Written Answers Nos. 1-75
66. Deputy Ged Nash asked the Minister for Finance if he is concerned at the impact recent and predicted ECB interest rate rises will have on the ability of first-time buyers to afford to purchase a home and service a mortgage; if he or his officials have had discussions in relation to any policy interventions under consideration in regard to the impact of continuing rate rises on borrowers; and if he will make a statement on the matter. [11263/23]
Amharc ar fhreagraThe Government appreciates the difficulties that the current inflation and interest rate environment is causing for many households, including those households servicing or applying for a mortgage.
The European Central Bank (ECB), which has an independent mandate to maintain price stability, is taking action to bring inflation down to its desired target of two per cent over the medium term. Interest rates are the main tool to combat inflation and the ECB has now increased its official interest rates five times since last summer.
Over this relatively short period, its key lending rate has increased from zero to its current level of 3%. The increase in official interest rates will feed into the general level of interest rates throughout the economy but decisions taken by mortgage entities in relation to passing on interest rate increases are a matter for those firms which are run on an independent commercial basis.
Neither the Central Bank nor I as Minister for Finance have any function or role in such decision making matters by credit institutions.
Nevertheless, there is a comprehensive consumer protection framework in place related to mortgages and mortgage lending. For example, the Central Bank's Consumer Protection Code and the Code of Conduct on Mortgage Arrears, seeks to ensure that Central Bank regulated entities are transparent and fair in all their dealings with borrowers and that borrowers are protected from the beginning to the end of the mortgage life cycle, for example, through protections at the initial marketing/advertising stage, in assessing the affordability and suitability of the mortgage and at a time when borrowers may find themselves in financial difficulties.
In addition, the Central Bank introduced a number of increased protections for variable rate mortgage holders in February 2017. The enhanced measures, which are provided for in the Consumer Protection Code 2012 (the Code) require lenders to explain to borrowers how their variable interest rates have been set, including in the event of an increase.
The measures also improve the level of information required to be provided to borrowers on variable rates annually about other mortgage products available from their lender which could provide savings for the borrower. The lender must also signpost the borrower to the CCPC’s mortgage switching tool. These are important regulatory provisions and I believe will be of benefit to existing and future mortgage holders in the current interest rate environment. In relation to policy interventions to assist households, including mortgaged households, more generally, Budget 2023 focused on easing the burden of inflation on household and businesses and, in addition to a large package of taxation and welfare measures, it also contained a range of one-off cost of living measures amounting to over €4.1 billion to help meet the increased cost of energy and other living expenses.
Last month, in recognition of these ongoing challenges, the Government added to these Budget measures, with a further €1.2 billion package of measures which will help with the bills, and to ensure there is no cliff-edge for the temporary measures already in place.
67. Deputy Emer Higgins asked the Minister for Finance his plans to increase the tax-free allowance for pensioners to bring it in line with the new allowance for workers. [11283/23]
Amharc ar fhreagraBudget 2023 included a personal income tax package amounting to €1.13 billion in 2023. Budget 2023 did not introduce a new tax free allowance for workers, instead the Standard Rate Cut-Off Point for single persons was increased by €3,200 or 8.7 per cent to €40,000, with commensurate increases for persons who are married/in civil partnerships. The main tax credits – personal tax credit, employee tax credit and earned income credit - were all increased by just over 4.4 per cent or €75 each to €1,775. The home carer tax credit was also increased by €100 to €1,700, a 6.3 per cent increase.
The ceiling of the band for the 2 per cent rate for USC was also increased by €1,625 from €21,295 to €22,920 in line with the increase in the national minimum wage. The reduced rate of USC concession for medical card holders who earn less than €60,000 per annum was extended for a further year.
The Deputy refers to increasing the tax free allowance for pensioners, which I assume relates to the age exemption limits for persons aged 65 or over. Currently, such individuals are exempt from income tax if their total income is less than €18,000 for single persons and €36,000 for married couples or civil partners. Marginal relief is available where the total income is less than twice the relevant exemption limit. Budget 2023 did not provide for an increase in the age exemption thresholds and there are no current plans to increase these thresholds.
The current tax arrangements for persons aged 65 or older compare favourably with the tax treatment of the generality of taxpayers. Persons aged 65 or over may also avail of the age tax credit. Reduced rates of USC also apply for persons aged 70 or older where their total income is €60,000 or less. Furthermore, the State Contributory Pension and the State Non-Contributory Pension are not chargeable to USC or PRSI.
