schemes which seek to help with the mobility of disabled persons, and the interaction between each of these schemes.  

Accordingly, I have no plans to amend the qualifying medical criteria for the Disabled Drivers and Disabled Passengers Scheme at this time. 

Question No. 154 answered with Question No. 103.

Fiscal Policy

Ceisteanna (155)

Pearse Doherty

Ceist:

155. Deputy Pearse Doherty asked the Minister for Finance if funds from the contingency reserve fund established under the National Surplus (Reserve Fund for Exceptional Contingencies) Act 2019 can be withdrawn and used to fund supports for businesses exposed to markets affecting the UK's withdrawal from the European Union within the terms of the legislation and the fiscal rules; and if he will make a statement on the matter. [36622/19]

Amharc ar fhreagra

Freagraí scríofa (Ceist ar Finance)

The creation of the National Surplus (Exceptional Contingencies) Reserve Fund (known as the Rainy Day Fund) forms part of the Government’s policy to stabilise the public finances and increase the State’s resilience to external economic shocks.

The Fund is intended as a reserve which may be drawn upon under certain circumstances, outlined under section 9(2) of the Act, contingent on Government and Oireachtas approval. One criteria for drawdown is that it can be used to remedy or mitigate the existence of “exceptional circumstances” in the State. Under the Fiscal Responsibility Act 2012, such circumstances are defined as either a period of severe economic downturn or a period during which an unusual event outside the control of the State has a major impact on the financial position of the general government.

The Fund is intended, therefore, to be used as a defined-purpose instrument to address severe events, as opposed to the normal fluctuations within the economic cycle. This approach would align it with the current EU fiscal rules framework, whereby it could be accommodated as an “unusual event” under the existing Stability and Growth Pact provisions. Withdrawals from the Fund will be transferred directly to the Exchequer so as to support the State’s voted expenditure to address the specific downturn.

The Government has taken extensive actions to prepare for the fallout of Brexit including dedicated measures, and economic and fiscal polices to get Ireland Brexit ready in Budgets 2017, 2018 and 2019.   These policies include amongst others moving to fiscal balance, the rolling out of support schemes, and the provision of advice to businesses.  I would, therefore, envisage the National Surplus (Exceptional Contingencies) Reserve Fund only being used for an extreme outcome, i.e. a “tail-risk” Brexit and in advance of seeking approval to withdraw from the Fund, the magnitude of the impact must be properly considered. 

The Act deliberately does not describe specific events, such as Brexit or others, so as to give flexibility to Governments to withdraw from the Fund for all severe downturns, many of which are not possible to specify in advance.

Tax Reliefs Data

Ceisteanna (156)

Róisín Shortall

Ceist:

156. Deputy Róisín Shortall asked the Minister for Finance the projected cost in 2019 of the special assignee relief programme; the number of employers and employees availing of the scheme; the average benefit accruing to participants in the scheme at the last count; and the minimum salary level that applies to the scheme. [36679/19]

Amharc ar fhreagra

Freagraí scríofa (Ceist ar Finance)

The Special Assignee Relief Programme (SARP) was introduced in Budget 2012 as part of a strategy to promote Foreign Direct Investment into Ireland, and to allow us to compete internationally to attract highly skilled and mobile executives who act as key decision makers within organisations.  

The measure provides income tax relief on a portion of income earned by employees, who are assigned by their employer to work in Ireland, and who previously worked abroad for that employer for a minimum of six months. There is no exemption or relief from USC, and PRSI is payable where the individual is not liable to social insurance contributions in the home country. The minimum salary level applicable to the Scheme is €75,000 per annum, excluding all bonuses, commissions or other similar payments, benefits, or share based remuneration.

Due to variable elements involved, it is not possible for my Department or Revenue to provide a projected cost for the relief for 2019 which could be relied upon for accuracy.  I am advised by Revenue that 2016 is the latest year for which data are currently available on SARP. The cost of the scheme in that year was €18.1 million in respect of 793 individuals. On that basis, it can be assumed that the average benefit accruing to participants in the scheme for the year 2016 was €22,824.72.

