Written Answers Nos. 121-140
121. Deputy Niamh Smyth asked the Minister for Finance the number of eligible claims currently being made for the rent tax credit made in counties Cavan, Monaghan, Donegal, Sligo, Leitrim, Roscommon, Mayo and Galway, respectively; and if he will make a statement on the matter. [4280/24]
Amharc ar fhreagra136. Deputy Jennifer Murnane O'Connor asked the Minister for Finance the number of eligible claims currently being made for the rent tax credit made in counties Carlow, Kilkenny, Wexford, Wicklow, and Kildare, respectively; and if he will make a statement on the matter. [4249/24]
Amharc ar fhreagra148. Deputy James O'Connor asked the Minister for Finance the number of earners in Cork who will benefit from the USC reductions announced in budget 2024; the number of renters in Cork who benefitted from the rent tax scheme in 2023; how many are eligible to claim the same in 2024; and if he will make a statement on the matter. [4568/24]
Amharc ar fhreagra155. Deputy Willie O'Dea asked the Minister for Finance the number of eligible claims currently being made for the rent tax credit made in counties Limerick, Clare, Tipperary, Waterford, Cork and Kerry, respectively; and if he will make a statement on the matter. [4253/24]
Amharc ar fhreagra159. Deputy Barry Cowen asked the Minister for Finance the number of eligible claims currently being made for the rent tax credit made in counties Offaly, Laois, Westmeath, Longford, Meath and Louth and Kildare, respectively; and if he will make a statement on the matter. [4255/24]
Amharc ar fhreagraI propose to take Questions Nos. 121, 136, 148, 155 and 159 together.
The Rent Tax Credit, as provided for in section 473B of the Taxes Consolidation Act 1997 (TCA 1997), was introduced by the Finance Act 2022 and may be claimed in respect of qualifying rent paid in 2022 and subsequent years to end-2025.
I am advised by Revenue that the Rent Tax Credit statistics currently available refer only to claims by PAYE taxpayers. Data on claims by self-assessed taxpayers is not yet available. Statistics covering all taxpayers will be available in Q2 2024.
Claims in respect of the 2022 and 2023 years of assessment can be made by PAYE taxpayers by submitting an Income Tax return for that year. For claims relating to 2023, PAYE taxpayers had the option of claiming the rent tax credit due to them as rent is incurred through Revenue’s Online Service or at the end of the year through their Income Tax return. The same option is available for claims relating to 2024.
Rent Tax Credit claims are made are on a ‘taxpayer unit’ basis. A taxpayer unit is either an individual with any personal status who is singly assessed or a couple in a marriage or civil partnership who have elected for joint assessment.
I am advised that as of 25 January 2024, 453,777 Rent Tax Credit claims have been made by 310,891 taxpayer units consisting of:
- 136,660 taxpayer units that made claims for 2022 only,
- 102,473 taxpayer units that made claims for both 2022 and 2023,
- 5,413 taxpayer units that made claims for both 2022 and 2024,
- 41,415 taxpayer units that made claims for 2023 only,
- 5,678 taxpayer units that made claims for both 2023 and 2024,
- 4,591 taxpayer units that made claims for 2024 only,
- 14,661 taxpayer units that made claims for 2022, 2023, and 2024.
Data for claims relating to number of PAYE taxpayer units is set out by county in the table below.
|
|
2022 Year of Assessment |
2023 Year of Assessment |
2024 Year of Assessment |
|
CARLOW |
2,346 |
1,479 |
247 |
|
CAVAN |
2,139 |
1,355 |
210 |
|
CLARE |
3,243 |
2,086 |
391 |
|
CORK |
29,357 |
17,905 |
3,231 |
|
DONEGAL |
3,263 |
2,046 |
363 |
|
DUBLIN |
122,109 |
78,051 |
14,449 |
|
GALWAY |
18,560 |
10,936 |
2,103 |
|
KERRY |
3,952 |
2,380 |
381 |
|
KILDARE |
9,181 |
5,894 |
1,076 |
|
KILKENNY |
2,740 |
1,830 |
329 |
|
LAOIS |
2,027 |
1,301 |
263 |
|
LEITRIM |
848 |
485 |
91 |
|
LIMERICK |
12,697 |
7,299 |
1,315 |
|
LONGFORD |
1,502 |
939 |
167 |
|
LOUTH |
3,519 |
2,355 |
443 |
|
MAYO |
3,712 |
2,361 |
460 |
|
MEATH |
4,819 |
3,228 |
577 |
|
MONAGHAN |
1,794 |
1,175 |
208 |
|
OFFALY |
2,108 |
1,330 |
246 |
|
ROSCOMMON |
1,680 |
1,060 |
209 |
|
SLIGO |
3,036 |
1,759 |
314 |
|
TIPPERARY |
4,495 |
2,860 |
493 |
|
WATERFORD |
5,011 |
3,171 |
591 |
|
WESTMEATH |
3,752 |
2,405 |
428 |
|
WEXFORD |
4,054 |
2,539 |
449 |
|
WICKLOW |
3,155 |
2,056 |
393 |
|
Not Currently Available |
4,108 |
3,942 |
916 |
|
Total |
259,207 |
164,227 |
30,343 |
In relation Deputy O'Connor's query as to the number of persons eligible to claim the rent tax credit in 2024, I am advised that, in general, Revenue does not have advance information on the eligibility of taxpayers to claim the Rent Tax Credit given that this is dependent on future rental patterns and other factors.