The recent Commission on Taxation and Welfare recommended that age should be removed as a factor for determining the charge to Income Tax and USC as it narrows the tax base and breaches the concepts of horizontal equity and inter-generational equity.
My Department has begun initial work on a review of the personal tax system, taking account of the recent report of the Commission on Taxation and Welfare, and considering a range of personal taxation issues.
69. Deputy James Lawless asked the Minister for Finance the number of County Kildare businesses that have applied for assistance under the temporary business energy support scheme to date; the number that have been successful; the estimated value or worth of the support to date for businesses in County Kildare; and if he will make a statement on the matter. [11368/23]
Amharc ar fhreagra80. Deputy Robert Troy asked the Minister for Finance the number of businesses in County Westmeath that have applied for assistance under the temporary business energy support scheme to date; the number that have been successful; the estimated value or worth of the support to date for businesses in County Westmeath; and if he will make a statement on the matter. [11154/23]
Amharc ar fhreagraI propose to take Questions Nos. 69 and 80 together.
The Temporary Business Energy Support Scheme (TBESS) was introduced to support qualifying businesses with increases in their electricity or natural gas costs over the winter months.
Details of the scheme are set out in Finance Act 2022. The scheme provides support to qualifying businesses in respect of energy costs relating to the period from 1 September 2022 to 30 April 2023. However, subject to State aid approval, this period is to be extended to cover energy costs up to 31 May 2023. It is available to tax compliant businesses carrying on a trade or profession the profits of which are chargeable to tax under Case I or Case II of Schedule D where they meet the eligibility criteria.
The TBESS operates by reference to bills for the metered supply of natural gas and electricity. It is available to eligible businesses whose average unit price of electricity or gas for the relevant billing period has increased by a certain percentage as compared with the average unit gas or electricity price in the corresponding reference period in the previous year. Currently the relevant percentage is 50% however, as recently announced, and subject to State aid approval, this percentage is to be reduced to 30% on a retrospective basis, which will allow more businesses to qualify. Amounts payable under the TBESS are calculated based on a percentage of the increase in an electricity or natural gas bill as compared to a bill amount in a corresponding reference period in the previous year. Currently, the payment is based on 40% of the increase however, subject to State aid approval, this is to be raised to 50% for claim periods from 1 March 2023.
Revenue publishes detailed statistical reports in relation to the TBESS which are updated on a weekly basis. These reports are available on Revenue’s website. The registrations and claims for County Kildare and County Westmeath as of 1 March 2023 are as follows.
|
County |
Registrations |
Approved Claims |
Value of Approved Claims (€m) |
|
Kildare |
897 |
861 |
1.97 |
|
Westmeath |
570 |
557 |
1.06 |
70. Deputy Pádraig O'Sullivan asked the Minister for Finance the steps he is taking in response to a mortgage services provider (details supplied) increasing the standard variable interest rates; and if he will make a statement on the matter. [11345/23]
Amharc ar fhreagraThe Government fully appreciates the difficulties that the current inflation and interest rate environment is causing for many households, including households servicing a mortgage.
However, as the Deputy will appreciate, the European Central Bank (ECB) is independent in the formulation and implementation of monetary policy and it is taking action to bring inflation down to its desired target of two per cent over the medium term.
In pursuance of this mandate, the ECB has now increased its official interest rates five times since last summer. The increase in official interest rates will feed into the general level of interest rates throughout the economy but decisions taken by mortgage entities in relation to passing on interest rate increases are a matter for those firms which are run on an independent commercial basis.
Neither the Central Bank nor I as Minister for Finance have any function or role in such decision making matters by credit institutions.
Nevertheless, as part of its consumer protection framework, the Central Bank has put in place a range of measures in order to protect consumers who take out or have a mortgage. The consumer protection framework seeks to ensure that lenders are transparent and fair in all their dealings with borrowers and that borrowers are protected from the beginning to the end of the mortgage life cycle.
The consumer protection framework seeks to ensure that lenders are transparent and fair in all their dealings with borrowers and that borrowers are protected from the beginning to the end of the mortgage life cycle, for example, through protections at the initial marketing/advertising stage, in assessing the affordability and suitability of the mortgage and at a time when borrowers may find themselves in financial difficulties.