Revenue have advised me that, according to their records, there were 249 unique employer register numbers recorded by the companies which submitted a SARP employer return in 2016. However, it must be noted that companies can operate different branches under several employer register numbers and that associated companies will also be counted separately.

Finally, as the Deputy may be aware, following on from concerns I had regarding the increasing cost of the incentive, I amended the SARP legislation in Finance Bill 2018 to reinstate an upper salary threshold at the level of €1 million. This change came into effect for new entrants to the programme from 1 January 2019 and for existing beneficiaries of the programme from 1 January 2020. 

In accordance with the Department of Finance Tax Expenditure Guidelines, SARP is currently the subject of an independent review, carried out by Indecon Economic Consultants, this year. The review exercise affords an opportunity to look at all elements of the relief and it also includes consultation with all relevant stakeholders. 

Excise Duties Yield

Ceisteanna (157)

Róisín Shortall

Ceist:

157. Deputy Róisín Shortall asked the Minister for Finance the estimated revenue in 2020 from increasing excise duty on diesel to the same level as that of petrol. [36680/19]

Amharc ar fhreagra

Freagraí scríofa (Ceist ar Finance)

I am advised by Revenue that the estimated yield from increasing Excise on diesel to the same level as that of petrol is shown on page 21 of the Revenue Ready Reckoner available at: https://www.revenue.ie/en/corporate/documents/statistics/ready-reckoner.pdf.

Pensions Data

Ceisteanna (158)

Róisín Shortall

Ceist:

158. Deputy Róisín Shortall asked the Minister for Finance the estimated revenue from reducing the maximum allowable pension fund to €1.7 million. [36681/19]

Amharc ar fhreagra

Freagraí scríofa (Ceist ar Finance)

The Standard Fund Threshold is the maximum allowable pension fund allowed at retirement for tax purposes and was introduced in Finance Act 2006 to prevent over-funding of pensions through tax-relieved arrangements.  

Information on the numbers and values of individual pension funds or on individual accrued benefits in pension schemes is not generally required to be supplied to Revenue.  Therefore, there is no readily available underlying data or methodology on which to base reliable estimates of any possible yield that might be realised from the reduction in the Standard Fund Threshold outlined.

VAT Yield

Ceisteanna (159)

Róisín Shortall

Ceist:

159. Deputy Róisín Shortall asked the Minister for Finance the estimated extent of below cost selling of alcohol here; the impact this has on VAT revenues; and the way in which this is tracked by his Department or others on behalf of the State. [36682/19]

Amharc ar fhreagra

Freagraí scríofa (Ceist ar Finance)

VAT returns are submitted to the Revenue Commissioners. As regards calculating the VAT impact of below cost sales of alcohol, separate figures are not available for input VAT on goods that were subsequently sold at a discount because traders’ VAT returns show only the total input VAT and the total output VAT for the period covered by the return.

National Training Fund

Ceisteanna (160)

Róisín Shortall

Ceist:

160. Deputy Róisín Shortall asked the Minister for Finance the projected revenue from the 0.1% increase in the national training fund levy in 2020; and the way in which this is factored in arriving at the net fiscal space position as set out in the Summer Economic Statement. [36683/19]

Amharc ar fhreagra

Freagraí scríofa (Ceist ar Finance)

As indicated in the Budget 2019 Tax Policy Changes the increase from 0.9 per cent to 1.0 per cent in the National Training Fund levy is expected to yield an additional €74m in 2020. The increase in the levy, therefore increases fiscal space as a discretionary revenue raising measure.

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. 

The above increase is included in the net discretionary revenue measures shown in the Stability Programme Update (SPU) 2019 (tables A6 and A8).

There have been no changes to discretionary revenue measures as presented in the SPU, therefore, this is included in the calculations underlying the 2019 Summer Economic Statement fiscal space table.

Stamp Duty

Question No. 162 answered with Question No. 115.

