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 Header Item Written Answers Nos. 175-94
 Header Item Pension Provisions
 Header Item Bank Codes of Conduct
 Header Item Charities and Voluntary Organisations
 Header Item Pension Provisions
 Header Item Departmental Staff Rehiring
 Header Item Property Taxation Collection
 Header Item Property Taxation Application
 Header Item IBRC Liquidation
 Header Item Tax Code
 Header Item Tax Credits
 Header Item Tax Credits
 Header Item NAMA Staff Recruitment
 Header Item Tax Yield
 Header Item VAT Rates Reductions

Tuesday, 2 July 2013

Dáil Éireann Debate
Vol. 809 No. 2

First Page Previous Page Page of 92 Next Page Last Page

Written Answers Nos. 175-94

Pension Provisions

 175. Deputy Jack Wall Information on Jack Wall Zoom on Jack Wall asked the Minister for Finance Information on Michael Noonan Zoom on Michael Noonan his views on a submission (details supplied) regarding pensions; if the stated position is acceptable under current legislation; and if he will make a statement on the matter.  [31483/13]

 179. Deputy Finian McGrath Information on Finian McGrath Zoom on Finian McGrath asked the Minister for Finance Information on Michael Noonan Zoom on Michael Noonan his views regarding a Permanent TSB pension scheme in respect of a person (details supplied); and if he will make a statement on the matter. [31539/13]

 192. Deputy Michael Healy-Rae Information on Michael Healy-Rae Zoom on Michael Healy-Rae asked the Minister for Finance Information on Michael Noonan Zoom on Michael Noonan his views on correspondence (details supplied) regarding pensions; and if he will make a statement on the matter. [31711/13]

 274. Deputy Seán Ó Fearghaíl Information on Seán Ó Fearghaíl Zoom on Seán Ó Fearghaíl asked the Minister for Finance Information on Michael Noonan Zoom on Michael Noonan if he will address the serious concerns raised in correspondence (details supplied) regarding a deferred pension scheme; and if he will make a statement on the matter. [32157/13]

Minister for Finance (Deputy Michael Noonan): Information on Michael Noonan Zoom on Michael Noonan I propose to take Questions Nos. 175, 179, 192 and 274 together.

As the Deputies will be aware the pension arrangements for the staff of Permanent TSB are a matter for the management of that company and for the trustees of the relevant pension schemes. It would not be appropriate for me to comment on the implications for an individual arising out of any proposed restructuring by Permanent TSB of its defined benefit pension schemes. I understand that that the matter has recently been heard by the Labour Court.

Bank Codes of Conduct

 176. Deputy Joe McHugh Information on Joe McHugh Zoom on Joe McHugh asked the Minister for Finance Information on Michael Noonan Zoom on Michael Noonan if he will review the code of conduct on mortgage arrears for the credit and insurance undertakings to establish bank processes in respect of possessing homes and debt collection; and if he will make a statement on the matter. [31514/13]

Minister for Finance (Deputy Michael Noonan): Information on Michael Noonan Zoom on Michael Noonan The Central Bank has just concluded a review of the Code of Conduct on Mortgage Arrears (CCMA) and I have no plans to repeat the review. The Central Bank's review included a public consultation process, with in excess of 230 submissions received. The revised CCMA was published on 27 June 2013 and came into effect yesterday, 1 July 2013. The submissions made, as well as feedback document outlining the Central Bank’s response to some of the main issues raised, are available on the Central Bank’s website www.centralbank.ie. The revised Code provides a framework which complements the work of the Central Bank which has for some time been intensively working with lenders to ensure that they have a range of longer term options, such as 'trade-down mortgages', 'split mortgages' and 'sale by agreement' or other appropriate options as may be developed by lenders for their customers with distressed mortgages.   The CCMA provides an integrated and cohesive package of consumer protection measures for borrowers facing or in mortgage arrears. It reflects the current mortgage arrears situation and seeks to deliver on the following principles, to:

- ensure appropriate resolution of each borrower’s arrears situation;

- ensure that lenders deal with borrowers in a fair and transparent manner;

- support and facilitate meaningful engagement between lenders and borrowers; and

- ensure borrower awareness of the benefits of co-operating with their lender, and the consequences of not co-operating.

  With regard to restructuring of mortgage loans, the CCMA requires lenders to explore all of the options for alternative repayment arrangements offered by that lender for each particular case.

In addition, where an alternative repayment arrangement is offered by a lender, the revised CCMA requires the lender to outline the reasons why the alternative arrangement offered is considered to be appropriate and sustainable, as well as the advantages and any disadvantages or potential disadvantages of any arrangement offered, with regard to the individual circumstances of the borrower.

  Question No. 177 answered with Question No. 87.

Charities and Voluntary Organisations

 178. Deputy John McGuinness Information on John McGuinness Zoom on John McGuinness asked the Minister for Finance Information on Michael Noonan Zoom on Michael Noonan if an application in respect of an organisation (details supplied) will be expedited and approved. [31531/13]

Minister for Finance (Deputy Michael Noonan): Information on Michael Noonan Zoom on Michael Noonan This is a matter for the Revenue Commissioners. I am advised by Revenue that the organisation referred to by the Deputy has a charitable tax exemption and recently sought approval to amend its Memorandum and Articles of Association. The required approval was granted by Revenue on 16 May. I am informed that Revenue made direct contact with the charity on foot of the Deputy’s representation to ensure there were no further issues requiring clarification. The charity confirmed that there are no outstanding issues.

  Question No. 179 answered with Question No. 175.

Pension Provisions

 180. Deputy John McGuinness Information on John McGuinness Zoom on John McGuinness asked the Minister for Finance Information on Michael Noonan Zoom on Michael Noonan if he will address the issues that have been raised relative to retirement funds such as approved retirement funds and approved minimum retirement funds and the fact that persons have lost money which was set aside for their pension funds; and if he will make a statement on the matter. [31541/13]

Minister for Finance (Deputy Michael Noonan): Information on Michael Noonan Zoom on Michael Noonan I am advised that there are a small number of pension funds that may not be entitled to compensation under the deposit guarantee scheme, DGS, or the eligible liabilities guarantee scheme, ELG, due to the nature of the products or deposit options in which those account holders invested. It is important to note that at the time the products were offered to customers there was no additional guarantee provided by the State in respect of those products.

It was always the case that the ELG scheme covered only those liabilities which were entered into during the issuance window. In relation to the DGS Scheme, I am advised that the DGS Regulations explicitly specify which deposits are excluded from coverage under that Scheme. Deposits held by pension funds and retirement funds fall within the category of excluded deposits, though small self-administered pension schemes are included. The decision to include SSAPs and exclude ARFs, AMRFs and other pension funds/instruments was based on the fact that SSAPs are usually small schemes administered by the member(s) of the scheme whilst ARFs are managed by a qualified fund manager through a credit or investment institution.

There are currently no plans to alter the terms of the Deposit Guarantee Scheme.

If customers are concerned about the coverage for their pension fund they can contact either my Department in respect of queries on the ELG Scheme or the Central Bank with queries about the DGS Scheme.

  Question No. 181 answered with Question No. 172.

Departmental Staff Rehiring

 182. Deputy Thomas Pringle Information on Thomas Pringle Zoom on Thomas Pringle asked the Minister for Finance Information on Michael Noonan Zoom on Michael Noonan the number of temporary clerical officers who have been employed by his Department over each of the past three years; the number of those who have been retired public-civil servants; his views on whether his Department should employ retired staff in these positions in view of the level of youth unemployment here; and if he will make a statement on the matter.  [31573/13]

Minister for Finance (Deputy Michael Noonan): Information on Michael Noonan Zoom on Michael Noonan The following is the position with regard to the employment of temporary clerical officers over the last three years.

Year Number of Temporary Clerical

Officers employed
Number of retired

public/civil servants
2011 Nil Nil
2012 6 Nil
2013 Nil Nil


The clerical officers applied for temporary positions in the Public Service through the Public Appointments Service, (PAS) which is the centralised provider of recruitment, assessment and selection services for the Civil Service. The terms and conditions for the recruitment of temporary clerical officers is determined by the Minister for Public Expenditure and Reform and managed by PAS. PAS services can be viewed at www.publicjobs.ie.

Property Taxation Collection

 183. Deputy Pearse Doherty Information on Pearse Doherty Zoom on Pearse Doherty asked the Minister for Finance Information on Michael Noonan Zoom on Michael Noonan the payment options available to a person wishing to pay the local property tax with no current account and whose only income is jobseeker's benefit; and if he will consider allowing persons in such cases to pay by standing order, as it is the cheapest option. [31585/13]

Minister for Finance (Deputy Michael Noonan): Information on Michael Noonan Zoom on Michael Noonan I am advised by the Revenue Commissioners that Revenue does not use standing orders for tax payments because they do not facilitate the orderly collection of taxes for the Exchequer. For example, the customer sets the date of payment of a standing order. Where there are insufficient funds on the date payment is due, no payment will be made. Revenue will not be notified of any unpaid standing orders and would be obliged to check each month to ensure each standing order is paid, and to pursue each monthly payment with the taxpayer. Managing large amounts of standing orders creates significant reconciliation difficulties.

  By contrast, direct debit gives greater certainty and facilitates the orderly collection of taxes while ensuring safeguards for customers. A direct debit requires the customer (the payer) to authorise Revenue (the payee) to take a payment. The customer can cancel the payment at any time. From an Exchequer point of view, if the payment goes unpaid, Revenue will be advised within five working days and will be able to pursue payment then. This is not possible with standing orders. In addition, with direct debits Revenue will always know the source of the payment and will be able to update the customer record electronically. It is not possible to manage standing orders in this fashion.

  Accordingly, the option of paying LPT by standing order is not possible. Revenue has provided a very wide range of payment options ranging from debit/credit cards to phased arrangements, including payment via a range of service providers. It would not be reasonable for me to suggest that Revenue would move to a payment system which is riskier from the Exchequer's point of view and is less efficient in that it leads to administrative delays and costs.

  By way of general comment, it is my understanding that it would be unusual for financial institutions to make standing orders available other than from current accounts and that the types of accounts which are suitable for standing orders would also usually be suitable for direct debit.

Finally, as I have previously informed the House, an individual whose only income is a Department of Social Protection (DSP) payment, such as jobseeker's benefit, will qualify for a deferral of LPT. Full details of all payment methods and deferral arrangements are available on Revenue's website www.revenue.ie.

Property Taxation Application

 184. Deputy Finian McGrath Information on Finian McGrath Zoom on Finian McGrath asked the Minister for Finance Information on Michael Noonan Zoom on Michael Noonan if those who are on interest-only mortgages are exempt from local property tax; and if he will make a statement on the matter.  [31595/13]

Minister for Finance (Deputy Michael Noonan): Information on Michael Noonan Zoom on Michael Noonan The Government decided the LPT should apply to all owners of residential property with limited exemptions. Limiting the exemptions available allows the rate to be kept low for those liable persons who do not qualify for an exemption.

There is no specific exemption for property owners who have an interest only mortgage. However, such individuals may be eligible for a deferral of LPT should they meet the qualifying conditions. To qualify for a deferral, the residential property must be occupied as a sole or main residence. The gross annual income thresholds for a full deferral will be €15,000 for a single person and €25,000 for a couple, whether married persons, civil partners or qualified cohabitants. A person may claim a deferral if their gross income will not, "as can reasonably be foreseen at the liability date" exceed these thresholds in that year.

A deferral of up to 50% of the LPT liability will be possible where the gross annual income of the liable person does not exceed €25,000 for a single person or €35,000 for married persons/civil partners/cohabitants.

The full and partial deferral thresholds may be increased in the case of properties occupied as a sole or main residence and subject to a mortgage, which may of particular relevance to owner-occupiers with an "interest only" mortgage. In such cases, the gross income thresholds may be increased by 80% of the gross mortgage interest payments. The deferral option in such qualifying cases will apply until the end of 2017, as long as the claimant continues to satisfy the qualifying criteria.

IBRC Liquidation

 185. Deputy Maureen O'Sullivan Information on Maureen O'Sullivan Zoom on Maureen O'Sullivan asked the Minister for Finance Information on Michael Noonan Zoom on Michael Noonan if he will seek a report from the Chairman of the Irish Bank Resolution Corporation identifying the number of instances in 2007 and 2008 where voluntary, non-profit organisations with deposits in Anglo Irish Bank converted those deposits into apparently higher-yielding shares; the typical number of bank-initiated contacts with such organisations in advance of deposits being moved into shares; the aggregate loss to the affected depositing shareholding organisations arising from Anglo’s campaign to effect the transfer of deposits made by such bodies into shares over the period; and if he will make a statement on the matter. [31617/13]

Minister for Finance (Deputy Michael Noonan): Information on Michael Noonan Zoom on Michael Noonan As the Deputy will be aware, on 7 February 2013 the Oireachtas passed legislation (Irish Bank Resolution Corporation Act 2013), appointing joint Special Liquidators to IBRC with immediate effect to wind up its business and operations. The Chairman of IBRC, along with the Board were relieved of their duties on that day and therefore it would not be appropriate for me to request a report as suggested. Unfortunately I am unable to interfere in operational matters in the bank. Should customers have a specific complaint in relation to the conduct of the bank they should take the matter up with the Special Liquidators of IBRC in the first instance. It is the Special Liquidators who now have responsibility for the day to day management of the bank.

Tax Code

 186. Deputy Pearse Doherty Information on Pearse Doherty Zoom on Pearse Doherty asked the Minister for Finance Information on Michael Noonan Zoom on Michael Noonan if he will consider developing a mechanism whereby new contractors setting up businesses may avail of a reduced rate of relevant contracts tax similar to that of existing contractors; his views that such a provision would be conducive to the creation of employment; and if he will make a statement on the matter. [31637/13]

Minister for Finance (Deputy Michael Noonan): Information on Michael Noonan Zoom on Michael Noonan I am informed by the Revenue Commissioners that Relevant Contracts Tax (RCT) provides for withholding tax to be applied on certain payments made by Principals to subcontractors and is designed to promote tax compliance in the construction, forestry and meat processing sectors. The tax withheld by Principal contractors is paid over to Revenue and the subcontractor is given credit for any tax withheld. From 1 January 2012, the Revenue Commissioners have made available a new online system for the operation of RCT and the system provides for three rates of deduction - zero, 20% and 35%. The zero rate recognises that it would be undesirable to deduct tax from compliant subcontractors. One criterion for qualifying for the 0% rate is that the subcontractor has throughout the previous three years complied with all the obligations imposed by the Tax Acts, Capital Gains Tax Acts and the Value Added Tax Acts in relation to (i) the payment or remittance of taxes, interest and penalties, (ii) the delivery of returns and (iii) the supply, on request, of accounts or other information to Revenue. Notwithstanding this, the legislation provides for the granting of a 0% rate where a person satisfies Revenue that the three year compliance history ought to be disregarded.

For new tax registrations, the Revenue system automatically grants a rate of 20% as a three year compliance history does not exist. However, this may be changed to 0% if the subcontractor satisfies the Revenue that in all the circumstances the three year compliance period ought to be disregarded.

I am also advised by the Revenue Commissioners that the rate of deduction is reviewed periodically and, if a subcontractor who has been allocated the 20% rate meets the necessary conditions, the deduction rate is adjusted to zero. Similarly where a subcontractor no longer meets the conditions associated with either the zero or 20% rate the deduction rate is adjusted upwards as appropriate.

RCT plays an important role in ensuring tax compliance by subcontractors in the relevant sectors and it is the view of the Revenue Commissioners that it would not be appropriate to automatically allocate a zero rate to newly established subcontractors. Revenue has to be satisfied that a subcontractor has established a satisfactory record of tax compliance.

Tax Credits

 187. Deputy Pearse Doherty Information on Pearse Doherty Zoom on Pearse Doherty asked the Minister for Finance Information on Michael Noonan Zoom on Michael Noonan the revenue that would be raised for the Exchequer if tax credits for a person's earnings were capped at €100,000, and of every €2 earned after €100,000, €1 in tax credits was lost.  [31665/13]

Minister for Finance (Deputy Michael Noonan): Information on Michael Noonan Zoom on Michael Noonan I am advised by the Revenue Commissioners that the estimated full year yield to the Exchequer, estimated by reference to 2013 incomes, of restricting the main personal and employee tax credits in the manner mentioned by the deputy would be of the order of €460 million. This estimate is derived from the Revenue tax-forecasting model using actual data for the year 2010 adjusted as necessary for income and employment trends in the interim. It is therefore provisional and likely to be revised.

It should also be noted that a married couple who has elected or has been deemed to have elected for joint assessment is counted as one tax unit.

Tax Credits

 188. Deputy Jack Wall Information on Jack Wall Zoom on Jack Wall asked the Minister for Finance Information on Michael Noonan Zoom on Michael Noonan the position regarding an application for incapacitated child credit in respect of a person (details supplied) in County Kildare; and if he will make a statement on the matter. [31673/13]

Minister for Finance (Deputy Michael Noonan): Information on Michael Noonan Zoom on Michael Noonan I have been advised by the Revenue Commissioners that the person’s claim for incapacitated child credit has been processed. A tax credit certificate for 2013 and PAYE Balancing Statement (P21) for 2012, including the credit, issued to the person concerned on 12 April 2013. A PAYE Balancing Statement (P21) for 2011 will issue shortly to include the credit.

NAMA Staff Recruitment

 189. Deputy Michael Healy-Rae Information on Michael Healy-Rae Zoom on Michael Healy-Rae asked the Minister for Finance Information on Michael Noonan Zoom on Michael Noonan in view of the fact that several executives of the National Asset Management Agency have taken up employment with private equity groups, his plans to tighten up regulations and guidelines relating to the movement between public and private sector; and if he will make a statement on the matter.  [31701/13]

Minister for Finance (Deputy Michael Noonan): Information on Michael Noonan Zoom on Michael Noonan The Deputy refers in his question to NAMA. I would point out that all NAMA staff are employees of the NTMA and are assigned to NAMA by the NTMA. Under the NTMA business model, all employees are recruited on the basis of individually negotiated contracts. In addition to NAMA, the NTMA carries out a range of commercial asset and liability functions on behalf of Government and its ability to successfully perform these functions is critically dependent on its ability to attract employees – often with specialist skills – from the private sector, including those at middle and senior management level. It is simply not possible for the NTMA and NAMA to carry out the work that they do on behalf of the taxpayer without recruiting the relevant expertise from outside of the public sector. Mobility with the private sector is a critical component of the NTMA model and if it is to be successful we have to accept that expertise can move in both directions. That is the basis on which close to 300 staff have been recruited to NAMA from the private sector over the past three years and it would not have been possible to move from a standing start in December 2009 to become fully operational with a €32 billion balance sheet a year later without having that ability to recruit the appropriate expertise and experience from the private sector. That expertise and experience is now producing results for NAMA: you will have noted that NAMA recently announced a profit for the second consecutive year and that it has generated cash of over €12 billion in its three years of existence.

There are extensive safeguards in place to protect the confidentiality of information held by NTMA employees, including those assigned to NAMA. Employees assigned to NAMA by the NTMA, as is the case with all other NTMA staff, are subject to Section 14 of the National Treasury Management Agency Act, 1990 which prohibits an employee from disclosing any information obtained while carrying out their duties as employees of the NTMA. