Written Answers Nos. 62 - 82
62. Deputy Jackie Cahill asked the Minister for Finance the number of owners of foster mares registered for VAT in each of the years 2015 to 2019 and to date in 2020, in tabular form; the amount of VAT refunded annually for the same years; and if he will make a statement on the matter. [2735/20]
Amharc ar fhreagraI am advised by Revenue that traders are not required to separately identify the yield generated from a particular activity or product type on their VAT returns.
Therefore, the information is not available to provide the number of owners of foster mares who registered for VAT or the amount of VAT that was refunded to them.
63. Deputy Darragh O'Brien asked the Minister for Finance the way in which his Department has used the moneys the State received from the sale of its stake in Aer Lingus; and if he will make a statement on the matter. [2943/20]
Amharc ar fhreagraThe proceeds of the sale of the state's shareholding in Aer Lingus have been used to establish the Connectivity Fund which is managed by the Ireland Strategic Investment Fund (ISIF). The Connectivity Fund is being invested on a commercial basis as a sub portfolio of the ISIF, and consistent with the overall ISIF double bottom line mandate which is to invest for both commercial return and economic impact.
ISIF have advised me that it has completed four investments under the Connectivity Fund, namely:
- A $28 million co-investment in Aqua Comms DAC, a company that has developed fibre optic cables linking the USA, Ireland (Killala, Mayo) and the UK.
- A €35 million investment as a strategic domestic partner for daa plc long-term bond issuance, supporting construction of a new runway at Dublin Airport.
- Provision of a long term €14 million debt facility to finance a runway surfacing project at Shannon Airport - a crucial regional and national infrastructure asset. This debt facility was signed in early 2017 and the runway resurfacing project has been completed on time and within budget.
- An €18 million Junior Debt facility to support the relocation of the Port of Cork from Tivoli to Ringaskiddy. The ISIF debt facility was provided alongside senior debt from Allied Irish Banks and the European Investment Bank and was structured to ensure certainty of funding for the Port Company. It also has tailored flexibility to meet the requirements of this nationally and regionally significant project.
These investments bring the total deployed under the Connectivity Fund to over €90 million. ISIF have informed me that there are a range of further pipeline connectivity-based investments on which it is currently working.
ISIF’s refocused strategy targets five priority themes, one of which is investment to support regional development. As such, the ISIF have advised that the Connectivity Fund will henceforth be focused on commercial investments that support improved regional connectivity.
64. Deputy Róisín Shortall asked the Minister for Finance if an assessment of the potential economic impact of Covid-19 here has been undertaken; and if he will make a statement on the matter. [3221/20]
Amharc ar fhreagraAt the outset, it must be stressed that it is difficult to quantify the global and domestic economic impacts of the Covid19 outbreak at this stage. This is because the impact will depend on several factors, not least the duration of the epidemic as well as the containment measures put in place to limit its spread. These are simply impossible to estimate and, accordingly, it is extremely difficult to quantify the macroeconomic impact at this point in time.
Nevertheless, the OECD has estimated that, in a scenario where economic disruption is mainly confined to China, with only limited spill-overs to other regions, measures put in place to contain the Covid19 virus could take ½ a percentage point (pp) off the growth rate of the global economy this year.
I would stress, however, that this is a very benign scenario - it is also based on the assumption that the impact is mostly contained to the first quarter of this year, which appears a somewhat heroic assumption. In a broader contagion scenario, where the economic fall-out is longer-lasting and more widespread, the OECD estimates that this could take 1½ percentage points off the global growth rate.
As small and export-oriented, the Irish economy is particularly sensitive to external economic conditions. Over the medium-term, the pass-through of a global shock to the domestic economy tends to be broadly one-for-one - i.e. if world demand falls by 1 pp then, over the medium term, Irish economic activity is c. 1 pp below what would otherwise have been the case – with a less than one-for-one impact in the short-term. Slower growth would, in turn, have negative consequences for the labour market and the public finances.
While difficult to quantify at this stage, there are likely to be negative impacts for the Irish economy across a range of sectors. An increasingly integrated world economy means that supply-chains are also increasingly integrated, with many being ‘just-in-time’. Falling production of intermediate goods in China is now affecting the final output in other countries that will also likely impact production facilities in Ireland. In terms of direct trade links, the share of goods trade with China is around 6 per cent of total trade, based on preliminary data for last year.
However, indirect exposure to China is potentially more significant. The euro area is Ireland’s largest trading partner, accounting for close to a third of total exports. In turn, China accounts for 9 per cent of total euro area goods and services trade.
My Department is monitoring the situation closely and will prepare updated economic forecasts over the next month or so, taking into account all of the latest available information. It must be stressed, however, that in the current environment, there is much more uncertainty than normal attached to any set of forecasts.
65. Deputy Michael McGrath asked the Minister for Finance if his attention has been drawn to the fact that certain taxi drivers are receiving insurance quotations for their vehicle that are more than double the quotations being received from other insurance providers; the reason such a large discrepancy can exist; and if he will make a statement on the matter. [2564/20]
Amharc ar fhreagraAt the outset the Deputy should note that neither I, as Minister for Finance, nor the Central Bank of Ireland can interfere in the provision or pricing of insurance products or have the power to direct insurance companies to provide cover to specific individuals or businesses. This position is reinforced by the EU framework for insurance (the Solvency II Directive) which expressly prohibits Member States from doing so.
Having said that, in terms of the insurance market and pricing, my Department has been previously advised that insurers, in making their individual decisions on whether to offer cover and what terms to apply, will use a combination of rating factors, which include the age of the vehicle, as well as the type of vehicle, the age of the driver, the relevant driving experience, the claims record, the number of drivers, the requirement to use telematics technology, and how the car is used. Insurers do not all use the same combination of rating factors, and as a result prices and availability of cover varies across the market. In addition, insurers will price in accordance with their own past claims experience overall.