Ceisteanna (161)

Róisín Shortall

Ceist:

161. Deputy Róisín Shortall asked the Minister for Finance the amount raised in each of the past three years through the stamp duty on rental property in cases in which the full rent is above €2,500; and his plans to abolish the duty. [36686/19]

Amharc ar fhreagra

Freagraí scríofa (Ceist ar Finance)

I am advised by Revenue that the amount raised in each of the last three years through Stamp Duty on leases, where the consideration is greater than €2,500, is provided in the following table.  

Year

Stamp   Duty paid (million)

2018

€20.08

2017

€7.27

2016

€8.71

I assume that the Deputy is referring to the monthly residential rental threshold of €2,500 for all leases executed before 25 December 2017 and €3,333 for leases executed on or after that date.

As set out in Schedule 1 of the Stamp Duty Consolidation Act 1999, under "LEASE", Stamp Duty is not payable on a lease for a residential house or apartment if:

- the rent is €40,000 or less per year (€30,000 if the lease was executed before 25 December 2017), and

- the period of the lease is 35 years or less, or is for an indefinite period.

I am advised by Revenue that the amount raised in each of the last three years through Stamp Duty on residential leases is provided in the following table.  

Year

Stamp Duty paid (million)

2018

€0.14

2017

€0.2

2016

€0.15

I have no plans at this time to amend the legislation on this Stamp Duty. 

Question No. 162 answered with Question No. 115.

Research and Development Supports

Ceisteanna (163, 164)

Robert Troy

Ceist:

163. Deputy Robert Troy asked the Minister for Finance the number of firms by size (details supplied) that have applied for the knowledge development box scheme for SMEs since being established in tabular form. [36845/19]

Amharc ar fhreagra

Robert Troy

Ceist:

164. Deputy Robert Troy asked the Minister for Finance the number of firms by size (details supplied) that have applied for the research and development tax credit in each of the years 2016 to 2018 and to date in 2019, in tabular form. [36846/19]

Amharc ar fhreagra

Freagraí scríofa (Ceist ar Finance)

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

The most recent data on the annual cost and the number of claimants of the Knowledge Development Box (KDB) for the years 2016 and 2017 are published on page 18 of Revenue’s paper on 2018 Corporation Tax payments and 2017 Corporation Tax returns. This information is available at www.revenue.ie/en/corporate/documents/research/ct-analysis-2019.pdf.

In this regard, the Deputy may be aware that a claimant company has a period of up to 24 months to make a claim for KDB relief. Therefore, more claims in respect of the year ended 31 December 2017 may be made by September 2019.

I am further advised that, due to the small number of KDB claims and Revenue’s obligation to protect the confidentiality of taxpayer data, it is not possible to provide information in respect of the size of the firms availing of the relief.

Information in respect of the tax cost and number of claimants of the Research and Development (R&D) tax credit by size of firm in respect of the years 2012 to 2017, the most recent year for which comprehensive data are available, is published on the Revenue website at:

https://www.revenue.ie/en/corporate/information-about-revenue/statistics/tax-expenditures/r-and-d-tax-credits.aspx.

Information in respect of 2018 will be published in 2020 when the returns have been filed and analysed.

Insurance Costs

Ceisteanna (165)

Brendan Smith

Ceist:

165. Deputy Brendan Smith asked the Minister for Finance his plans to implement further recommendations of the cost of insurance working group in view of the escalating costs of insurance for many sectors; and if he will make a statement on the matter. [36878/19]

Amharc ar fhreagra

Freagraí scríofa (Ceist ar Finance)

At the outset, as the Deputy is aware neither I, nor the Central Bank of Ireland, can interfere in the provision or pricing of insurance products, as these matters are of a commercial nature, and are determined by insurance companies based on an assessment of the risks they are willing to accept.  This position is reinforced by the EU framework for insurance which expressly prohibits Member States from adopting rules which require insurance companies to obtain prior approval of the pricing or terms and conditions of insurance products.  Consequently, I am not in a position to direct insurance companies as to the price or the level of cover to be provided either to consumers or businesses.  A further constraint is the fact that for constitutional reasons, I cannot direct the courts as to the award levels that should be applied.  