In particular, the Central Bank's Code of Conduct on Mortgage Arrears provides important protections to a borrower in or facing arrears on a mortgage secured on a primary residence. It requires that all regulated entities have fair and transparent processes to deal with borrowers facing repayment difficulty and that due regard is had to the fact that each mortgage case is unique and needs to be considered on its own merits.
All cases must be handled sympathetically and positively by the regulated entity, with the objective at all times of assisting the borrower to meet his or her obligations. The Central Bank has indicated that it is seeing firms implement a wide range of solutions for borrowers and I would encourage any person experiencing mortgage difficulty to contact and engage with their financial service providers as early as possible. Also in November 2022, the Central Bank wrote to regulated firms to emphasise the onus on them to actively identify and address risks to consumers that may potentially emerge from changes in the economic landscape within which the firm and/or its consumers are operating and it has also indicated that lenders should ensure that ensure that they have the operational capacity in place to facilitate people to switch mortgage at a system wide level.
More generally, as the Deputy will appreciate, in the Budget and more recently the Government has put in place a range of measures to help households with the increased cost of living and these will be of benefit to households with a mortgage.
72. Deputy Peadar Tóibín asked the Minister for Finance if he or his Department has met with officials from the GAA to discuss the cashless ticket system (details supplied). [11113/23]
Amharc ar fhreagraI would like to thank Deputy Tóibín for his question regarding the cashless ticket system in place for the purchase of tickets for GAA matches and events.
I can confirm that no meetings have taken place between me, in my role as Minister for Finance, or my Department officials and officials from the GAA regarding the issue raised.
The details supplied referenced the contract that the GAA currently has in place with Ticketmaster regarding the purchasing of paperless tickets. I have no role in relation to contracts between non-State entities in general, including the contact between these two entities. Legislation affecting contracts, such as the Sale of Goods and Supply of Services Act 1980 or the Consumer Protection Act 2007, is a matter for my colleague the Minister for Enterprise, Trade and Employment.
While I understand the problems emerged for customers purchasing tickets via Ticketmaster due to technical difficulties, it should be noted that customers have the option to purchase paper tickets from their local retail stores such as SuperValu and Centra.
I also understand that there is a broader concern about the ability to access and use cash in our wider society.
In recent years we have seen a considerable acceleration in technological developments and the pace of uptake has been accelerated by the COVID-19 pandemic. With that has come a decline in cash usage. Since 2015 the number of ATM transactions declined by 46%. Card payments accounted for 62.4% of the total number of payment transactions in 2021.
The Retail Banking Review which was published in November 2022 contained a number of recommendations regarding access to cash. One recommendation was for the Department of Finance to develop Access to Cash legislation and prepare heads of a bill in 2023. Work is now underway by officials in my Department on these heads of bill, which will also address the supervision of ATM operators and the supervision of cash-in-transit firms in respect of their cash handling activities and related financial services.
The Review also recommended that the Department of Finance lead on a National Payments Strategy (NPS) in 2024 to set out a roadmap for the future evolution of the entire payments system. The Review specifically recommended that the NPS should consider whether there should be legislation in relation to the acceptance of cash by certain classes of firms, sectors or sub-sectors and whether it should be Government policy that public bodies should accept or facilitate the acceptance of cash for the payment of goods, services, taxes, levies, fees or charges.
73. Deputy Marc Ó Cathasaigh asked the Minister for Finance if his Department has any plans to change VAT rates in Ireland in response to the coming zero rates of VAT on energy-saving materials such as solar panels in Northern Ireland, due to the Windsor Framework; and if he will make a statement on the matter. [11093/23]
Amharc ar fhreagraAs the Deputy will be aware, the VAT rating of goods and services is subject to EU VAT law, with which Irish VAT law must comply. In general, the Directive provides that all goods and services are liable to VAT at the standard rate unless they fall within Annex III of the Directive, in respect of which Member States may apply either one or two reduced rates of VAT. Ireland currently operates two reduced rates of VAT, 13.5% and 9%, as permitted by the Directive.
Following amendments to Annex III of the VAT Directive, agreed in April 2022, it is now possible to apply a reduced or zero rate to solar panels and a reduced rate to supply and installation of certain highly efficient low emissions heating systems.
Decisions about tax changes are generally taken in the context of the Budget and, as part of our normal annual Budget preparations. In this context, various options for tax policy changes will be considered by the Tax Strategy Group prior to Budget 2024. This will include any assessment of the impact the Windsor Framework will have on the supply of goods and services in Ireland.
