Dáil Éireann Debate, Thursday - 16 July 2020
6. Deputy Denis Naughten asked the Minister for Finance if third-level student accommodation providers that have refused to refund accommodation costs to students forced to leave college due to the Covid-19 pandemic will not receive State Covid-19 supports; and if he will make a statement on the matter. [16287/20]
Amharc ar fhreagraNo student accommodation provider should be able to avail of financial supports from the State if the provider is not prepared to refund students who have been forced to leave college early. This not only applies to private accommodation providers. The University of Limerick had to be shamed into refunding students. It is not good enough that students are not being refunded fees for half a semester despite the call from the Minister that he would like to see private providers of student accommodation provide pro rata refunds to students.
I should make clear to the House that the issue Deputy Naughten has raised is frequently raised with me in my constituency and elsewhere.
Currently, there are no tax incentive measures specifically targeted at the providers of student accommodation. Section 50 of the Finance Act 1999 provided for a student accommodation scheme whereby expenditure incurred on student rental accommodation could be set against the rental income from the property and against other Irish rental income, thereby reducing the taxable income of the person incurring the expenditure. The relevant provisions in the Taxes Consolidation Act 1997 are contained in Part 10. That scheme has now terminated insofar as the termination date for incurring qualifying expenditure has now passed.
Deputy Naughten has raised the issue with me and I entirely accept the seriousness of the matter he is raising. I know the issue really matters to students and their families. Currently, no tax exemptions are available for the development of purpose-built student accommodation. Any tax reliefs that are now being drawn down are on the basis of decisions made in our past.
I am not in a position to change the nature of tax relief schemes that existed before this point or intervene in how they are being drawn down. I accept that the point raised by the Deputy is very important. As Minister with responsibility for finance, I do not have policies that are capable of dealing with the issues raised by him. They are matters for the Departments of Education and Skills or Housing, Planning and Local Government.
I accept the Minister's response, but numerous reasons are being given by this sector for refusing to provide refunds. The fact is that student accommodation is shared by between three and up to seven students, which makes it impossible for them to socially distance. Tax reliefs are still being claimed by more than 200 providers throughout the country. In 2017, 246 providers claimed the relief. They were given tax relief to build these facilities. Some of them got free sites and others will come back, cap in hand, under the PUP scheme, the TWSS or the rate relief scheme because they will be unable to rent this accommodation during the summer months. The Minister for Education and Skills has said that she cannot do anything about this and Deputy Donohoe has said he cannot do anything about this. The reality is that these businesses are pocketing the money of students who do not have it and something needs to be done.
I am being very clear that the tax relief that is probably at the source of the kind of support to which the Deputy referred was terminated in 2008. It is now gone from the tax code. There are currently no further tax exemptions available for the development of purpose-built student accommodation. It is a serious matter.
The Ministers for Education and Skills and Housing, Planning and Local Government have sought to make progress on this issue. If the Deputy thinks I may be able to help him to deal with specific issues concerning this matter, I am very happy to engage with him. If somebody is on the wage subsidy scheme, it is because we are trying to allow his or her job to be retained. If somebody is on the PUP, it is because he or she no longer has a job.
The reality is that some of these providers will avail of some of the Covid-19 supports that are being put in place, whether that is restart grants or rate reductions from local authorities. I put it to the Minister and his colleagues in government that a clear and unambiguous message has to be sent out from the entire Government that we will not tolerate a situation where private providers are not prepared to refund students. If they cannot show that they have refunded students, then they should not be eligible for other supports.
It is clear that the softly-softly approach has not worked to date, despite numerous requests by the Minister and other Ministers. It took a lot of time to get the University of Limerick to hold up its hands and refund students. We need private providers to do the same, and we need to roll up our sleeves on this issue.
The principle is that we are all in this together. Many, but not all, providers of student accommodation have done the right thing during this pandemic. It is clear that many others have opted out of doing that. The problem is that they are opting in to the supports. Some supports are structured in terms of companies that have people working for them in accommodation, and are being subsidised by up to €410 by taxpayers who are the mothers and fathers of those students that have been shafted by providers. Many providers are able to defer paying their taxes by a number of months because of issues with Revenue.
I agree with Deputy Naughten. We have to make it very clear, in words and otherwise, that this is not acceptable. If we are all in this together, then students who had to fork out a fortune for student accommodation that is not being used must be refunded. Some of the accommodation has been sublet. We need to examine how we can tell providers that, if we are all in this together, they will not get support payments if they will not play the game with students.
The level of support the two Deputies are referring to involve the breadth and speed that have made such a difference in protecting our country at a time of significant risk to jobs and our public health. When claims are being made about the future of those supports, let us also acknowledge that those supports were introduced by this and the previous Governments and have saved jobs and protected incomes at a time our country was at significant risk.
I listened to the suggestions put forward by the Deputies regarding the TWSS. A person working on repairs to accommodation for one of these companies may be in receipt of payments under the scheme. If the Government goes down the path of withdrawing the scheme, and a foreperson, carpenter or person looking after student accommodation loses his or her job as a result of that decision, will the two Deputies take responsibility for that? They will correctly say that it is the responsibility of the Government based on the decisions it has made.
The role of the wage scheme and its future is to keep people at work. The issues the Deputies referred to are very serious. Progress has to be made on them, and I will offer any help I can to the Ministers for Education and Skills or Housing, Planning and Local Government in that regard. I am not going to jeopardise jobs in our country through changing the scheme to deliver other objectives. I have to keep in mind that people in the companies to which the Deputies referred could depend on the scheme for their jobs. I have a duty to them.