While there is unfortunately no quick fix solution to this complex matter, I wish to re-emphasise however that this issue remains a priority for the Government and we have been taking a range of actions.  The Cost of Insurance Working Group (CIWG), which was established in July 2016, and which produced two reports, is continuing to work to implement the recommendations of the Cost of Motor Insurance Report and the Cost of Employer and Public Liability Insurance Report.  Its most recent Progress Update, the Ninth, was published in July 2019 and shows that the vast majority of recommendations and actions due by Q2 2019 have been completed.  To that end, the key achievements to date from the two reports, including the following: 

- The establishment of the Personal Injuries Commission and the publication of its two reports, which included a benchmarking of award levels between Ireland and other jurisdictions for the first time. This showed that award levels for soft tissue injuries in Ireland were 4.4 times higher than in England and Wales;

- The enactment of the Judicial Council Act 2019, in July which provides for the establishment of a Personal Injuries Guidelines Committee.  It is now a matter for the Judiciary to put in place the Judicial Council and to operationalise the Personal Injuries Guidelines Committee, which will introduce new guidelines to replace the Book of Quantum.  While the Government cannot interfere in their deliberations, I would hope that the Judiciary will recognise the importance of this issue and prioritise it accordingly;

- The commencement and prioritisation by the Law Reform Commission (LRC) of its work to undertake a detailed analysis of the possibility of developing constitutionally sound legislation to delimit or cap the amounts of damages which a court may award in respect of some or all categories of personal injuries, as part of its Fifth Programme of Law Reform;

- The establishment of the National Claims Information Database in the Central Bank of Ireland (CBI)to increase transparency around the future cost of private motor insurance.  The CBI is due to make its first report by the end of 2019, and will also make recommendations to me regarding potentially expanding its scope to include employer and public liability insurance; Reforms to the Personal Injuries Assessment Board through the Personal Injuries Assessment Board (Amendment) Act 2019 to strengthen the powers of PIAB around compliance with its procedures;

- Commencement of the amendments to Sections 8 and 14 of the Civil Liability and Courts Act 2004 to align the timeframes by which claims should be notified to businesses with GDPR time limits on the keeping of CCTV footage to make it easier for businesses and insurers to challenge cases where fraud or exaggeration is suspected;

- The reform of the Insurance Compensation Fund to provide certainty to policyholders and insurers, resulting from the failure of Setanta Insurance; and,

- Various reforms of how fraud is reported to and dealt with by An Garda Síochána, including increased co-ordination with the insurance industry, as well as the recent decision by the Garda Commissioner to develop a divisional focus on insurance fraud which will be guided by the Garda National Economic Crime Bureau (GNECB) which will also train Gardaí all over the country on investigating insurance fraud, and the recent success under Operation Coatee, which targets insurance-related criminality. 

 I believe that these reforms are having a significant impact with regard to private motor insurance (CSO figures from July 2019 show that the price of motor insurance is now 24.5% lower than the July 2016 peak).  The Government is determined to continue working to ensure that these positive pricing trends can be extended to other forms of insurance, particularly those relevant to businesses.

I would like to assure the Deputy that the Cost of Insurance Working Group will continue to focus on implementing the remaining recommendations of the Report on the Cost of Employer and Public Liability Insurance in parallel with implementing those from the Report on the Cost of Motor Insurance. I also believe that it is important to emphasise that the single most essential challenge which must be overcome if there is to be a sustainable reduction in insurance costs particularly for small businesses is to bring the levels of personal injury damages awarded in this country more in line with those awarded in other jurisdictions, and the establishment of the Judicial Council in the coming months is very important in this regard. 

In addition and in light of all of the reforms that have taken place or are soon to take place, my colleague, Minister of State D’Arcy, has been engaging with insurers in order to seek a commitment that they will reduce premiums and widen their risk appetite to reflect savings made or potential savings in the coming years, in particular if there is a recalibration of award levels downwards.  I am also encouraged by the comments made by a number of insurers at the Finance, Public Expenditure and Reform and Taoiseach Oireachtas Committee in July about the passing on of savings arising from a recalibration of award levels downwards.  