Finally, in relation to Deputy O'Connor's query concerning USC, I am advised by Revenue that it is estimated that a total of 1.6 million taxpayer units will benefit from the USC measures outlined in Budget 2024. A taxpayer unit counts jointly assessed couples as one unit. I am further advised by Revenue that this and other estimates relating to Budget changes to income tax policy are provided using Revenue’s micro-simulation income tax model, Tax Modeller, and that, while this model uses taxpayer unit level data, estimates broken down by taxpayer location are not generated as part of the modelling process.
123. Deputy James O'Connor asked the Minister for Finance if he will investigate the many shortfalls of the insurance sector which has left both homes and businesses in the east Cork area making up the costs of damage following Storm Babet in October 2023; if he will consult the insurance sector on how to improve access for the public to get insurance quotes; and if he will make a statement on the matter. [4567/24]
Amharc ar fhreagraFirstly, I would like to acknowledge the enormous damage caused by the recent flood events as a result of Storm Babet, and the impact it has had on families, communities and businesses, particularly in counties Cork and Waterford. In recognition of this, an allocation of immediate humanitarian assistance was made available by Government to help families, businesses, clubs and voluntary organisations.
More widely, the Government’s current policy in relation to flooding and associated insurance coverage focusses on the development of a sustainable, planned and risk-based approach to dealing with such problems. This has resulted in a high level of flood cover in property policies nationally. This approach is accompanied by committed investment of €1.3 billion to the delivery of flood relief schemes over the lifetime of the National Development Plan to 2030. This will protect approximately 23,000 properties across various communities from river and coastal flood risk.
Specifically, with regard to East Cork, the OPW has already invested c. €80 million in flood defences in the region (Mallow €39.9m & Fermoy €38.4m) and Cork County Council is leading on a further flood relief scheme for Midleton that will protect 250 properties.
This investment is complemented by a Memorandum of Understanding (MoU) between the Office of Public Works (OPW) and industry representatives, Insurance Ireland. In the context of this, Insurance Ireland recently provided information to the Department of Finance on the level of claims and compensation provided by insurers arising from Storm Babet. This indicates that insurance companies have provided a significant level of financial compensation (covering 1,295 claims totalling €52.1m) for damage, comprising commercial, household and motor claims.
Data from both Industry representatives and the Central Bank of Ireland indicate that flood insurance coverage is relatively high, and has indeed increased since 2015. However, it is acknowledged that some households are still experiencing difficulties, particularly in some areas with demountable flood defences. These systems require human intervention in terms of their deployment. This issue is the subject of the MoU working group between the Office of Public Works (OPW) and Insurance Ireland. Officials from the Department of Finance and other stakeholders also engage constructively with this process.
Turning to such recent adverse weather events, I engaged with Insurance Ireland to outline Government’s clear expectation that insurers should deal with affected policyholders fairly and promptly. Furthermore, Minister of State Carroll MacNeill recently met with the CEOs of the major insurers and clearly reiterated this message and the necessity for customers to be treated in accordance with the Central Bank of Ireland’s Consumer Protection Code. Linked to this, the need for insurance providers to take a reasonable approach to the provision of cover where properties are proven to be in areas protected by flood defences was highlighted.
At EU and international level, the Department of Finance continues to monitor the analysis and recommendations of the European Commission, IMF, EIOPA and the OECD regarding climate risk impacts for insurance and the concept of insurance protection gaps. Domestically it continues to work closely with a range of stakeholders, including the Central Bank of Ireland across this policy area, including on the consumer protection aspect.
Finally, please be assured that both Minister of State Carroll MacNeill and I will engage on all aspects of insurance reform, including flood cover issues, and that every effort is being made to encourage a responsive approach from the insurance industry.
124. Deputy Alan Farrell asked the Minister for Finance to provide an update on his engagements at the most recent ECOFIN meeting; and if he will make a statement on the matter. [4006/24]
Amharc ar fhreagraOn Tuesday 16th January, I attended the first meeting this year of the Economic and Financial Affairs Council (ECOFIN) in Brussels.
The meeting began with a formal working breakfast and the usual updates on the economic situation as well as a debrief from Eurogroup the previous day.
The main agenda started with a presentation by my Belgian colleague on the work programme for the Belgian Presidency of the Council of the European Union (which will cover the first six months of 2024).
This was followed by an important discussion on the European Semester for 2024. As the Deputy will be aware, the semester is the yearly exercise to coordinate economic, fiscal, employment and social policy within the European Union. We reviewed and approved the text of the Council Conclusions on the Alert Mechanism Report 2024 and the Annual Sustainable Growth Survey 2024, and approved the 2024 Euro Area recommendations on the economic policy of the euro area.
We then had an engaged discussion on the economic and financial impact of Russia's aggression against Ukraine. Ireland recognises the scale of the challenges faced by Ukraine, and supports the EU’s united response to the war. We therefore support efforts to find agreement to ensure EU financial assistance to Ukraine continues over the next number of years.
Finally, ECOFIN gave a mandate to the Economic and Financial Committee (EFC) to finalise the EU's Terms of Reference for the G20 Finance Ministers' and Central Bank Governors' Meeting in Sao Paulo from 26th to 29th February.
125. Deputy Richard Boyd Barrett asked the Minister for Finance the penalties he is considering on film production companies found to be in breach of their requirement and obligation for receiving section 481 film tax credit funding, given the recent Workplace Relations Commission rulings against a company (details supplied) for its failure to uphold the employment rights and blacklisting of 38 film crew; if he intends to undertake an investigation into whether the practices at play in these cases are widespread in the film industry; and if he will make a statement on the matter. [4573/24]
Amharc ar fhreagraI am aware of the Workplace Relations Commission rulings to which the question refers, but the Deputy will understand that I cannot comment specifically on the tax affairs of any individual entity.
By way of general comment, I would note that there is provision in section 481 of the Taxes Consolidation Act 1997 (TCA 1997) for the withdrawal of the film tax credit in certain circumstances, including where:
- the producer company or qualifying company fails to comply with the provisions of section 481 TCA 1997 or the Film Regulations 2019;
- the producer company or qualifying company fails to comply with the conditions specified in a certificate issued by the Minister for Tourism, Culture, Arts, Gaeltacht, Sport and Media; or
- the producer company, qualifying company or any person who is either the beneficial owner of, or able directly or indirectly to control more than 15% of the ordinary share capital of the producer company or the qualifying company, is not fully tax compliant within the period of 12 months from the date of completion of the qualifying film.
- With regard to investigations, the Workplace Relations Commission conducted an audit of the film and TV drama production industry in 2020 to:
- examine industrial relations, employment practices and procedures;
- assess any issues arising; and
- make recommendations for their improvement where appropriate.
As part of this process the WRC issued an open call for submissions from interested parties, and responses were received from 34 groups and individuals across the sector. In August 2020, the WRC reported on the outcome of its audit and made four recommendations, and progress has since been made in the sector in respect of each recommendation. The report is available online at www.workplacerelations.ie/en/news-media/workplace_relations_notices/wrc-audit-of-the-independent-film-and-television-drama-production-sector-in-the-republic-of-ireland.pdf
The Deputy will also be aware that officials in my Department have for some time engaged with representatives from across the sector and, where issues have been identified, changes have been introduced. Engagement with all representative bodies will continue going forward, including at an upcoming industry stakeholder forum on the 8th of February.
127. Deputy Jennifer Murnane O'Connor asked the Minister for Finance the action he is taking to ensure that there will be widespread nationwide availability of ATMs; and if he will make a statement on the matter. [4250/24]
Amharc ar fhreagra138. Deputy Colm Burke asked the Minister for Finance the work he and his Department are doing to support people in the continued usage of ATMs and cash; and if he will make a statement on the matter. [4549/24]
Amharc ar fhreagra150. Deputy Niamh Smyth asked the Minister for Finance the regional criteria he intends to put in place for ATM provision; and if he will make a statement on the matter. [4281/24]
Amharc ar fhreagra157. Deputy Barry Cowen asked the Minister for Finance the action he proposes to take to ensure that consumers retain access to cash; and if he will make a statement on the matter. [4256/24]
Amharc ar fhreagraI propose to take Questions Nos. 127, 138, 150 and 157 together.
The Department of Finance's Retail Banking Review, published in November 2022, highlighted the continuing importance of cash in ensuring that people do not experience financial exclusion, that consumers can budget efficiently, and that there is a safety net in the event of electronic banking or the payments infrastructure being impacted by outages or cyber-attacks. The Review concluded that there was a reasonable level of cash access in the State, but it noted that there was no framework to maintain reasonable access to cash into the future.
Arising from this recommendation, on the 23rd of January, I published the General Scheme of the Access to Cash Bill. This legislation will initially preserve the level of access to cash at December 2022 levels, excluding subsequent changes due to the exit of Ulster Bank and KBC. It will establish a framework to provide that any future evolution of the cash infrastructure will be managed in a fair, orderly, transparent, and equitable manner.
The legislation will allow me to prescribe regional requirements for the minimum numbers of ATMs per 100,000 people, the proportion of the population that must be no more than 10 km from an ATM, and the proportion of the population that must be no more than 10 km from a “cash service point”. Cash service points are locations where cash can be deposited and withdrawn, where in-person assistance is available, during normal business hours. Bank branches and post offices satisfy this definition.
The Bill will require entities, whose share of current accounts and household deposits exceed percentages I will prescribe, to be responsible for maintaining access to cash levels. The designated entities, as they will be known, will, initially, be the three main retail banks.
The regions for this Bill will be the regions under the Nomenclature of Territorial Units for Statistics (NUTS3) classification, relied on by the European statistical agency Eurostat. There are eight NUTS3 regions in Ireland, namely: Border, West, Mid-West, South-East, South-West, Dublin, Mid-East, and the Midland region.
The Bill also provides for the remedying of “local deficiencies.” These are locations within a NUTS3 region where particular difficulties arise in accessing cash. The Central Bank will assess such cases and, where warranted, may require designated entities to address the issue. The Central Bank will prepare and publish guidance on local deficiencies prior to implementation of this provision.
The legislation provides for regular reviews of the access to cash criteria by the Central Bank following the publication of new Census data on population, or if cash demand drops by more than 15% in a calendar year compared to the previous calendar year.
A review must also be carried out if I request one, and the Central Bank may also carry out a review on its own initiative. The Central Bank must take account of cash demand, population changes, financial inclusion, operating costs related to the cash infrastructure, and any other matters the Bank deems relevant when preparing a review. I must have regard to the Central Bank review when amending the criteria by regulation.
As indicated above, the legislation requires that I have regard to the December 2022 levels of access to cash infrastructure when prescribing the initial criteria. When publishing the General Scheme, my Department also published supplementary information setting out the figures reported to my Department by the Central Bank for each region.
With regard to the percentage of the population with 10km of an ATM, the percentages were: 98.7% in the Border Region, 96.8% in the West, 98.7% in the Mid-West, 99.1% in the South-East, 98.5% in the South-West, 100% in Dublin, 100% in the Mid-East and 97.8% in the Midlands.
With regard to the numbers of ATMs per 100,000 people, the figures by region are: 95 in the Border, 91 in the West, 83 in the Mid-West, 77 in the South-East, 85 in the South-West, 79 in Dublin, 73 in the Mid-East and 75 in the Midlands. The above figures based on ATMs exclude some 43 limited ATMs which are in locations such as sports stadia or concert venues, which are only open for events.
With regard to the percentage of the population with 10km of a cash service point, the percentages were 99.4% in the Border Region, 99.2% in the West, 99.5% in the Mid-West, 99.5% in the South-East, 99.6% in the South-West, 100% in Dublin, 99.9% in the Mid-East and 99.8% in the Midlands.
The Review also called on Department officials to require ATM operators to be authorised and supervised by the Central Bank, and to provide the Central Bank with responsibility and powers to protect the resilience of the cash system - including the authorisation and supervision of cash-in-transit firms in respect of their cash handling activities and related financial services.
Although ATM deployers are required to comply with various security requirements set by the Private Security Authority, the operation of ATMs is not currently regulated by the Central Bank. As a result, there are no codes or regulations governing service standards, including hours of operation, denomination stocking, outages and maximum repair times. Reporting is voluntary. There is also no requirements to give notice of decisions to close or install ATMs or indeed of a decision to exit the business or enter it. The Access to Cash Bill will address these matters.
The General Scheme incorporates all of these elements in one piece of legislation. In order to draft the General Scheme, the Department engaged with the Central Bank and key players in the cash system in order to establish what the appropriate levels of access to cash are, to ensure that any further evolution of the cash infrastructure will be managed in a fair, orderly, transparent and equitable manner for all stakeholders.
Separately and also in response to a recommendation from the Retail Banking Review, my Department is preparing a new National Payments Strategy, which I expect to publish later this year. A key focus of the Strategy is to ensure Ireland has an accessible and innovative payment system as this is vital for our society and economy.
All citizens should be able to participate fully in all aspects of modern life using digital or cash methods of payment. While technology can enable vulnerable groups partake in society in new ways, it should not exclude them. I want to ensure choice is at the centre of our future payments strategy.
The Strategy is also specifically considering the issue of the acceptance of cash and whether the Minister for Finance should have the regulatory power to require critical sectors or sub-sectors to accept cash. The policy position on the acceptance of cash by public bodies is also being examined.
Finally, I launched a public consultation on the 12th of December last which closes on the 14th of February.
128. Deputy Martin Browne asked the Minister for Finance if his Department is considering measures to support businesses with the increased cost of doing business through the taxation system; and if he will make a statement on the matter. [4609/24]
Amharc ar fhreagraThere are already a number of measures in operation in the tax system that support businesses in Ireland, including those facing increased costs of doing business.
The Tax Debt Warehousing Scheme has offered valuable and practical liquidity support to businesses during the COVID pandemic and continues to support businesses as they recover from the impacts of the pandemic and the cost of living crisis. It has helped prevent business failure by assisting businesses with their cash-flow during difficult trading periods.
Introduced in May 2020, the scheme allowed businesses to temporarily defer certain tax liabilities on an interest-free basis for an extended period of time. After this period, a 3% interest rate has applied and will continue to apply until either the debt is repaid or the customer otherwise exits the scheme. Businesses have until 1 May 2024 to either repay their warehoused debt or make arrangements with Revenue to repay the debt over an agreed timeline based on their individual circumstances.
I have engaged with Revenue with a view to examining where further flexibility might be given to businesses in repaying warehoused debt. This work is underway by Revenue and my Department and I hope to make a further announcement on this matter soon. In the meantime, as always, where taxpayers are finding it difficult to meet their tax payment obligations the advice remains to engage with Revenue as soon as such difficulties start to arise so that an agreed solution can be found.
I have also been proactive in supporting SMEs by introducing or improving a number of taxation measures which help small businesses to access investment, scale-up and expand. Measures include the Employment Investment Incentive (EII), the Key Employee Engagement Programme (KEEP), the Revised Entrepreneur Relief and the new relief targeting angel investors. These tax incentives have undergone significant change in recent years following feedback from stakeholders, in particular the SME community. I am committed to continuing to review and adapt these schemes as necessary, to ensure they are effective.
Another business support measure that I provided for in Budget 2024 is an increase in the Research and Development (R&D) tax credit from 25% to 30%. While this increase is relevant to businesses of all sizes, it will be of particular benefit to smaller companies outside the scope of the new Pillar Two rules introduced with effect from end-2023.
Finally, the increasing complexity of the tax system is a concern frequently raised by businesses, particularly smaller businesses with more constrained resources, and I have committed to making efforts to simplify the tax system where possible. As part of this initiative, I have committed to introducing a participation exemption for foreign sourced dividends in Finance Bill 2024. The detailed development work will continue over the coming months and it is intended that, when operational, the participation exemption will provide administrative and competitive benefits for businesses operating in Ireland.
129. Deputy Pearse Doherty asked the Minister for Finance if he will consider increasing the rate and reducing the threshold at which the 10% stamp duty with respect to the purchase of certain residential property applies; and if he will make a statement on the matter. [4619/24]
Amharc ar fhreagraAs I set out in my response to the Deputy in question number 3328 of 24 January 2024, the Government is acutely aware that the bulk purchase of homes deeply affects aspiring owner-occupiers and first time buyers, and has introduced numerous measures to address this. This has been addressed both through disincentivising bulk purchases, and through positive steps taken to increase the housing supply.
Revenue and CSO data show that the higher stamp duty rate has applied to less than 1% of residential property transactions in the May 2021 to November 2023 period, and has applied to less than 2% of total new dwellings completed from 20 May 2021. Revenue data also demonstrates a yield of approximately €40 million has been collected in this category from 2021 to 2023.
As the Deputy is aware, Section 28 Guidelines were introduced by the Government in 2021, which aims to provide an ‘owner-occupier’ guarantee by ensuring that new ‘own-door’ houses and duplex units in housing developments can no longer be bulk-purchased by institutional investors in a manner that causes the displacement of individual purchasers or social and affordable housing, including cost-rental. At the end of Q4 2023, planning permissions which had this condition attached amounted to 39,900 homes with an owner-occupier guarantee since the guidelines were introduced in 2021.
The Government has also responded to challenges in the housing market through Housing for All, which is the Government’s plan to boost the supply of housing to 2030, to increase availability and affordability of housing, and to create a sustainable housing system into the future. The Government continued to fulfil this commitment through Budget 2024, which brought forward a record €5.1 billion budget for capital investment in housing. This includes €2.6 billion in exchequer funding, €978 million in Land Development Agency (LDA) funding, and €1.5 billion in Housing Finance Agency (HFA) funding.
The Government has consistently committed to putting affordability at the heart of the housing system through multi-annual funding through Housing for All. More homes are being built and bought than in a generation. The latest CSO data on planning permissions shows that nationally, 9,662 units were granted planning permission in Q3 2023, an increase of 43.3 per cent on Q3 2022. Residential planning permissions granted for the January to September 2023 period increased 13 per cent on the same period in 2022.
Through the plan’s record investment by the State in social and affordable housing (which will boost supply), supports for people to buy or rent affordable homes, as well as reforms of rental protections, planning, land management, social housing and other areas, we are addressing the challenges people are facing in accessing affordable housing to rent or buy.
Given the above mentioned measures the Government has taken against bulk purchasing of residential property, and taking into consideration the positive results seen through Housing for All, I do not have immediate plans to increase the rate and reduce the threshold at which the higher stamp duty rate on certain purchases of residential property applies. However, as with all areas of tax policy, stamp duty on bulk purchases of residential property will be kept under review throughout the annual budgetary process.
131. Deputy Bernard J. Durkan asked the Minister for Finance the extent to which positive conclusions can be drawn from this country’s economic performance when considered alongside other EU zone countries and all other European countries; if the methodology for the measurement of the economy here continues to be robust and accurate; and if he will make a statement on the matter. [4546/24]
Amharc ar fhreagraEconomic growth across the Eurozone, the European Union and more broadly remains subdued, and Ireland is facing many of the same headwinds as our European peers. The European economy recorded weak growth in 2023, with GDP in both the euro area and the EU growing by ½ a per cent compared to 2022. Of note, the single market’s largest economy, Germany, registered a contraction of -0.3 per cent in 2023.
The CSO have estimated Irish GDP to have declined by 1.9 per cent in 2023. However, as is well documented, Irish GDP is notoriously volatile, subject to revision, and is not useful in measuring the living standards of Irish residents. This is because it includes the globalised activities of large multinational enterprises such as, inter alia, contract manufacturing - essentially manufacturing out-sourced to third party manufacturers in third counties. Indeed, contract manufacturing has been a key driver of the decrease in GDP in recent quarters, alongside a fall in demand for pharmaceutical exports in the wake of the pandemic.
In contrast to the negative GDP estimate, modified domestic demand (MDD) – a more appropriate measure of the Irish domestic economy – recorded positive growth in the first three quarters of 2023. Although data for the fourth quarter is not yet available, MDD increased by 0.8 per cent in the first three quarters of 2023 compared to the same period in 2022. This speaks to the resilience of the domestic economy, despite the headwinds of persistent inflation and the related tightening of monetary policy throughout last year. Growth in the domestic economy has been underpinned by the continued strength of the labour market, with the level of employment reaching record levels in the third quarter of 2023. Cost of living supports targeted toward the most adversely impacted households have also acted as a tailwind to the domestic economy.
Looking ahead, growth in the Irish and euro area economies is expected to remain subdued this year. In the most recent OECD forecasts in November, MDD is projected to grow by 1.7 per cent in 2024, while euro area GDP is projected to increase by 0.9 per cent. Uncertainty surrounding the international outlook remains, however, amid heightened geopolitical tensions, uncertainty surrounding the full impact of monetary policy tightening, and the risk of persistent core inflation. My Department will continue to monitor threats to the Irish economy and will publish updated forecasts in the spring.
132. Deputy Ruairí Ó Murchú asked the Minister for Finance to provide an update on the work of the Office for the Promotion of Competition in the Insurance Market, particularly in relation to reducing the cost of public liability insurance; and if he will make a statement on the matter. [4576/24]
Amharc ar fhreagraInsurance reform is a key priority for this Government and is being delivered via the Action Plan for Insurance Reform. The vast bulk of the actions it contains are now either delivered or initiated. The importance that Government places on this policy area is evidenced by the fact that implementation is overseen by a Cabinet Sub-Group on insurance reform, chaired by the Tánaiste. Nevertheless, this Government is aware that certain groups are currently facing difficulty in terms of affordability and availability of public liability insurance, and has therefore continued to prioritise the delivery of the Action Plan, which will bring benefits to individuals, businesses and households alike.
The establishment of the Office to Promote Competition in the Insurance Market is a Programme for Government commitment. Chaired by Minister Carroll MacNeill, its aims are to help expand the risk appetite of existing insurers and explore opportunities for new market entrants. As part of this, the Office is in regular contact with areas that are experiencing insurance issues. It has become clear that the market is responding positively to the Government reform agenda, with insurance now available in previously difficult areas such as: equestrian activities; inflatable hire; ice-skating; sport clubs; play centres; and SMEs. The Office continues to assist in the connection of various groups experiencing insurance difficulties to relevant stakeholders, and will also maintain its engagement with IDA Ireland to help leverage the ongoing insurance reforms with the objective of targeting new entrants to the Irish market.
In conclusion, I wish to assure the Deputy of the Government’s intention to ensure that the ongoing implementation of the Action Plan for Insurance Reform will continue to ensure the availability and affordability of this key financial service.
133. Deputy Alan Dillon asked the Minister for Finance the number of applicants for the help-to-buy scheme in County Mayo in 2023; and if he will make a statement on the matter. [4494/24]
Amharc ar fhreagraThe Help to Buy (HTB) scheme is administered by Revenue to assist first-time buyers with buying or building a new house or apartment. The scheme gives a refund of Income Tax and Deposit Interest Retention Tax (DIRT) paid in the State over the previous four years, subject to qualifying criteria outlined in the legislation.
I am advised by Revenue that to date 153 applications, relating to 286 individuals with an address in County Mayo applied for HTB in 2023. Of these, 132 applications, relating to 250 individuals, have been approved with a total relief granted of approximately €3.4m. The remaining 21 applications, relating to 36 individuals, were received in the last quarter of 2023 and are currently being processed.
I am further advised by Revenue that annual and monthly statistics on the scheme are available on its website at:
www.revenue.ie/en/corporate/information-about-revenue/statistics/tax-expenditures/index.aspx.
134. Deputy James Lawless asked the Minister for Finance for an update on the National Payments Strategy; and if he will make a statement on the matter. [4277/24]
Amharc ar fhreagraYou will be aware that the Retail Banking Review, published in November of 2022, made two clear recommendations for my Department regarding payments: (1) to develop Access to Cash legislation and prepare a related Heads of a Bill in 2023; and (2) to lead on the development of a National Payments Strategy (NPS) in 2024.
I published the terms of reference for the NPS in June 2023, and work on the NPS has commenced, taking account of the changing payment landscape and ongoing legislative developments at EU level, including proposals on instant payments, payment services, legal tender and the digital euro.
My Department is seeking views from across Irish society though a public consultation. A Consultation Paper on the National Payment Strategy has been prepared to guide the discussion and is available on the Department’s website, consult.finance.gov.ie/en. This consultation is now open for submissions until 14 February 2024. The responses to the public consultation will form an important part of the National Payment Strategy to be published in 2024.
The Consultation Paper has three main areas of focus:
• Payments roadmap
• Acceptance of cash
• Access to cash [the development of the access to cash legislation is a separate work stream]
Focussing on the Deputy’s question posed in relation acceptance of cash, there is a need to ensure that cash can be accepted as a means of payment where appropriate. The NPS work will, therefore, look at the acceptance of cash and consider if legislation should be introduced to require certain sectors or sub-sectors to accept or facilitate the acceptance of cash. By extension, it will have to be considered whether it should be policy of the Government to require the public service to accept or facilitate the acceptance of cash.
In September of 2023 I recommended a pause in any changes to the acceptance of cash by public bodies until the NPS is finalised in 2024. That is to say, public bodies should continue to accept cash where they currently do so and not remove this option as they may be subsequently required to revert back to accepting, or facilitating the acceptance of cash.
Additionally, on 28 June 2023, the European Commission published a proposal for a Regulation on Legal Tender, which looks at both access to and acceptance of cash.
As regards the acceptance of cash, the European Commission's draft Regulation proposes that cash acceptance should be mandatory across the Euro Area. However, it also provides flexibility around mandatory acceptance in circumstances where there is a prior agreement in place between both parties regarding payment method, or if the refusal is made in good faith. The exceptions to mandatory acceptance are largely in common practice in Ireland currently.
The draft Regulation proposes that the competent authority in each Member State would be required to monitor the acceptance of payments in cash on an annual basis against a set of common indicators to be formulated by the European Commission and to take remedial measures if this monitoring shows that the mandatory acceptance of cash is being undermined. The draft Regulation specifically draws attention to the need to monitor the level of 'ex ante unilateral exclusions of payments in cash'. It defines such exclusions as including a 'no cash' sign.
The recitals to the proposed Regulation state that a Member State should, if it concludes the level of unilateral exclusions of cash undermine the mandatory acceptance of euro banknotes and coin, take effective and proportionate measures including requiring specific sectors, such as healthcare, supermarkets, post offices and pharmacies, to accept cash.
At domestic level, the work is being undertaken through the NPS, whilst the European Commission work is complementary.
135. Deputy Cormac Devlin asked the Minister for Finance if he will be extending the powers of the Central Bank in relation to the regulation of ATMs especially in relation to matters such as reporting, service standards, and denomination stocking; and if he will make a statement on the matter. [4267/24]
Amharc ar fhreagraAs the Deputy may be aware, on the 23rd of January, I published the General Scheme of the Access to Cash Bill 2024. The Access to Cash Bill stems from a recommendation made by the Department of Finance's Retail Banking Review, published in November 2022.
The aim of the Bill is to ensure continued reasonable access to cash in the State based, initially, on December 2022 levels, adjusted for the subsequent exits of Ulster Bank and KBC. The legislation will, for the first time, regulate ATMs with the objective of improving operational standards and ensuring good customer service.
It will also put in place a framework to allow for reasonable access to cash across the State that can evolve with the economy and society’s need for cash.
The operation of ATMs is not currently regulated by the Central Bank, although ATM deployers are required to comply with various security requirements set by the Private Security Authority. As a result, the Central Bank does not have any codes or regulations governing service standards, including hours of operation, denomination stocking, outages and maximum repair times.
Reporting is voluntary and there are no requirements to give notice of decisions to close or install ATMs or indeed of a decision to exit the business or enter it. The Access to Cash Bill will address these matters by requiring ATMs deployers to be registered with the Central Bank and by providing the Central Bank with the regulation making powers in relation to all the matters raised by the Deputy.
The Central Bank will be responsible for the monitoring and enforcement of this legislation.
137. Deputy Aindrias Moynihan asked the Minister for Finance for a review of tax treatment of increase for qualified adult, that the payment is treated as a separate source of income for the qualified adult in order they can avail of the PAYE employee tax credit and that the extended rate band can be made available to that dependant if jointly assessed; and if he will make a statement on the matter. [4537/24]
Amharc ar fhreagraThe Social Welfare Consolidation Act 2005 (SWCA) provides for the payment of the weekly state pension. The payment is made by the Department of Social Protection to an individual who fulfills the statutory criteria. The SWCA also provides for an increase in the amount of state pension where the beneficiary of the pension has a qualified adult dependent. The qualified adult portion is described as an “increase” in the pension and is payable in respect of a spouse, civil partner or cohabitant who is being financially maintained and whose income is not greater than a specified amount.
Section 12 of the Finance (No. 2) Act 2013 inserted subsection (2B) into section 126 of the Taxes Consolidation Act 1997 (TCA). The subsection became effective from 1 January 2014, confirming the tax treatment of the qualified adult dependent increase. It provides that, for the purposes of the Income Tax Acts, any increase in the state pension in respect of a qualified adult dependent is treated as if it arises to and is payable to the beneficiary of the pension, that is, the main pension recipient.
Therefore, the beneficiary of a Department of Social Protection pension is assessable on the aggregate of the pension and the amount by which the pension is increased for a qualified adult dependent. This means that the pension payment is not subject to double taxation as the qualified adult increase is deemed to be part of the pension of the person beneficially entitled to the pension rather than a separate source of income for the qualified adult.
Since the increase is treated as the income of the beneficiary for tax purposes, only one employee (PAYE/Employee) tax credit is available in respect of the state pension, including the qualified adult dependent increase, and there is no entitlement to any increase in the amount charged to income tax at the standard rate as a result of the qualified adult dependent payment.
I currently have no plans to review this.
139. Deputy Paul Kehoe asked the Minister for Finance if a VAT refund on aids and appliances for persons with a disability can be considered for works (details supplied); and if he will make a statement on the matter. [3002/24]
Amharc ar fhreagraI am advised by Revenue that the VAT treatment 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 which is paid by the final consumer.
The Directive allows for historic VAT treatment to be maintained under certain conditions, and Ireland has retained the application of a refund order, the Value Added Tax (Refund of Tax) (No. 15) Order, 1981 (SI No. 428 of 1981), (Refund Order). Under EU VAT law it is not possible to widen the scope of the VAT Refund Order.
This refund order provides for the refund of VAT paid on certain aids and appliances for the exclusive use by persons with disabilities. The aids or appliances which qualify for a refund includes aids, appliance, parts and / or accessories which are specially constructed or adapted for use by a person with a disability and includes goods which, although not so specially constructed or adapted, are of such a kind as might reasonably be treated as so constructed or adapted having regard to the particular disablement of that person. Mechanically propelled road vehicles are excluded from this refund order.
Claims for VAT incurred on repairs to existing home heating systems, or the installation of new heating systems are not typically repaid under the refund order as these systems are not considered to be specially constructed or adapted for use by a disabled person. However, claims under the refund order are assessed on a case-by-case basis and claims for such goods will be considered when accompanied by specific medical evidence that clearly demonstrates that they are essential in assisting a person with a disability to overcome this disability in performance of their daily functions or in exercise of their vocation.
Claims for refunds should be made on eRepayments through Revenue’s MyAccount. Alternatively, paper applications can be made on Form VAT 61A.
140. Deputy Joe Flaherty asked the Minister for Finance if he will be introducing new measures for the warehousing of tax debt; and if he will make a statement on the matter. [4443/24]
Amharc ar fhreagra141. Deputy Pádraig O'Sullivan asked the Minister for Finance if he plans to address the difficulties that businesses are facing with regards to warehouse debt; and if he will make a statement on the matter. [4589/24]
Amharc ar fhreagraI propose to take Questions Nos. 140 and 141 together.
The Tax Debt Warehousing Scheme has offered valuable and practical liquidity support to businesses during the COVID pandemic and continues to support businesses as they recover from the impacts of the pandemic and the cost of living crisis. It has assisted businesses with their cash-flow during difficult trading periods, preventing business failure.
Introduced in May 2020, the scheme allowed businesses to temporarily defer VAT and Employer PAYE, certain self-assessed income tax liabilities, and Wage Subsidy Scheme and Employment Wage Subsidy Scheme overpayments on an interest-free basis for an extended period of time, up to 31 December 2022; or until 30 April 2023 for those availing of the extended scheme. After that period, a per cent interest rate applies until the debt is either repaid or the customer otherwise exits the warehouse.
A significant extension to the scheme in October 2022 ensures that businesses do not have to address their warehoused debt until 1 May 2024. Whilst payments can be made in advance, it is important to note that businesses do not have to pay all their warehoused debt by that date. Instead, they are simply required to engage with Revenue to make arrangements to pay the debt over an agreed period of time, based on their individual circumstances and capacity to pay.
A key qualifying condition of the scheme is that all current liabilities are filed and paid on time.
The total debt in the warehouse has decreased substantially since January 2022 when over €3 billion was warehoused for over 100,000 customers. By 26 January 2024, a total of €1.72 billion was warehoused for 57,435 customers, per cent of which had outstanding liabilities of less than €5,000. The bulk of the debt (€1.47 billion) was warehoused by 5,265 customers with outstanding balances greater than €50,000. Furthermore, 2,176 customers had warehoused debt of €168 million included in a Phased Payment Arrangement (PPA) with Revenue.
In advance of the 1 May deadline, Revenue has begun directly engaging with all customers with remaining warehoused debt to advise them of their debt position and highlight again the payment options available to manage their warehoused debt, including a flexible, tailored PPA. This will enable businesses to secure their viability into the future while still meeting the requirements of the Tax Debt Warehousing scheme.
Revenue has advised that their approach will be flexible in relation to the agreement of payment plans for warehoused debt. Where there is meaningful and proactive engagement, Revenue will work with businesses and give them every possible support in managing the payment of the debt over a timeline that suits the individual circumstances of the business.
If there is a change in circumstances during the term of the PPA, a number of additional flexibilities are available to address any payment difficulties that may arise such as options to take a payment break, deferral of next payment due, amendment to payment date and amendment to monthly payment amounts. However, this flexibility is subject to the key requirement of the scheme that current liabilities continue to be filed and paid on time.
Revenue has begun holding informational events/webinars for business representative bodies and sectoral groups to further raise awareness and engage with businesses with warehoused debt, particularly businesses in the SME and hospitality sectors. For example, Revenue has partnered with the Small Firms Association and the Local Enterprise Network and delivered a webinar on 17 January outlining businesses obligations in respect of both warehoused and current liabilities, and the full range of payment options and flexibilities available. On 30 January, Revenue held a similar webinar for the Restaurants Association of Ireland and their members.
Given the unique nature of the debt, and in order to further support otherwise viable businesses which were impacted by public health restrictions during the pandemic, I have engaged with Revenue with a view to examining where further flexibility might be given to businesses in repaying warehoused debt. This work is underway by Revenue and my Department and I hope to make a further announcement on this matter soon.
In the meantime, as always, where taxpayers are finding it difficult to meet their tax payment obligations, the advice remains to engage with Revenue as soon as such difficulties start to arise so that an agreed solution can be found. Revenue’s expectation is that, with proactive and meaningful engagement from businesses, flexible payment arrangements will assist most businesses to agree a realistic payment plan suitable to their specific circumstances and will satisfactorily address the payment of their debt over an acceptable period of time, giving certainty to businesses, ensuring their viability and minimising business failure.