In the case of taxi drivers, I understand that insurers take into account the nature of the taxi business, which involves driving for hire or reward extensively and in their view this has a much higher risk of injury claims from passengers and other road-users as a result.
It should also be noted that the number of taxi and hackney drivers utilising the Insurance Ireland Declined Cases Agreement fell from 375 in 2016 to 205 in 2019, which suggests increased stability in the market and greater availability of insurance for drivers.
Finally, this particular price differential highlighted by the Deputy reinforces the importance of businesses and consumers shopping around for the best value insurance product.
66. Deputy Michael McGrath asked the Minister for Finance the position regarding the operation of the death grant scheme by credit unions; if same is supported by his Department and the Central Bank; and if he will make a statement on the matter. [2566/20]
Amharc ar fhreagraFirstly, I am assuming that the Deputy's question is referring to the Death Benefit Insurance schemes operated by credit unions.
Many credit unions participate in Death Benefit Insurance schemes whereby a payment, intended to assist with funeral expenses, is made following the death of a member. Death Benefit Insurance is provided by insurance firms. The Central Bank has informed me that it is aware that some credit unions discharge some or all of the cost of the insurance on behalf of its members, while other credit unions have adopted a member pay approach. Central Bank credit union regulations do not place any specific requirements on credit unions that participate in Death Benefit Insurance schemes.
The Central Bank have also informed me that their vision for the credit union sector is “Strong Credit Unions in Safe Hands”. The Central Bank’s vision underpins its statutory mandate to ensure the protection by each credit union of the funds of its members and the maintenance of the financial stability and well-being of credit unions generally. In undertaking its statutory mandate and responsibilities towards credit unions, the Central Bank recognises the important financial and social role credit unions play in Ireland.
As Minister for Finance, I recognise the important role of credit unions as a volunteer co-operative movement in Ireland and the Government's priorities remain the protection of members' savings, the financial stability of credit unions and the sector overall; and the Government is determined to continue to support a strengthened and growing credit union movement. As Minister for Finance I have no role in the provision of Death Benefit Insurance by the credit unions.
67. Deputy Michael McGrath asked the Minister for Finance the status of the implementation of the options set out in the September 2017 report of the working group on the tax and fiscal treatment of rental accommodation providers; his views on the implementation of the remaining options; and if he will make a statement on the matter. [2569/20]
Amharc ar fhreagraThe Report of the Working Group on the Tax and Fiscal Treatment of Landlords was submitted to me for consideration in September 2017, in advance of its publication on Budget Day, 10 October 2017. The report put forward options for further consideration, rather than recommendations, and any further consideration would require the participation of several Departments and organisations, including my own Department. The ten options are split into short, medium and long-term options. Five potential short-term options were identified as measures which could potentially be implemented within 18 months, i.e. within Budgets 2018 and 2019.
One short-term option was to increase the mortgage interest deduction available to landlords. In this context, it should be noted that in Budget 2017, a phased unwinding of the restriction on interest deductibility over five years for all residential landlords was initiated. The second step, an increase from 80% to 85% deductibility, took effect from 1 January 2018. Budget 2019 accelerated progress in this area and, from 1 January 2019, the restoration of full mortgage interest deductibility for landlords of residential property has been in place.
A further option was to consider introducing Local Property Tax (LPT) deductibility for landlords. Last year, the report of the interdepartmental review of LPT noted that LPT is a relatively small expense and therefore is unlikely to make a significant difference to the position of any individual landlord in cash terms and so may not be regarded by landlords as a sufficient measure to encourage them to stay in or enter the rental market. The report also found that the measure would also have a deadweight cost in respect of landlords who do not intend to leave the rental market and would create a more favourable position for landlords of property compared to owner-occupiers, as owner-occupiers cannot claim a tax deduction for LPT.
In Budget 2018 I introduced another of the short-term options, deductibility for pre-letting expenditure for previously vacant properties. This measure applies to residential premises which have been vacant for at least 12 months and which are then let after the date of the passing of the Finance Act 2017, i.e. after 25 December 2017. The expenditure is allowed as a deduction against rental income from that premises. It applies to expenses that would be allowable if they had been incurred while the property was let, such as the cost of repairs, insurance, maintenance and management of the property. Certain limitations are in place regarding this measure, for example the expenditure must have been incurred in the 12 months before the premises is let as a residential premises. The total deduction allowed is capped at €5,000 per vacant premises and the deduction will be clawed-back if the property ceases to be let as a residential premises within four years of the first letting. I prioritised this option as it was specifically designed to encourage an overall increase in housing supply by bringing currently vacant property back into residential use.
The final short-term option was to improve the collection and sharing of data on the rental accommodation sector. A significant issue that hampered the progress of the Working Group was a lack of robust data on various elements of the housing market, due to the differing metrics used by the various agencies. The Housing Analytics Group, chaired by the Department of Housing, Planning and Local Government, is currently active and a number of Departments and agencies are involved in its work, including the Residential Tenancies Board, the Central Statistics Office (CSO), Revenue and the Department of Finance.
Five of the options put forward in the report were medium-term and long-term options. Medium-term options are measures which work with the current tax system but might take longer to develop and implement, and as such would require a longer lead-in period. The long-term options look at the potential for more fundamental changes to the tax system, and so would require significantly greater resource commitments to progress. Consideration of these options will continue within the relevant time frames.
As the Deputy will be aware, taxation is only one of the policy levers available to the Government through which to boost rental and overall housing supply and that, in line with the Tax Expenditure Guidelines, consideration of whether a tax measure is the most appropriate policy tool for a given purpose would be required. Ireland’s past experience with tax incentives in the housing sector strongly suggests the need for a cautionary stance when considering intervention in the rental sector. There are many competing priorities which must be considered when deciding which policy measures to introduce and the rental sector is just one of many other sectors that may require assistance and intervention.