In conclusion, I am hopeful that the cumulative effects of the completion of the two Reports’ recommendations including a reduction in award levels will lead to reductions in pricing in particular for small businesses and a more competitive and sustainable insurance market.

Financial Services Regulation

Ceisteanna (166)

Bernard Durkan

Ceist:

166. Deputy Bernard J. Durkan asked the Minister for Finance the extent to which he continues to monitor the activities of the financial organisations or their agents in relation to penalised borrowers (details supplied); and if he will make a statement on the matter. [36913/19]

Amharc ar fhreagra

Freagraí scríofa (Ceist ar Finance)

Both the Government and the Central Bank of Ireland (Central Bank) are both strongly of the view that the current regulatory framework provides sufficient protections to consumers. 

The Code of Conduct on Mortgage Arrears 2013 (CCMA) provides a strong consumer protection framework, aimed specifically at the process to be followed by relevant firms, to ensure borrowers in arrears or pre-arrears in respect of a mortgage loan secured on a primary residence are treated in a timely, transparent and fair manner. Banks, retail credit firms and credit servicing firms are all required to comply with the CCMA as a matter of law.

The CCMA sets out the Mortgage Arrears Resolution Process, (MARP), a four-step process that regulated entities must follow:

Step 1: Communicate with borrower;

Step 2: Gather financial information;

Step 3: Assess the borrower’s circumstances; and

Step 4: Propose a resolution

The regulated entity must base its assessment of the borrower’s case on the full circumstances of the borrower including personal circumstances, overall indebtedness, information provided in the Standard Financial Statement, current repayment capacity and past repayment history. In order to determine which options for alternative repayment arrangements (ARAs) are viable for each particular case, the regulated entity must explore all of the options for ARAs offered by that regulated entity.

Where an ARA is offered to the borrower, the regulated entity must inform the borrower of the reasons why the ARA offered is considered to be appropriate and sustainable for the borrower’s individual circumstances. Where the borrower’s circumstances have changed, in line with Provision 40 of the CCMA, any change to the ARA must be appropriate and sustainable for the borrower’s circumstances.

It should be noted that neither I, nor the Central Bank can interfere with the strategy,  commercial decisions or the legitimate contractual rights of regulated entities where such firms are complying with their regulatory and contractual obligations. Regulated entities are entitled to rely on their contractual rights and make their own commercial decisions while always adhering to consumer protection legislation.

Stamp Duty

Ceisteanna (167, 168)

Róisín Shortall

Ceist:

167. Deputy Róisín Shortall asked the Minister for Finance the estimate of the first and full year yield from a 2% points increase in stamp duty on non-residential property transfers on all amounts in excess of €500,000. [36929/19]

Amharc ar fhreagra

Róisín Shortall

Ceist:

168. Deputy Róisín Shortall asked the Minister for Finance the estimate of the first and full year yield from an increase to 5% for stamp duty on residential property transfers on all amounts in excess of €1 million. [36930/19]

Amharc ar fhreagra

Freagraí scríofa (Ceist ar Finance)

I propose to take Questions Nos. 167 and 168 together.

I am advised by Revenue that a Ready Reckoner providing estimated impacts for potential changes to a wide range of taxes and duties  is available on the Revenue website at https://www.revenue.ie/en/corporate/documents/statistics/ready-reckoner.pdf.

On page 19 of the Ready Reckoner, a wide range of detailed information is shown on changing the Stamp Duty rate applicable to properties transferred in excess of various thresholds.

While the Ready Reckoner does not show the particular costings requested by the Deputy, they can be estimated on a straight-line basis from those displayed. It should be noted that these Ready Reckoner estimates do not reflect the impact of any behavioural change.

A first year cost is not available as it would be dependent on the date of introduction of any change.

