Written Answers Nos. 138-167
138. Deputy Pearse Doherty asked the Minister for Finance the cost of raising the universal social charge exemption to €19,572 and only applying the charge to earnings in excess of €19,572 per year (details supplied). [5581/16]
Amharc ar fhreagra139. Deputy Pearse Doherty asked the Minister for Finance the revenue from tapering out all tax credits by 5% per €1,000 on income between €80,000 and €100,000 per year, resulting in no entitlement to tax credits when income is in excess of €100,000. [5582/16]
Amharc ar fhreagraI propose to take Questions Nos. 138 and 139 together.
I am informed by the Revenue Commissioners that the estimated first and full year costs to the Exchequer of exempting income up to €19,752 from Universal Social Charge (USC) are in the order of €501 million and €684 million respectively. This estimate envisages that for cases with incomes in excess of this threshold, USC would start to be applicable at the 5.5% rate on income in excess of €19,752 and the current 8% and 3% surcharge rates would also remain. I am informed that raising the threshold to €19,752 would mean an estimated 41% of income earners would be exempt from USC liability.
These figures are estimates from the Revenue tax forecasting model using latest actual data for the year 2013, adjusted as necessary for income, self-employment and employment trends in the interim. They are estimated by reference to 2016 incomes and are provisional and may be revised.
The estimated first and full year yield to the Exchequer of tapering the tax credits by 5% per €1,000 on income between €80,000 and €100,000, resulting in no entitlement to tax credits when income is in excess of €100,000, is €618 million and €872 million respectively.
The figures for the yield from tapering the Personal, PAYE and Earned Income Credit are estimates from the Revenue tax forecasting model using latest actual data for the year 2013, adjusted as necessary for income, self-employment and employment trends in the interim. They are estimated by reference to 2016 incomes and are provisional and may be revised. The estimates for the remaining tax credits are based on 2013 tax returns, the latest year for which complete returns data are available. The estimate does not include a yield from the Rent Tax Credit which is currently being withdrawn on a phased basis, ending in 2017. These estimates also take no account of any change in taxpayer behaviour which might arise on foot of the introduction of such a measure in terms of assessment status and claiming of credits.
Finally, I have been advised by the Revenue Commissioners that, given the current tax structures, major issues would need to be resolved as to how, in practice, the tapering out of tax credits could be integrated into the current system, and how this would affect the relative position of different types of income earners.
140. Deputy Kevin O'Keeffe asked the Minister for Finance when he will finalise an application by a person (details supplied) in County Cork under the disabled drivers tax concession scheme. [5583/16]
Amharc ar fhreagraI am advised by the Revenue Commissioners that the claim from the person concerned has been processed and he will receive the VAT repayment shortly.
141. Deputy Pearse Doherty asked the Minister for Finance the cost to the Exchequer of reducing value-added tax to 9% on new housing. [5616/16]
Amharc ar fhreagraI am advised by the Revenue Commissioners that the information furnished on VAT returns does not require the yield from particular activities or products to be identified, and therefore it is difficult to estimate the VAT yield for the sector mentioned by the Deputy. However, based on information extrapolated from various data sources, it is estimated that reducing the VAT rate to 9% on new housing would cost in the order of €200m.
142. Deputy Mary Mitchell O'Connor asked the Minister for Finance his plans to facilitate or remove the obligation of preparing returns to the Revenue Commissioners for the elderly, such as those over 80 years of age; and if he will make a statement on the matter. [5625/16]
Amharc ar fhreagraI am advised by the Revenue Commissioners that a taxpayer's obligation to prepare and submit a tax return is dependent on his or her circumstances.
In general, taxpayers who are "chargeable persons" under the self-assessment system (for example, individuals who carry on a trade, or have non-PAYE income such as investment income, or who are proprietary directors) are required, regardless of age, to submit a tax return to Revenue by 31 October of the year following the tax year in question (or by mid-November, if paying and filing through the Revenue On-Line Service).
By contrast, taxpayers whose income consists solely of income taxed under the PAYE system (other than certain directors or their jointly assessed spouse or civil partner) are not chargeable persons and, accordingly, are not obliged to file an annual tax return unless requested exceptionally to do so by Revenue.
A taxpayer who has income taxed under the PAYE system (such as a private pension or salary) and who also has taxable non-PAYE income, may, where such income does not exceed €5,000 for 2016 (or €3,174 for prior years), request Revenue to reduce their annual PAYE tax credits and rate band entitlements, so that the tax on their non-PAYE income is deducted by their pension provider or employer. Any such taxpayer is not considered a chargeable person and has no obligation to file an annual tax return. Revenue may, however, exceptionally request a tax return from such taxpayers.
Where a taxpayer is obliged to complete a tax return, or has been requested to complete a tax return by Revenue, they have the option to file the return online. Chargeable persons can file an electronic Form 11 through the Revenue On-Line Service and taxpayers who are taxed under the PAYE system can file an eForm 12 through the myAccount service. The electronic tax returns are simpler to complete than the paper versions and are pre-populated with certain information Revenue has in relation to the taxpayer to help them complete their return. This includes pay received and tax/USC deducted details from employers or pension providers and information from the Department of Social Protection such as pension details. Support is also provided for customers who are experiencing technical computer difficulties in accessing or navigating the electronic tax return form via a dedicated helpline at 1890 201106.
I am also informed that a simplified, four-page paper Form 12S is also available for taxpayers who are taxed under the PAYE system. In addition, any taxpayer who is obliged to complete a tax return, or has been requested to do so by Revenue, can also contact their local Revenue office if they have any difficulties in completing the return. Contact details are available from the telephone directory or online at http://www.revenue.ie/en/contact/index.html.
While I acknowledge that some individuals may suffer a decline in the level of their income as they get older, it is the case that the income of many such individuals remains at a level that is taxable. The obligation to make tax returns is determined by a person's economic circumstances and I have no plans to remove this obligation from persons in receipt of taxable income on the basis of an age threshold.
144. Deputy Brendan Griffin asked the Minister for Finance if he will review the rate of capital acquisitions tax for persons inheriting properties; and if he will make a statement on the matter. [5702/16]
Amharc ar fhreagraCapital Acquisitions Tax (CAT) is the overall title for both Gift and Inheritance Tax. The tax is charged on the amount gifted to, or inherited by, the beneficiary of the gift or inheritance.
CAT is charged at 33% to the beneficiary on amounts received by gift or inheritance, beyond certain lifetime tax-free amounts determined by the relationship between the beneficiary and the person making the gift or the inheritance. The rate is the same regardless of the nature of the gift or inheritance (i.e. cash or different types of property), although certain reliefs and exemptions can apply, notably for transfers of farms and businesses and of the residential property in which the beneficiary lives, subject to certain conditions.
As with all other areas of tax, the details of CAT, including the rate charged, are kept under review as part of the annual Budget and Finance Bill process.
145. Deputy Thomas P. Broughan asked the Minister for Finance his plans to introduce a savings scheme similar to the special savings incentive account in the near future; and if he will make a statement on the matter. [5727/16]
Amharc ar fhreagraAs the Deputy will be aware, it is standard practice for the Minister for Finance to review all tax charges, expenditures and reliefs in the run up to annual Budgets. It is also a longstanding practice of the Minister for Finance not to comment on any tax matters that may or may not be the subject of Budget decisions.
146. Deputy Thomas Pringle asked the Minister for Finance his plans to engage with the Irish League of Credit Unions on its concerns regarding the one-size-fits-all regulation policy of the sector, specifically the Consultation Paper 88, which imposes considerable restrictions on credit unions increasing the regulatory burden on the voluntary movement; and if he will make a statement on the matter. [5775/16]
Amharc ar fhreagraMy role as Minister for Finance is to ensure that the legal framework for credit unions is appropriate for the effective operation and supervision of credit unions.
The Registrar of Credit Unions at the Central Bank is the independent regulator for credit unions. Within her independent regulatory discretion, the Registrar acts to support the prudential soundness of individual credit unions, to maintain sector stability and to protect the savings of credit union members.
While it is important to distinguish this division of roles, it is equally important to recognise that both the Registrar of Credit Unions and the Minister for Finance work together for the safety of members' savings and the security of the credit union sector.
Commencement of all sections of the Credit Union and Co-operation with Overseas Regulators Act 2012 was aligned with the credit union financial year and the introduction of the underpinning Central Bank regulations, to ensure commencement in a coherent and cohesive manner. Implementation of the 2012 Act was completed in January this year.
Prior to implementation of the regulations, the Central Bank conducted two consultation processes. In its feedback statement on Consultation Paper 76 (CP76), containing a two-tiered regulatory structure, the Central Bank stated that the majority of submissions received indicated that it was not the appropriate time to introduce a tiered regulatory approach. While its second consultation paper, CP88, did not contain a tiered approach the Central Bank stated that where credit unions set out a clear path on how they wish to develop, it will consider any amendments to the regulations that may be appropriate.
The Commission on Credit Unions recommendations provide the basis for the 2012 Act and the regulations. I have invited the Credit Union Advisory Committee (CUAC) to carry out a review of implementation of the Commission on Credit Union's recommendations. This review is underway and is expected to be completed by end June 2016. The report will take account of various matters, including the need for credit unions to develop their business model and grow income in a prudent manner.
The Government's priorities remain the protection of members' savings, the financial stability of credit unions and the sector overall and it is absolutely determined to continue to support a strengthened and growing credit union movement.
147. D'fhiafraigh Deputy Éamon Ó Cuív den Aire Airgeadais cad é an líon iomlán foirne atá fostaithe ina Roinn faoi láthair; cé mhéad duine acu siúd atá ag feidhmiú i bpoist atá daingnithe (i scéim teanga, nó ar aon bhealach eile) mar phoist a bhfuil riachtanas Gaeilge ag baint leo; an bhfuil sé i gceist aon phoist eile de chuid na Roinne a aithint mar phoist a bhfuil riachtanas Gaeilge ag baint leo; agus an ndéanfaidh sé ráiteas ina thaobh. [5823/16]
Amharc ar fhreagraIs é líon iomlán na foirne atá fostaithe ar fhoireann na Roinne ar an 31ú lá Márta ná 280. Tá líon breise, 12 duine, ar iasacht ag an Roinn ó Ranna agus áisíneachtaí Stáit eile. Níl aon phost sa Roinn daingnithe mar phost a bhfuil riachtanas Gaeilge ag baint leis, agus tá roinnt ball foirne a bhfuil ag an Roinn atá abalta déileáil le comhfhreagras agus ceisteanna i nGaeilge, más gá.
The total number of staff employed in my Department at 31 March 2016 is 280. A further 12 are on loan from other Departments and state agencies.
There are no posts in my Department to which Irish is necessary and there are a number of staff who have the competence to deal with correspondence and queries through Irish, as required.
148. D'fhiafraigh Deputy Éamon Ó Cuív den Aire Airgeadais an bhfuil sé mar dhualgas oifigiúil ar bhaill foirne aonair ar leith de chuid a Roinne seirbhís a sholáthar trí Ghaeilge d’aon duine a lorgaíonn í nó an ar bhonn deonach amháin a thoilíonn baill foirne a Roinne seirbhís trí Ghaeilge a sholáthar; agus an ndéanfaidh sé ráiteas ina thaobh. [5839/16]
Amharc ar fhreagraNíl sé mar dhualgas oifigiúil ar aon bhall foirne áirithe de chuid na Roinne seirbhís trí Ghaeilge a sholáthar trí Ghaeilge d'aon duine a lorgaíonn í. Tá panéil deonach d'fhoireann na Roinne a bhfuil ar a gcumas seirbhís a sholáthar trí Ghaeilge ar fail sa chás go n-iarrtar í. Tacaíonn an Roinn le baill foirne gur mian leo a gcuid Gaeilge a fheabhsú trí chúrsaí GaelChultúir. An Straitéis 20 Bliain don Ghaeilge 2010 - 2030 Tuarascáil ar Dhul Chun Cinn: 2010 - 2015 An Roinn Airgeadai.
It is not the official duty of any staff member to provide service through Irish to an person who seeks it. There is a voluntary panel of Department staff in place of staff who have the capacity to provide service in Irish where it is sought. The Department supports staff members who wish to improve their Irish through Gaelchultúr courses.
149. Deputy Pat Deering asked the Minister for Finance the pricing controls in place for insurance companies, given that some persons (details supplied) in County Wicklow are being charged more than double the 2015 rates with no change to their policies. [5913/16]
Amharc ar fhreagraAs Minister for Finance, I am responsible for the development of the legal framework governing financial regulation. I am aware of reports on the increasing cost of motor insurance. However, the ability of the Government to influence insurance pricing is limited as insurance companies are required under European law to price in accordance with risk and neither I nor the Central Bank of Ireland has the power to direct insurance companies on the pricing or the provision of insurance products.
The EU framework for insurance expressly prohibits Member States adopting rules which require the prior approval or systematic notification of certain matters, including general and special policy conditions and scales of premiums. Furthermore, the EU framework provides non-life insurers with the freedom to set premiums.
Insurance companies consider a number of risks when determining the premium for a proposed insurance policy and premium will take account of the actuarial calculation of risk.
Insurance Ireland has informed me that motor insurers make their own individual decisions on whether to offer cover and what terms to apply. They use a combination of rating factors in doing this, such as the age of the driver, the type of car, claims record, driving experience, number of drivers, how the car is used, etc. Insurers do not all use the same combination of rating factors, prices vary across the market, and consumers are free to choose.
In the event that a person is unable to obtain a quotation for motor insurance or feels that the premium proposed or the terms are so excessive that it amounts to a refusal to give them motor insurance, they should contact Insurance Ireland (5 Harbourmaster Place, IFSC, Dublin 1, Telephone +353 1 6761820, quoting the Declined Cases Agreement. Under this Agreement, the Declined Cases Committee of Insurance Ireland deals with cases of difficulty in obtaining motor insurance.
150. Deputy Brendan Griffin asked the Minister for Finance his views on a matter (details supplied) regarding capital gains tax; and if he will make a statement on the matter. [5921/16]
Amharc ar fhreagraThe details supplied include a suggestion that a lower rate of capital gains tax (CGT) be charged "on the first two million", although it is not clear whether this refers to €2 million in gains or total consideration, or whether the amount is viewed as a lifetime limit or applying annually. I do not have any plans currently to introduce such a measure. The details of CGT, including the rate charged, are however kept under review as part of the annual Budget and Finance Bill process.
151. Deputy Michael McGrath asked the Minister for Finance the rules relating to the purposes for which mortgage holders can seek to re-mortgage their principal private residence, such as home improvements and critical illness; and if he will make a statement on the matter. [5927/16]
Amharc ar fhreagraThe Central Bank have informed me that no rules exist relating to the purposes for which mortgage holders can seek to re-mortgage their principal private residence.
However, the decision to grant or refuse credit is a commercial decision on the part of a regulated entity and the terms of the individual loan contract entered into by the borrower and lender may specify, as a contractual matter, the purpose or provide for restrictions on the use of the loan monies advanced by the lender.
In addition, the Central Bank's Consumer Protection Code 2012 (the Code) requires regulated entities to carry out an affordability assessment, prior to offering, recommending, arranging or providing a credit product to a personal consumer.
Provisions 5.9 5.15 of the Code relate to assessing affordability of credit.
In the case of a mortgage holder seeking to re-mortgage their principal private residence, Provision 5.15 of the Code is relevant and provides that: -
"A lender must carry out a further affordability and suitability assessment prior to advancing additional credit to a personal consumer, whether by way of a top-up on an existing loan or by a new agreement to provide credit".
Furthermore, the new European Union (Consumer Mortgage Credit Agreements) Regulations 2016 which now apply to any new loan advanced to a consumer which is secured on residential property or has otherwise been provided to the consumer to acquire or retain property rights in land, also places an obligation on the lender to, inter alia, assess the credit worthiness of the consumer.
Therefore, prior to deciding that such an arrangement is appropriate, a lender must complete an affordability assessment of the borrower and only provide credit where the result of the credit worthiness assessment indicates that the borrower's obligations are likely to be met in the manner agreed in the credit agreement.
152. Deputy Michael McGrath asked the Minister for Finance why a person is not allowed to buy an approved retirement fund from a defined benefit scheme; if he will introduce changes in this area; and if he will make a statement on the matter. [5968/16]
Amharc ar fhreagraApproved retirement funds (ARFs) were introduced in Finance Act 1999 to provide control, flexibility and choice to holders of personal pensions and to proprietary director members of occupational pension schemes in relation to the drawing down of benefits from their pension arrangements. Prior to that Act, any person taking a pension from a Defined Contribution (DC) scheme or a Retirement Annuity Contract had no choice but to purchase an annuity with their remaining pension pot after drawing down the permissible tax-free retirement lump sum. The ARF arrangement extended the options at retirement so that, in addition to the annuity option, the balance of a pension fund could be taken in cash (subject to tax, as appropriate) or be invested in an ARF or an approved minimum retirement fund (AMRF), subject to certain conditions.
ARFs and AMRFs are investment products into which the proceeds of certain pension funds of an individual can be invested at retirement. Beneficial ownership of the assets in an ARF/AMRF vests in the individual owner of the ARF/AMRF. An ARF/AMRF must be managed by a Qualifying Fund Manager and, as would be the case as a member or holder of a DC pension scheme or personal pension plan, the ARF/AMRF owner also bears the investment risk of the funds. Tax is not payable on the investment income or gains while the funds are invested in an ARF/AMRF. Distributions from an ARF or AMRF are taxable at the owner's marginal rate of tax and, in the case of ARFs, a certain percentage of the assets are imputed as distributed each year and taxed accordingly unless actual distributions equivalent to the imputed amount are made.
The ARF option was extended in Finance Act 2000 to the part of an employee's occupational pension fund built up from Additional Voluntary Contributions (AVCs) and more recently, in Finance Act 2011, it was further extended to cover an employee's entire pension fund where the fund is a DC occupational pension scheme.
The ARF option does not apply to the main benefits paid from defined benefit (DB) pension schemes, generally, since it was never intended or considered a necessary requirement for such schemes. Among other reasons, this is because such schemes pay out a specified pension benefit to members on retirement based on their service and remuneration. Furthermore, unlike in DC pension arrangements, there are no individual funds or pension pots attributable to individual members of DB schemes and, as such, DB scheme members do not individually bear the investment risk of the scheme and are not required to make their own investment decisions. Accordingly, I see no reason to extend the ARF option to the main benefits payable from DB pension schemes.
153. Deputy John McGuinness asked the Minister for Finance if he will resolve the issues in the case of a person (details supplied) in County Kilkenny relative to a claim for a refund of value-added tax and vehicle registration tax under the disabled drivers scheme. [6005/16]
Amharc ar fhreagraI am advised by Revenue that the car concerned does not qualify for relief from VAT and VRT and the person concerned was advised of this by Revenue on 30th March 2016.
154. Deputy Michael McGrath asked the Minister for Finance if it is permissible for a bank to remove a tracker mortgage rate from a borrower in circumstances where the property in question is no longer the principal private residence of the borrower; and if he will make a statement on the matter. [6019/16]
Amharc ar fhreagraIt is not possible to answer this question comprehensively for all mortgages as, by their very nature, mortgages are complex and can extend over a number of different loans for one particular borrower.
Firstly, any moves by lenders to remove tracker rate mortgages from borrowers can only be carried out in accordance with the underlying terms and conditions of the loans and the relevant consumer protection requirements.
The Central Bank has informed me that it has strong consumer protection requirements covering tracker rate mortgages which are set out in the statutory Consumer Protection Codes and the Code of Conduct on Mortgage Arrears. There are clear obligations on lenders to act in the best interests of customers, to disclose relevant material information to customers and/or to bring key items or key information to the attention of customers. Furthermore the Consumer Protection Code 2012 sets out specific requirements in respect of the treatment of personal customers exiting tracker rate mortgages. In the case of accounts in financial difficulty, the Central Bank's Code of Conduct on Mortgage Arrears applies to properties occupied by the borrower in the State or where the property is the only residential property owned by the borrower in the State. Under the CCMA a lender is permitted to offer a borrower an alternative repayment arrangement which requires the borrower to change from an existing tracker mortgage to another rate, but only as a last resort, where: all other options, which would retain the tracker rate, have been considered to be unsustainable; the arrangement offered is affordable for the borrower; and the arrangement is a long-term sustainable option.
I would also note that if a mortgage holder is not satisfied with a financial service provider's decision, the customer can make a complaint, using the financial service provider's internal formal complaints procedure. If they are not satisfied with the outcome they may wish to refer the matter to the Financial Services Ombudsman to have it independently investigated.
In addition, it may be useful to know that the Central Bank has embarked on a broader examination of tracker mortgage-related issues covering, among other things, transparency of communications with, and contractual rights of, tracker mortgage borrowers. The Central Bank has informed me that it expects significant progress to be made by all lenders before the end of 2016 and will provide an update on progress on its website by end April 2016.
155. Deputy Jack Chambers asked the Minister for Finance if he has met officials from a company (details supplied) and discussed certain issues with them; and if he will make a statement on the matter. [6023/16]
Amharc ar fhreagraI have met with officials from the company concerned on a small number of occasions over the past 12 months. The issues discussed included the following:
- The employment opportunities being created in Ireland;
- The very high quality of candidates applying for jobs with the company; and
- The company's future plans in Ireland.
The matters referred to in the details supplied were not discussed.
156. Deputy Róisín Shortall asked the Minister for Finance the rationale for the application of value-added tax on motorcycling helmets, given that this tax is not paid on the same item in the United Kingdom. [6057/16]
Amharc ar fhreagraI am advised by the Revenue Commissioners that the VAT rating of goods and services is subject to the requirements of EU VAT law, with which Irish VAT law must comply. EU VAT exemptions are set out in Articles 132 and 135 of the EU VAT Directive (2006/112/EC) and do not cater for the supply of motorcycling helmets.
Under the Directive, Ireland can also maintain the zero rating on those goods and services which were zero-rated at 1 January 1991, but the helmets referred to by the Deputy do not fall within this category. In contrast, the UK was applying a zero rate to personal safety equipment such as motorcycle helmets on 1 January 1991 and was thus permitted by the EU VAT Directive to continue to apply the zero rate.
Cycle helmets and motor cycling helmets and other protective headwear for children may benefit from the zero rate, in accordance with the Value Added Tax Consolidation Act 2010, Schedule 2, paragraph 10, provided they are described, labelled, marked or marketed for children under 11 years of age.
157. Deputy Shane Cassells asked the Minister for Finance to address the serious issue facing variable rate mortgage holders and to encourage the banks to pass interest rate cuts onto the mortgage holders. [6115/16]
Amharc ar fhreagraAs the Deputy will be aware, I have taken steps to ensure that the banks provide options for mortgage holders to reduce their monthly repayments. Last May, I requested a report from the Central Bank on the topic which was subsequently published. I also met the six main mortgage lenders in May and outlined my view that the standard variable rate being charged to Irish customers was too high. The banks agreed to review their rates and products and, by the beginning of July, to have simple options to reduce monthly mortgage payments for SVR customers.
In September I concluded a series of follow up meetings with these banks and the reality is that the majority have put options in place to allow many borrowers reduce their repayments. These options range from lower variable rates to new suites of variable rates based on loan-to-value and reductions in fixed rates.
I therefore encourage borrowers to contact their bank to see what is available to them in their circumstances or consider moving to another bank, where possible, if the offer is not satisfactory. I understand that this is not possible in all circumstances.
The Competition and Consumer Protection Commission (CCPC) website www.consumerhelp.ie is a valuable source of information on the rates charged by various financial institutions. In addition, the CCPC are currently running a mortgage switching campaign and have a mortgage switching tool on their website which should allow borrowers compare rates charged across institutions. Furthermore, I am pleased to note that some lenders offer incentives to borrowers switching mortgage provider. These initiatives illustrate the increasing competitive dynamics in the market which should benefit all borrowers.
158. Deputy Pearse Doherty asked the Minister for Finance when the joint group he appointed to examine the issue of motor insurance prices will report; if its report will be public; and if he will make a statement on the matter. [6150/16]
Amharc ar fhreagra159. Deputy Pearse Doherty asked the Minister for Finance the groups or persons the joint group he appointed to examine the issue of motor insurance price increases has met or sought advice from; and if he will make a statement on the matter. [6151/16]
Amharc ar fhreagraI propose to take Questions Nos. 158 and 159 together.
My Department has embarked on a review of policy in the insurance sector in consultation with the Central Bank of Ireland and other Departments and Agencies. The objective of the Review is to recommend measures to improve the functioning of the insurance sector. The Review will include an examination of the factors contributing to the cost of insurance.
Phase one of the Review is examining the current motor insurance compensation framework in Ireland. This work is being conducted by a Joint Working Group comprising officials of my Department and of the Department of Transport, Tourism and Sport. The group has met with a number of stakeholders to discuss the insurance compensation framework in the context of the functioning and regulation of the insurance sector generally. The Review group is working closely with the Central Bank of Ireland and has met with other stakeholders including the European Commission, Insurance Ireland, the Irish Brokers Association, the State Claims Agency and the Accountant of the Courts of Justice.
The Joint Working Group will shortly report to myself and the Minister of Transport, Tourism and Sport with recommendations for our consideration. In turn these recommendations will be submitted to Government in the coming weeks.
The outcome of this work will feed into the wider review of policy in the insurance sector which I have outlined above. This work will continue over the coming months and is expected to be completed by the end of this year. The final report will be presented to Government in due course and a decision on publish will be a matter for Government.
160. Deputy Pearse Doherty asked the Minister for Finance if he will provide for each State-owned or part-owned bank, the value of approved mortgages that are outside the normal 80% cap for non-first-time buyers or the equivalent cap for first time buyers, under the Central Bank's macro prudential lending rules and to show this figure as a percentage of the total approved mortgages also, since the rules came into operation and as a figure for 2016 mortgages to date in tabular form. [6152/16]
Amharc ar fhreagraAs the Deputy will be aware, the Central Bank's macro prudential limits on mortgage lending came into effect on 9th February 2015. The policy sets restrictions on the loan-to-value (LTV) and Loan-to-Income (LTI) ratios on products that can be offered by mortgage providers. There are a number of exemptions allowed for within the CBI guidelines, for example mortgage switchers or forbearance cases. The macro prudential limits on mortgage lending are designed, implemented and monitored by the Central Bank in its role as regulator of the Irish banking sector, and therefore fall outside of my remit as Minister for Finance.
However, the banks in which the State has a shareholding have informed me of the following:
AIB approved c. €2.0bn of mortgages in Ireland during 2015 and had drawdowns of c. €1.7bn. The bank fully complied with LTV and Loan-to-Income limits set by the Central Bank of Ireland during the year to 31 December 2015. All disclosures in relation to AIB's mortgage portfolios are contained in the Risk Management section of the bank's 2015 Annual Financial Report.
The PTSB Group had €459m of new mortgage lending in 2015, as set out on page 8 of the Group's 2015 Financial Statements. The Group was compliant with the Central Bank of Ireland's macro prudential restrictions in the period up to December 2015. Circa 11% of the qualifying loans were issued as LTV exemptions under the CBI macro prudential rules.
Bank of Ireland had new mortgage lending volumes of €1.4bn in 2015 in the Republic of Ireland. All required disclosures related to Bank of Ireland's mortgage portfolio can be found in their Annual Report for year end 31 December 2015.
161. Deputy Pearse Doherty asked the Minister for Finance the provisions each State-backed bank has made for legal fees, compensation or other costs related to the Central Bank of Ireland's ongoing investigation into tracker mortgages or because of any Financial Service Ombudsman rulings on the issue of tracker mortgages; the cost incurred to date in each case for each bank; and if he will make a statement on the matter. [6153/16]
Amharc ar fhreagraAs the deputy may be aware, the Central Bank launched its review of tracker mortgages at the end of 2015.
AIB has informed me that it is carrying out a comprehensive and robust tracker mortgage review. AIB Group has provided €105 million relating to the refund of interest and other compensation amounts. Furthermore, the Group has recognised an additional provision of €85 million for:
(a) the accounting impact of a constructive obligation under IAS 37 for fair value remeasurement losses that will be recognised in areas where the Group will offer revised terms on mortgage accounts;
(b) tax liabilities arising from redress or other compensation which the Group may be required to discharge on behalf of impacted customers; and
(c) other costs associated with the examination.
The review is a significant undertaking, the Central Bank of Ireland has recognised the importance of giving AIB and all other industry players the necessary time to complete it. The Central Bank expects significant progress to be made by all lenders before the end of the year and AIB will certainly be meeting all the Central Bank timelines.
PTSB, who are currently under an enforcement investigation by the Central Bank of Ireland in relation to tracker mortgages have provided the following information.
In its 2015 results published on March 9th, Permanent TSB disclosed that costs to date arising from regulatory investigations into tracker mortgages, including redress payments which have been made to 90% of impacted customers, totalled approximately €40m. The Permanent TSB annual report is available at:
http://www.permanenttsbgroup.ie/~/media/Files/I/Irish-Life-And-Permanent/Attachments/pdf/2015/ptsb-full-year-report-09-03-2016.pdf.
Permanent TSB also disclosed that it had set aside approximately €100m (in addition to the €40m already incurred) to cover future costs arising from a) redressing the remaining 10pc of impacted customers and b) from the Central Bank of Ireland's wider industry review of tracker mortgages. Permanent TSB note that estimates of future costs remain subject to significant uncertainty.
Bank of Ireland have made the following disclosure on page 256 of their Annual Report;
"At 31 December 2015, the Group continues to monitor an industry-wide issue with respect to technical compliance with the UK Consumer Credit Act and is assessing an emerging industry-wide mortgage review with respect to compliance with certain contractual and regulatory requirements in Ireland. In accordance with IAS 37.92, the Group has not provided further information on these issues.".
The Bank of Ireland annual report is available at https://investorrelations.bankofireland.com//wp-content/assets/BOI-Annual-Report-2015.pdf.
162. Deputy Pearse Doherty asked the Minister for Finance when the Central Bank of Ireland's investigation into tracker mortgages will be concluded; the date he will revive it; the date the banks will revive it; and when it will be publically available. [6154/16]
Amharc ar fhreagraI understand that the question should have read 'receive' instead of 'revive' and I will answer the question accordingly.
The Central Bank have informed me that with regard to the examination of tracker mortgage related issues (the Examination), it is important that each lender carries out a comprehensive and robust review of their mortgage books, which achieves a fair outcome for all customers. While the Central Bank wish to have the Examination completed as soon as possible, it also recognises that this is potentially a significant undertaking for lenders and it is important that they are given the necessary time to complete it.
I have been told that the Central Bank expects significant progress to be made by all lenders before the end of 2016 and the Examination will remain a priority for as long as it takes to address all issues and deliver the right outcomes for customers. The Central Bank have said that they will provide public updates through their web-site throughout the Examination, with the next update to be provided by the end of April 2016.
163. Deputy Pearse Doherty asked the Minister for Finance the number of proposals from the credit union movement the Central Bank of Ireland or he has received related to social housing; the action taken to date to implement these proposals; and if he will make a statement on the matter. [6155/16]
Amharc ar fhreagra180. Deputy Joan Collins asked the Minister for Finance further to Parliamentary Question No. 30 of 18 November 2015, the position regarding the progression of the proposal from his officials. [6255/16]
Amharc ar fhreagra181. Deputy Róisín Shortall asked the Minister for Finance his views on the proposal from the League of Credit Unions to make deposits available to approved housing bodies in order to fund a major public housing programme; and if he will make a statement on the matter. [6270/16]
Amharc ar fhreagraI propose to take Questions Nos. 163, 180 and 181 together.
The Department of the Environment, Community and Local Government is the Department primarily responsible for the formulation and implementation of policy and for the preparation of legislation in relation to housing.
I have been informed that Minister Alan Kelly and Minister of State Paudie Coffey at the Department of the Environment, Community and Local Government met with the Irish League of Credit Unions in December 2015 to discuss a submission containing a proposal setting out a means by which funding could be provided to Approved Housing Bodies, by credit unions, for the development of social housing.
While the Registrar of Credit Unions at the Central Bank is the independent regulator of credit unions, bilateral engagement has taken place between my Department and the Department of Environment to consider the potential regulatory and legislative implications of credit union involvement in social housing funding.
The Central Bank commenced a number of new regulations for credit unions on 1 January 2016. Prior to their commencement, following careful consideration, some modifications were made, including to Regulation 25(2) which makes reference to the fact that the Central Bank may prescribe, in accordance with section 43 of the Credit Union Act 1997, further classes of investments for credit unions which may include investments in projects of a public nature. The effect of these modifications is that regulation 25(2) now specifically provides that investment in projects of a public nature can include, but are not limited to, investments in social housing projects.
Although proposals received to date are at a very early stage of development, my Department is always open to meeting with credit unions and their representative bodies to discuss new ideas.
While the Government recognises the important role of credit unions as a volunteer co-operative movement in this country, the Government's priorities remain the protection of members' savings, the financial stability of credit unions and the sector overall and it is determined to support a strengthened and growing credit union movement.
164. Deputy Pearse Doherty asked the Minister for Finance if he will confirm that the Credit Union Advisory Committee will carry out a review of the implementation of the recommendations of the Commission of Credit Unions to be published by June 2016; and if he will make a statement on the matter. [6156/16]
Amharc ar fhreagraIn December 2015 I invited the Credit Union Advisory Committee (CUAC) to carry out a review of the Implementation of the Recommendations set out in the Report of the Commission on Credit Unions.
Work on the review has commenced. I have been informed that as part of the review the CUAC has had discussions with a number of credit union stakeholders to date. Those discussions will inform the final report, the findings of which, including any recommendations, are expected to be presented to the Minister for Finance by 30 June 2016 for publication thereafter.
165. Deputy Pearse Doherty asked the Minister for Finance when he will make a decision on the contributions by financial institutions to the deposit guarantee directive; if he will look favourably on the credit union movement's request that he uses the discretion allowed to reduce the burden on the movement; and if he will make a statement on the matter. [6157/16]
Amharc ar fhreagraThe Deposit Guarantee Scheme (DGS) protects depositors in the event of a bank, building society or credit union, authorised by the Central Bank of Ireland being unable to repay deposits. The DGS protects depositors up to €100,000 per person per institution.
While Article 13(1) of the DGS Directive states that Member States may provide for lower contributions for low-risk sectors regulated under national law, this must be read in conjunction with the entirety of Article 13 and, in particular, Article 13(2) which states that the method for calculating contributions to the DGS shall be approved by the competent authority which is the Central Bank, in co-operation with the designated authority, which is also the Central Bank.
In accordance with the requirements of Article 13, the European Banking Authority (EBA) issued guidelines on methods for calculating contributions to DGSs. Competent authorities must ensure that these guidelines are applied by DGSs when developing methods for calculating risk-based contributions by their members. The Central Bank as the competent authority has indicated that it intends to follow those guidelines.
I have been informed by the Central Bank that the calculation methodology currently being developed will assess and rank each credit institution separately. Therefore, individual credit unions will be separately assessed and ranked, and those deemed to be lower risk under the risk categories as set out in the EBA guidelines will pay a lower contribution. Conversely, individual credit unions deemed to be higher risk under these risk categories will pay a higher contribution.
It is important to highlight that neither the Minister for Finance nor the Central Bank can act outside the parameters of Article 13 as a whole, which gives the Central Bank the mandate to determine and calculate risk based contributions.
166. Deputy Pearse Doherty asked the Minister for Finance his plans to regulate the actions of so-called vulture funds operating within the State; and if he will make a statement on the matter. [6158/16]
Amharc ar fhreagraAs the Deputy is aware, the Consumer Protection (Regulation of Credit Servicing Firms) Act, 2015 was enacted on 8 July 2015 and was introduced to augment the consumer protection framework to address those circumstances where loans were sold by the original lender to an unregulated firm. The 2015 Act introduced a regulatory regime for a new type of entity called a 'credit servicing firm'. Credit Servicing Firms are now subject to the provisions of Irish financial services law that apply to 'regulated financial service providers'. This ensures that relevant borrowers, whose loans are sold to third parties, maintain the same regulatory protections they had prior to the sale, including under the various statutory codes (such as the Consumer Protection Code, Code of Conduct on Mortgage Arrears, Code of Conduct for Business Lending to Small and Medium Enterprises and the Minimum Competency Code) issued by the Central Bank of Ireland and the Central Bank (Supervision and Enforcement) Act 2013 (Section 48) (Lending to Small and Medium-Sized Enterprises) Regulations 2015 which come into operation on 1 July 2016.
Landlord-tenant relations are also governed by multiple pieces of legislation (mainly under the aegis of my colleague, the Minister for the Environment, Community and Local Government) and the landlord/owner of the property is restricted in what they can do in relation to removal of tenants from a property. I understand that these restrictions are the same whether the landlord bought the property, built the property themselves, became a landlord as a result of renting out what was formerly a principal dwelling house or acquired the property by other means such as enforcing loans secured on the property.
In relation to SMEs or farm borrowers, the Credit Review Office helps those who have had an application for credit of up to €3 million declined or reduced by the main banks, and who feel that they have a viable business proposition. In addition, the Credit Review Office website, www.creditreview.ie, contains an article with useful information to assist borrowers whose loan has been sold on to another lender.
167. Deputy Pearse Doherty asked the Minister for Finance the consultations or discussions his Department has been involved in regarding establishing an off-book funding mechanism for housing; if he will report on these discussions; and if he will make a statement on the matter. [6159/16]
Amharc ar fhreagraAs the Deputy is aware, in November 2014, the Department of Environment Community and Local Government (DECLG) launched their Social Housing Strategy 2020 as part of a multi-annual housing expenditure programme. The strategy provided for the establishment of a working group to examine the viability of off-balance sheet mechanisms for the delivery of new social housing. In this context, the Group is considering proposals from a wide variety of developers, investors, financiers, Approved Housing Bodies and others who expressed an interest in being involved in the provision or financing of social housing across the country. This work is still ongoing and officials in my Department are assisting the DECLG, which is primarily responsible for the formulation and implementation of the social housing strategy.
The Deputy will be further aware that officials from my Department and DECLG have met with Credit Union sector representatives to examine how they can assist in the area of social housing. These proposals are at an early stage of development, and I should point out that any such proposals are subject to the approval of the Registrar of Credit Unions at the Central Bank of Ireland, which is the independent regulator for the credit union sector.