68. Deputy Michael McGrath asked the Minister for Finance the number of personal and business credit cards in operation here; the proportion of credit cards in cases in which the consumer regularly ends up paying interest; the level of arrears or overdue repayments in respect of the cards; the amount of stamp duty collected annually on same; and if he will make a statement on the matter. [2570/20]
Amharc ar fhreagraThe Central Bank publishes data on its website for the number of credit cards in Ireland, and it reports that there were 1,579,561 active credit cards in issue as of January 2020. I am informed by the Central Bank that it does not publish data on the number of credit cards with an interest bearing balance, on arrears or on overdue repayments on credit cards.
I am advised by Revenue that information in relation to the yield from stamp duty, including the amount from credit cards, can be found on the statistics page of the Revenue website. Stamp duty receipts, representing matured tax liabilities, are recorded as €40.63 million for 2018, the latest year for which figures are confirmed. I am informed by Revenue that the table will be updated with figures for 2019 when these become available.
69. Deputy Michael McGrath asked the Minister for Finance the details of the company running the Central Credit Register; the location in which it is based; if the system is operating smoothly; if not, if there are operational difficulties or delays; and if he will make a statement on the matter. [2573/20]
Amharc ar fhreagra70. Deputy Michael McGrath asked the Minister for Finance the length of time a consumer has to make a repayment beyond the normal due date of the repayment before a late payment is recorded against their personal record in the context of the Central Credit Register; if the same provision applies in respect of non-standard repayments; and if he will make a statement on the matter. [2574/20]
Amharc ar fhreagraI propose to take Questions Nos. 69 and 70 together.
The Central Credit Register (CCR) was established by the Central Bank of Ireland (the Bank) under the Credit Reporting Act 2013. Following a public procurement process, the Bank signed a contract with CRIF Ireland Ltd, 1st floor, Adelphi Plaza, Georges Street Upper, Dun Laoghaire, Co Dublin (a wholly owned subsidiary of CRIF S.p.A) to build and operate the CCR in February 2015. The Bank has advised me that no operational difficulties have been experienced to date and that CCR systems are operating as expected.
In relation to CCR reporting, the Bank advises that in respect of "standard frequency loans" (i.e. where the payment frequency is daily, weekly, fortnightly four weekly or monthly) information will be reported to include the application of a "grace period" of one month. The grace period acts as a practical buffer so as to avoid the reporting of technical arrears by a CIP over which a Credit Information Subject (CIS) may have little control. In relation to less frequent loan payments (e.g. quarterly, annually etc.) there is time for a CIP to check that everything is in order prior to the payment falling due and consequently no "grace period" is applied to these loan types.
71. Deputy Michael McGrath asked the Minister for Finance the costs incurred to date with regard to the Central Bank inquiry pursuant to Part IIIC of the Central Bank Act 1942, in respect of a former building society (details supplied) and certain persons in its management; the cost of Central Bank staff involved in the inquiry; the estimated final cost of the inquiry; if the costs can be recouped; the date the Central Bank commenced the inquiry; when it will be concluded; the status of the work of the inquiry; the planned further modules of the inquiry; and if he will make a statement on the matter. [2575/20]
Amharc ar fhreagraAs the Deputy will be aware, Part IIIC of the Central Bank Act 1942 (as amended) (“the Act”), provides that the Central Bank may hold an inquiry to determine whether or not a financial service provider is committing or has committed a suspected prescribed contravention. The Central Bank may also hold an inquiry to determine whether or not a person concerned in the management of a regulated financial service provider is participating or has participated in the commission of a suspected prescribed contravention by the financial service provider.
On 4 February 2015, the Central Bank appointed Marian Shanley, Ciara McGoldrick and Geoffrey McEnery to act as Inquiry Members in the Irish Nationwide Building Society (INBS) Inquiry. On 9 July 2015, the Central Bank issued a Notice of Inquiry to the successors of INBS and to five persons concerned in the management of INBS.
The Inquiry Members made a decision to deal with the Inquiry by way of four modular hearings. Hearing of evidence in three of the modules has concluded and work is continuing to fully conclude these modules. The final module involves consideration of a number of aspects of INBS’ commercial lending function, and the Inquiry Members are continuing preparations for the hearing of this module.
The Central Bank is not currently in a position to disclose when the Inquiry is likely to conclude.
As the Inquiry is ongoing, the Central Bank has stated that it will not be commenting on estimated final costs of the Inquiry at this time, however it is intended that these costs will be disclosed following the conclusion of the Inquiry.
72. Deputy Michael Healy-Rae asked the Minister for Finance if he will address a matter (details supplied) regarding credit unions; and if he will make a statement on the matter. [2613/20]
Amharc ar fhreagraFurther to parliamentary question numbers 48 of 14 November and 126 of 19 November 2019, I would like to reiterate that it would not be appropriate for me to make a comment on a specific case. It is also important to note that the Probate Office of the High Court deals with matters relating to probate and as such is the responsibility of the Minister for Justice and Equality.
However, the Deputy may also wish to note that under section 21 of the 1997 Act, a credit union member may nominate a third party (e.g. a family member) to be the recipient upon the death of the member to the whole or part of the member’s property that they have in the credit union at the time of their death.
The 1997 Act imposes a statutory limit of €23,000 on the amount that can be passed by way of a nomination. Thus, if at the date of the nominator's death the amount of the member’s property in the credit union exceeds €23,000, the credit union may only dispose any property up to the value of €23,000. The effect of these provisions are that any nomination up to €23,000 will pass outside the terms of any will. Any sum in excess of this will revert to and be an asset of the estate, which needs to be distributed under the terms of the will or the rules of succession where there is no will.