Tax Data

Ceisteanna (169)

Róisín Shortall

Ceist:

169. Deputy Róisín Shortall asked the Minister for Finance the estimate of the first and full year yield from each percentage point increase in the minimum effective tax rate of persons earning more than €400,000 per annum. [36931/19]

Amharc ar fhreagra

Freagraí scríofa (Ceist ar Finance)

I am advised by Revenue that a 1% increase in the average effective rate of income tax on taxpayer units with gross incomes in excess of €400,000 would raise an estimated €37m and €49m on a first and full year basis respectively.

This estimate is based on actual data for 2017, the latest year for which data are currently available. Taxpayers who are married or in a civil partnership are counted as one taxpayer unit and their incomes are combined.

Tax Data

Ceisteanna (170)

Róisín Shortall

Ceist:

170. Deputy Róisín Shortall asked the Minister for Finance the estimate of the first and full year cost of refunding unused income tax credits to all low paid workers. [36932/19]

Amharc ar fhreagra

Freagraí scríofa (Ceist ar Finance)

The matter of refundable tax credits was looked at in some detail in 2002 by the Working Group established under the Programme for Prosperity and Fairness. The Group was chaired by the Department of Finance and included representatives from ICTU, IBEC, the various farming organisations, the Community and Voluntary Pillar, relevant Government Departments and the Office of the Revenue Commissioners.

The Working Group found that there were significant disadvantages with such a system.  These included the potential negative impacts on the incentive to work, labour supply, labour force participation and overall productivity and output.  The Commission on Taxation in its 2009 report also did not recommend the introduction of refundable tax credits.

Furthermore, the cost of providing refundable tax credits would be extremely high.  Revenue have in the past estimated the cost of providing a limited refundable tax credit, that is, refundable only to those currently on the tax record, at approximately €2 billion per annum.

I am aware that certain Groups have proposed different schemes for refundable tax credits which are based on a number of arbitrary restrictions such as age, hours worked, income and PRSI contributions in the previous year. These Groups have claimed much lower costs for these schemes.  However, my Department and the Revenue would dispute these lower costings. 

What is not in doubt, however, is that refundable tax credits can have a negative impact on the incentive to work.  In these times when we need to encourage people to join the workforce and remain in the workforce very significant difficulties exist with the use of refundable tax credits.

The income tax and USC changes I introduced in the last number of Budgets will benefit all those who currently pay income tax and/or USC.  The minimum wage has also been increased over recent Budgets and now stands at €9.80 per hour, in an effort to support those on lower incomes.  Continued progress in this area will be made in the context of resources available in Budget 2020 balanced against all of the competing demands.

Tax Data

Ceisteanna (171)

Róisín Shortall

Ceist:

171. Deputy Róisín Shortall asked the Minister for Finance the estimate of the first and full year yield from standard-rating all discretionary tax reliefs and expenditures that cost in excess of €10 million per annum in revenue foregone; and the breakdown for each tax relief and expenditure. [36933/19]

Amharc ar fhreagra

Freagraí scríofa (Ceist ar Finance)

I am advised by Revenue that the full year estimated yields from standard-rating discretionary tax reliefs and expenditures, which currently apply at the marginal rate, and cost in excess of €10 million per annum in revenue foregone, are as follows.

Reliefs and Expenditures

Full Year Yield (€m)

Approved Profit-Sharing Schemes

24

Dispositions (including Maintenance Payments)

6

Donations to Charities and Approved Bodies

12

Employment and Investment Incentive

10

Exempt Income Rent A Room

0.7

Exemption of Certain Earnings of Writers, Composers and Artists

5

Exemption of Interest on Savings Certificates, National Instalment Saving & Index Linked Saving Bonds

27

Health Expenses (Nursing Homes)

7

Carry forward of excess relief under the High-Income Earners Restriction

49

Pension Contributions

553

Rental Deduction for Leasing of Farm Land

5

These yields are based on actual 2017 data, except for the High-Income Earners Restriction Carry Forward estimate, which is based on 2016 data. It is not possible to provide a first year costing due to the nature of the data utilised and how it is maintained on Revenue’s systems.