The Central Bank have also advised me that in order to be registered a credit union must have a set of rules. Under section 15 of the Credit Union Act, 1997 the registered rules of a credit union bind all members. In some cases these rules specifically set out the credit union's approach to the nomination of property and the statutory limit under the 1997 Act.
The Deputy may also wish to note that Section 23 of the Credit Union Act 1997 as amended (1997 Act) provides for the provision of small payments on death. Under section 23 if a member of a credit union dies and, at his death, his property in the credit union does not in the whole exceed €15,000 and is not the subject of a nomination under section 21 the board of directors of the credit union may, without letters of administration or probate of any will, distribute that property among such persons as appears to the board (on such evidence as they consider satisfactory) to be entitled by law to receive it.
Ordinarily the production of a grant of probate would be required to release funds from a bank account to the personal representative, irrespective of the amount. However, if a person dies leaving small amounts of money in a bank, the bank may agree to release the funds without the necessity for a grant of probate.
While most applicants instruct a solicitor to process their application for a grant of probate, personal applications can also be made to the Probate Office of the High Court for a grant of probate.
If an individual is not satisfied in any of their dealings with a financial services provider the individual may make a complaint to the provider’s internal complaint resolution process. If they are not satisfied with the outcome of the complaint, they can then make a complaint to the independent Financial Services and Pensions Ombudsman. Investigations by the Ombudsman are free of charge to the complainant. Further information on the Financial Services and Pensions Ombudsman can be found at www.fspo.ie.
Furthermore, the Central Bank have informed me that while they cannot comment on individual cases, where a person has good reason to believe that a firm regulated by the Central Bank of Ireland, or an individual within such a firm, is involved in wrongdoing within an area it regulates, they can report it to the Central Bank. In accordance with Section 33AK of the Central Bank Act 1942 (as amended), the Central Bank cannot disclose the details of any action that it might take on foot of information provided to it.
73. Deputy Sean Fleming asked the Minister for Finance the number of staff employed by the Revenue Commissioners at a location (details supplied); and if he will make a statement on the matter. [2632/20]
Amharc ar fhreagraI am advised by Revenue that there are currently 15 Revenue staff members employed in Portlaoise, of whom four are assigned there on a temporary basis.
74. Deputy Michael McGrath asked the Minister for Finance the number of motor insurance premiums paid by policyholders; the number of claims paid out by the different settlement channels as described in page 8 of the first national claims information database report on private motor insurance; the total amount paid out on claims by the different settlement channels as described in page 8 of same in nominal figures in each of the years 2009 to 2018, in tabular form; and if he will make a statement on the matter. [2662/20]
Amharc ar fhreagraIn order to address the Deputy's question, my officials contacted the Central Bank of Ireland (CBI) to request the necessary information. In response, the CBI noted that in compiling the NCID Report, the data used had the following market coverage (based on the proportion of total premium earned in 2018):
- Premium and policy count data covers 90% of the market;
- Claims settlement costs and numbers data covers 83% of the market.
- Banded claims settlement costs and numbers data covers 70% of the market.
This level of coverage should be borne in mind when using data in relation to absolute amounts, e.g. of premiums or settled claims paid. In addition, while the information in respect of the number of premiums earned covers the years 2009 – 2018, the information in respect of settlement claims covers the years 2015-2018 only.
I will now address the three questions raised by the Deputy and provide the information given to my officials from the Central Bank of Ireland. Please note that this data is available in Annex 2 of the NCID private motor insurance report published on the Central Bank of Ireland website www.centralbank.ie/statistics/data-and-analysis/national-claims-information-database.
1. The number of premiums paid by policyholders in respect of motor insurance in nominal figures in each of the years 2009 to 2019
The CBI has provided officials with the following data in respect of the number of premiums earned for the years 2009-2018:
Table 1- Number of premiums earned in respect of private motor insurance (all policies).
|
Year |
Number of Premiums (Earned Policy Count) |
|
2009 |
1,808,945 |
|
2010 |
1,705,146 |
|
2011 |
1,756,823 |
|
2012 |
1,819,858 |
|
2013 |
1,822,783 |
|
2014 |
1,814,433 |
|
2015 |
1,777,622 |
|
2016 |
1,767,990 |
|
2017 |
1,851,343 |
|
2018 |
1,865,268 |
2. The total amount paid out on claims (or the cost of claims) by the different settlement channels in tabular form
As noted above, the CBI advised my officials that the figures relating to settlement channels need to be considered in the context that the NCID Report is covering an estimated 83% of the market for settled claims (Table 2) and 70% of banded settled claims (Table 3), based on the 2018 earned premium of the companies included versus the total market 2018 earned premium. This means that when calculating the amount paid out on claims by the different settlement channels using the NCID data, it is important to consider that this is a portion (albeit a very significant portion) of the actual cost of claims and thus not the total cost of claims.
The Deputy will note that the information related to the average injury settlement costs in each settlement channel is available in the NCID Report (Table 3, page 27). The numbers and costs of claims for Table 3 of the NCID report can be seen in Table 2 (also published in Annex 2 to the 2019 NCID report).
Table 2- Cost of injury claims by settlement channel and settled year 2015 – 2018 (Accompanies 2019 NCID private motor report Table 3 - breakdown of the average injury settlement costs in each settlement channel. Figures represent 83% of the market.)
|
Sett Year |
Settlement Channel |
Number of Claimants |
Comp Costs (€) |
Legal Costs (€) |
Other Costs (€) |
Total Costs (€) |
|
2015 |
Direct |
7,750 |
86,137,100 |
8,391,709 |
3,342,662 |
97,871,471 |
|
2016 |
Direct |
7,968 |
92,339,009 |
10,106,950 |
3,761,677 |
106,207,636 |
|
2017 |
Direct |
7,482 |
90,210,558 |
10,867,941 |
4,590,717 |
105,669,216 |
|
2018 |
Direct |
7,619 |
91,089,760 |
13,312,087 |
4,276,466 |
108,678,313 |
|
2015 |
PIAB |
2,473 |
53,650,333 |
1,177,307 |
2,743,768 |
57,571,408 |
|
2016 |
PIAB |
2,537 |
57,114,652 |
1,538,362 |
2,589,401 |
61,242,415 |
|
2017 |
PIAB |
2,303 |
53,903,271 |
2,044,220 |
2,080,333 |
58,027,824 |
|
2018 |
PIAB |
1,994 |
45,958,606 |
2,250,124 |
1,519,120 |
49,727,849 |
|
2015 |
Litigated |
4,228 |
173,221,854 |
92,318,851 |
8,120,951 |
273,661,656 |
|
2016 |
Litigated |
4,178 |
173,160,910 |
92,086,371 |
7,800,613 |
273,047,894 |
|
2017 |
Litigated |
4,599 |
227,132,560 |
111,402,444 |
7,365,213 |
345,900,218 |
|
2018 |
Litigated |
4,714 |
230,741,682 |
112,275,745 |
2,355,635 |
345,373,062 |
Referring to Table 2, it can be seen that the value of total costs for direct settlements have increased by 11% between 2015 and 2018, the cost of injury claims settled by PIAB decreased by 13.6% and the cost of injury claims settled through litigation increased by 26.2%.
While it is true to say that the nature or severity of the injury claims settled in the different channels can vary significantly and there may be good reasons for pursuing litigation, it can be stated that the pursuit of litigation is contributing significantly to overall settlement costs, and that the cost of claims settled by litigation has increased significantly since 2015.
Table 3- Cost of injury claims less than €100k by settlement channel and settled year 2015 – 2018 (accompanies 2019 NCID private motor report Table 4 - breakdown of the average injury settlement costs, where the total cost of settlement is less than €100k. Figures represent 70% of the market)
|
Settled Year |
Settlement Channel |
Number of Claimants |
Compensation Costs (€) |
Legal Costs (€) |
Other Costs (€) |
Total Costs (€) |
|
2015 |
Direct |
7,454 |
76,446,732 |
6,677,237 |
3,319,580 |
86,443,551 |
|
2016 |
Direct |
7,605 |
80,523,255 |
7,740,095 |
3,741,127 |
92,004,477 |
|
2017 |
Direct |
6,977 |
77,660,872 |
8,374,744 |
4,258,879 |
90,294,500 |
|
2018 |
Direct |
7,046 |
78,334,369 |
9,677,062 |
4,454,080 |
92,465,509 |
|
2015 |
PIAB |
2,229 |
47,918,422 |
805,821 |
2,704,610 |
51,428,853 |
|
2016 |
PIAB |
2,151 |
48,394,861 |
1,108,609 |
2,639,851 |
52,143,323 |
|
2017 |
PIAB |
1,889 |
42,869,687 |
1,303,550 |
2,146,386 |
46,319,624 |
|
2018 |
PIAB |
1,619 |
36,686,459 |
1,433,587 |
1,844,017 |
39,964,059 |
|
2015 |
Litigated |
3,416 |
72,559,299 |
48,725,827 |
3,789,976 |
125,075,099 |
|
2016 |
Litigated |
3,204 |
74,521,477 |
47,147,615 |
3,758,945 |
125,428,032 |
|
2017 |
Litigated |
3,537 |
84,970,861 |
51,654,711 |
4,261,636 |
140,887,207 |
|
2018 |
Litigated |
3,544 |
85,793,493 |
53,653,145 |
3,660,758 |
143,107,394 |
Table 3 focusses on the cost of injury claims less than €100k by settlement channel. It reinforces the point made above about the impact that litigation is having on settlement costs. The above figures are aggregate in nature. However when examined from an average claim perspective, they indicate that the average settlement for litigated cases under €100,000 is just over €23,000 while the accompanying average legal costs is just over €14,500. When this is compared with the average PIAB award of just over €22,500, and its average legal costs of €753, it raises questions about how the differential in legal costs can be justified. In addition, the length of time to settle these claims is nearly two years longer than in PIAB, which in itself drives up the cost of insurance. I do not believe these differentials are sustainable and in light of this comparative information, set out in the NCID report and the table, I believe that legal profession needs to recognise their role regarding costs. The data within the NCID report makes it clear that in overall terms, PIAB offers the most cost effective settlement channel and I would hope that its settlement rates increase going forward. This is a key aim of our work in the CIWG.
In conclusion, the NCID Report demonstrates why we must address award levels in this country if we want to see cheaper insurance premiums and an increased risk appetite from insurers. In this regard, the data in the NCID Report shows that personal injury claims have been driving the cost of claims in recent years – representing 75% of the ultimate claims costs over the period. This is not sustainable in my view. This is all the more concerning as the Report shows that these increased costs are not being driven by a higher frequency of claims. I believe that our focus therefore must continue to be on the Judicial Council and its publication of the new Personal Injuries Guidelines later this year.
75. Deputy Seán Haughey asked the Minister for Finance his views on the ongoing closures of commercial bank branches nationwide; his further views on whether many persons, including the elderly, will be left without convenient commercial bank services; the steps he will take with the Central Bank to prevent further closures; and if he will make a statement on the matter. [2687/20]
Amharc ar fhreagraThe Deputy will be aware that the banking sector is experiencing a challenging operating environment and the traditional banking model has been under pressure for some years to adapt and deal with legacy issues. In such circumstances, cost management is likely to remain a high priority for banks as it is an area under their control.
However, branch closures are always a matter of regret, and I as Minister, would hope that closures are kept to the minimum necessary for financial sustainability. Notwithstanding this, I do expect that any bank closing branches will do everything it can to mitigate the impacts of the branch closures on local communities, including technology and the use of alternative means of service delivery.
I am advised by the Central Bank, that within its Consumer Protection Code 2012 (the Code) that there is a requirement that a regulated firm must not, through its policies, procedures, or working practice, prevent access to basic financial services. In addition, Provision 3.12 of the Code requires that banks make clear to consumers when they intend to close a branch, in order to allow consumers to make alternative arrangements if they so wish. When intending to close, merge or move a branch, the bank must:
1. notify the Central Bank immediately;
2. provide at least two months’ notice to affected consumers to enable them to make alternative arrangements;
3. ensure all business of the branch is properly completed prior to its closure, merger or move, or alternatively inform the consumer of how continuity of service will be provided; and
4. notify the wider community of the closure, merger or move in the local press in advance.
In line with the requirements of Provision 3.12, when the Central Bank is made aware of any branch closures, it engages with the regulated entity to ensure the impact of any decision regarding branch closures is carefully considered across its full customer base. The Central Bank expects that the regulated entity in question will provide affected vulnerable customers with all the assistance that is necessary to ensure that they retain full access to basic financial services, albeit at another branch location.
For those who are concerned that there is a lack of convenient commercial bank services in light of branch closures, I would like to draw your attention to the Indecon report on Community Banking in Ireland published by my Department in December 2019. The report concluded that there is extensive provision of banking services by credit unions, An Post, as well as by commercial banking providers in the Irish market.
The report found that there are 1,912 branches operated by banks, credit unions and post offices in Ireland, 63% of these branches are post offices or credit unions and 37% are banks. The Indecon report also demonstrates that there is a higher number of branches per capita in many of the counties where a significant percentage of the population resides in rural areas.
76. Deputy Seán Haughey asked the Minister for Finance the steps he will take with the Central Bank to ensure that commercial bank services continue to be made readily available to customers who are not online; and if he will make a statement on the matter. [2688/20]
Amharc ar fhreagraThe Deputy will be aware that decisions in regards to operational matters are the sole responsibility of the boards and management of the individual banks which are run on an independent and commercial basis. Furthermore, the independence of banks in which the State has a shareholding is protected by Relationship Frameworks, which are legally binding documents that cannot be changed unilaterally. These frameworks are publicly available and were insisted upon by the European Commission to protect competition in the Irish market.
However, I am advised that the Central Bank's Consumer Protection Code 2012 (the Code) states that a bank must not, through its policies, procedures, or working practice, prevent access to basic financial services. The Central Bank adopts a ‘technology neutral’ approach meaning that the same principles of regulation, including the rules of the Code, apply equally to both digital and traditional delivery environments.
Part 4 of the European Union (Payment Accounts) Regulations 2016, Access to Payment Accounts, Article 15, sets out that payment accounts with basic features shall be made available to consumers by all relevant credit institutions, without discrimination.
Part 4, Article 17 of those 2016 Regulations outlines the minimum level of services that must be offered to the consumer. This includes services enabling the opening, operating and closing of the payment account, placement of funds in the account and the withdrawal of cash from the account. These services must be available to carry out at the counter on the premises of the credit institution and at ATM machines. The account must also permit the execution, within the EU, of direct debits, payment transactions using a payment card and credit transfers at terminals and counters of the relevant credit institution.
In December 2019, the Department of Finance published the Indecon report on Community Banking in Ireland, the conclusions of this Report indicate that customers have alternative banking options available to them aside from commercial banks. The report concluded that there is extensive provision of banking services in the Irish market, not just by commercial banks but by credit unions and An Post.
The report found that there are 1912 branches operated by banks, credit unions and post offices in Ireland, 63% of these branches are post offices or credit unions and 37% are banks. The Indecon report also demonstrates that there is a higher number of branches per capita in many of the counties where a significant percentage of the population resides in rural areas. Credit unions and post offices provide a wide range of banking services and may be a convenient option for customers who are not online.
77. Deputy Michael McGrath asked the Minister for Finance if he is satisfied with the response to date to the industry letter issued to credit institutions, credit servicing and retail credit firms of 23 October 2019 relating to the charging of costs associated with the legal process and other third party charges to borrowers in mortgage arrears; the quantum of such costs that have been reimbursed to customers to date; and if he will make a statement on the matter. [2700/20]
Amharc ar fhreagraI have been advised by the Central Bank of Ireland (the Central Bank) that it can confirm that it has received responses from all relevant regulated entities to its letter of 23 October 2019. As the Deputy will be aware, the letter related to the practice of charging costs associated with the legal process and other third party charges (the costs) to borrowers in mortgage arrears. In this regard, the Central Bank has confirmed to me that:
1. Applying the costs prior to the conclusion of repossession proceedings and prior to the decision by a Court to award the costs to the regulated entity is not in borrowers’ best interests. Additionally, it is not in the borrower’s best interests to apply the costs prior to settlement between the parties concerned or prior to the borrower being in a position to redeem the mortgage and requesting to do so; and
2. Pursuant to the terms of the European Union (Consumer Mortgage Credit Agreements) Regulations 2016 (the ‘CMCAR’), charging interest on the costs at any point is contrary to Regulation 29 (2) of the CMCAR.
Regulated entities are required to conduct their affairs in a manner that ensures that consumers’ interests are protected. The Central Bank recognises that there may be some cases that are more complex than others (such as mortgages that have already been settled) but expects all regulated entities to ensure the best interests of consumers are protected. The Central Bank will continue to challenge regulated entities where consumer focused outcomes are not clearly demonstrated.
Finally, the Central Bank cannot discuss or share individual responses from regulated entities, as in accordance with Section 33AK of the Central Bank Act 1942 (as amended) they cannot disclose the details of any subsequent action(s) that they might take.
78. Deputy James Browne asked the Minister for Finance if the need for a lower VAT rate for hairdressing will be reviewed; and if he will make a statement on the matter. [2753/20]
Amharc ar fhreagraGiven that the impact of an increase in the VAT rate on the hospitality sector as a whole has only recently been reviewed by the Department of Finance and the Revenue Commissioners, there does not seem to currently be a case for reviewing the impact of the increase.
In addition, the main finding of the Department’s Review is that expenditure on goods and services subject to the 9% is particularly sensitive to income growth and to the economic cycle, more so than to price changes. This is evidenced by studies which have shown that hairdressing services are twice the cost in Ireland compared to Northern Ireland, despite the fact that a 20% VAT rate applies to the service in the North compared to 13.5% here.
However, the Department will continue to monitor all economic activity in the normal way as part of the budgetary cycle.
79. Deputy Michael McGrath asked the Minister for Finance if he is satisfied that regulated retail credit firms and credit servicing firms dealing with mortgages are adequately staffed to deal with the amount of accounts they have to manage; the length of time regarded as an acceptable period for such a firm to assess a completed standard financial statement form from a customer before conveying a decision; his views on the fact it is taking over a year in some cases for a completed standard financial statement form to be assessed; and if he will make a statement on the matter. [2761/20]
Amharc ar fhreagraI have been advised by the Central Bank of Ireland (the Central Bank) that in 2015, they completed a themed inspection of compliance with certain aspects of the Code of Conduct on Mortgage Arrears 2013 (CCMA). They found significant and undue delays on the part of some lenders in assessing cases at various stages in the Mortgage Arrears Resolution Process (MARP). Additionally, they found that while firms had policies and processes in place for progressing a borrower’s case once a completed Standard Financial Statement (SFS) had been received, it was evident in some firms that these processes were not robust and stringent enough to prevent delays. In recognition of the time it may take to complete and assess the SFS and the potential deterioration in a borrower’s arrears situation while this process is being carried out, the CCMA specifically allows a lender to agree a temporary arrangement with a borrower, for a limited period, sufficient to allow time for the lender to receive and complete a full review of the SFS.
As a result of the Central Bank’s finding, firms were required to put in place the necessary resources, controls and procedures to ensure that borrowers did not experience any undue delays during the period between the borrower submitting the SFS for assessment and when the firm’s decision was communicated to the borrower. The Central Bank issued an industry letter outlining the outcomes and feedback from this themed inspection in 2015, a copy of the letter issued can be found on their website: www.centralbank.ie/docs/default-source/Regulation/consumer-protection/compliance-monitoring/themed-inspections/code-of-conduct-on-mortgage-arrears/gns4-2-1-2-ccma-ind-ltr.pdf)
The Central Bank also published Requirements and Standards for Credit Servicing Firms: (www.centralbank.ie/docs/default-source/regulation/industry-market-sectors/credit-servicing-firms/legislation/gns-4-4-4authorisation-creditservicingfirms.pdf?sfvrsn=5) in January 2019 and Requirements and Standards for Retail Credit Firms: (https://www.centralbank.ie/docs/default-source/regulation/industry-market-sectors/retail-credit-home-reversion-firms/authorisation-process/rcf-requirements-and-standards.pdf?sfvrsn=4) in 2017, which require firms to have adequate staffing in place and to ensure that relevant members of staff are fit and proper and have appropriate experience and skills. All firms seeking authorisation as a Credit Servicing Firm or Retail Credit Firm are required to demonstrate to the Central Bank that they are in a position to meet each of the requirements set out prior to being authorised. The Requirements and Standards must also be complied with on an on-going basis.
In addition, the Central Bank’s statutory codes of conduct including the Consumer Protection Code 2012 (CPC) requires firms to ensure it has and employs effectively the resources, policies and procedures necessary for compliance with the CPC.
The CCMA requires that lenders have fair and transparent processes in place for dealing with borrowers in or facing mortgage arrears. Provision 17 of the CCMA requires a lender to establish a centralised and dedicated Arrears Support Unit (ASU), which must be adequately staffed, to manage cases under the MARP. Furthermore, Provision 35 requires that a completed SFS must be assessed in a timely manner by the lender’s ASU.
I would urge any customer who is not satisfied with the service being provided by their financial institution to firstly make a complaint to their financial institution and if they are not satisfied with the response received, to make a complaint to the Financial Services and Pensions Ombudsman. They can be contacted at www.fspo.ie or at 01 567 7000.
80. Deputy Catherine Murphy asked the Minister for Finance if banks are never allowed to increase the interest margin over the ECB tracker rate beyond what was initially agreed with the customers unless they have a valid reason; and if he will make a statement on the matter. [2828/20]
Amharc ar fhreagraProvisions governing the setting and adjustment of interest rates are a contractual matter for the parties to a credit agreement and the contract usually sets out the circumstances in which the interest rate can be changed (including, if applicable, in circumstances where the interest rate is determined by a reference rate and any associated margin) over the duration of the credit agreement. Therefore, subject to compliance with relevant consumer protection requirements, such as the Central Bank’s Consumer Protection Code and the Code of Conduct on Mortgage Arrears and other relevant consumer protection requirements, mortgage interest rates may be adjusted in line with the applicable contractual provisions.
If a consumer is are not happy with the way a regulated entity is dealing with them, they can make a complaint to the regulated entity and if they are not satisfied with the response received from their regulated entity, they have the option to bring a complaint to the independent Financial Services and Pensions Ombudsman.
81. Deputy Niamh Smyth asked the Minister for Finance the status of plans to change flat rate expenses and the reclaiming of same; the way in which this will impact on teachers; if the case of a person (details supplied) will be reviewed and the concerns outlined will be addressed; and if he will make a statement on the matter. [2868/20]
Amharc ar fhreagraI would like to advise the Deputy that all employees have a statutory right to claim a deduction under section 114 of the Taxes Consolidation Act (TCA) 1997 in respect of an expense incurred wholly, exclusively and necessarily in the performance of the duties of their employment, to the extent which the expenses are not reimbursed by the employer.
The flat rate expense (FRE) regime is an administrative practice operated by Revenue to ease the administrative burden on Revenue and on employees in certain sectors by facilitating the automatic granting of a fixed tax allowance to cover allowable employment-related expenses, without the need for annual claims by every employee concerned. It applies where both specific commonality of expenditure exists across an employment category and the statutory requirement for a tax deduction for expenses as set out in section 114 TCA 1997 is satisfied.
I am advised by Revenue that it remains committed to the FRE regime and encourages all taxpayers to avail of their full tax relief entitlements.
I am aware that Revenue has recently completed a comprehensive review of their FRE regime. The purpose of the review, which involved engagement with relevant representative bodies, was to ensure that the expenses granted to each employment category remain justified and appropriate to modern day employments and work practices. Each category of FRE allowance was examined separately in the light of the legislative requirements of section 114 of the TCA 1997, which provide that expenses are tax deductible only if they are wholly, exclusively and necessarily incurred by the employee in the performance of the duties of his or her employment and are not reimbursed by the employer.
Revenue recently announced its decision to defer the implementation of any planned changes to the FRE regime until 1 January 2021, to allow time, as part of the annual Tax Strategy Group process, for the examination of a number of policy matters that were raised during Revenue’s review .
Consequently, there will be no change to FRE allowances for 2020, including the allowances available to teachers. Teachers will be entitled to the same FRE allowance in 2020 as was available to them in 2019.
I am advised by Revenue that it remains committed to the FRE regime and encourages all taxpayers to avail of their full tax relief entitlements.
82. Deputy Niamh Smyth asked the Minister for Finance the status of plans to deal with the rising cost of motor, home and business insurance; the steps being taken to prevent businesses from closing and bring down premiums; and if he will make a statement on the matter. [2891/20]
Amharc ar fhreagra104. Deputy Brendan Smith asked the Minister for Finance the measures he plans to implement to deal with exorbitant insurance costs affecting many sectors of the economy; and if he will make a statement on the matter. [3756/20]
Amharc ar fhreagraI propose to take Questions Nos. 82 and 104 together.
The general problems across the country as a whole faced by many consumers and businesses in relation to the cost and availability of insurance are well known. Unfortunately, there is no single policy or legislative “silver bullet” to immediately stem or reverse premium price rises or increase capacity. This is because there are many constraints faced by the Government in trying to address this issue in particular the fact that it can neither direct the courts as to the award levels that should be applied, nor can it direct insurance companies as to the pricing level, which they should apply in respect of businesses seeking insurance.
However, insurance reform remains a priority. Consequently, following the publication of its Report on the Cost of Motor Insurance in 2017, the Cost of Insurance Working Group (CIWG) undertook an examination of the employer liability and public liability insurance sectors. This second phase culminated in the publication in January 2018 of the Report on the Cost of Employer and Public Liability Insurance. There has been significant progress in the implementation of the two CIWG Reports. Examples include the following:
- the establishment of the Personal Injuries Commission, and its subsequent recommendations relating to addressing award levels for soft tissue injuries – this has provided the objective evidence we need to be able to address award levels;
- the establishment of the Judicial Council and its Personal Injuries Guidelines Committee, which is due to prepare new draft guidelines for personal injuries awards later this year;
- the establishment of the National Claims Information Database in the Central Bank to increase transparency around the future cost of private motor insurance; the Central Bank is to commence work on expanding its scope to cover employer and public liability insurance this year;
- reforms to the Personal Injuries Assessment Board through the Personal Injuries Assessment Board (Amendment) Act 2019;
- amendments to Sections 8 and 14 of the Civil Liability and Courts Act 2004 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;
- 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 commitment by the Garda Commissioner to investigate insurance fraud at a divisional level and which will be guided by the Garda National Economic Crime Bureau (GNECB) who will also train Gardaí all over the country on investigating insurance fraud, and the recent success under Operation Coatee, which targets insurance-related criminality; and,
- the work currently underway by the Law Reform Commission (LRC) 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.
These reforms are having a significant impact with regard to private motor insurance (CSO figures from January 2020 show that the price of motor insurance is now 27.4% lower than the July 2016 peak). It is important to continue working to ensure that these positive pricing trends can be extended to other forms of insurance, including those relevant to businesses.
Undoubtedly 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. In this regard, I believe good progress has been made with the establishment of a Judicial Council and its decision to nominate 28 April for the establishment of the Personal Injuries Guidelines Committee (PIGC). My understanding is that this means that the PIGC will be required by the legislation to submit draft Guidelines to the Judicial Council by 28 October. While the Government cannot interfere in the Judicial Council’s deliberations due to the constitutional separation of powers, I would hope that the Guidelines will take into account the Personal Injury Commission’s benchmarking report, and can come into operation as soon as possible following their submission to the Judicial Council. In return for lower and more consistent award levels, I believe insurers have to significantly reduce their premium levels and broaden their risk horizons.
Finally, I would like to assure the Deputies that the Cost of Insurance Working Group is continuing to focus on implementing the 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. The cumulative effects of the completion of the two Reports’ recommendations should include increased stability in the pricing of insurance for businesses and a more competitive insurance market.
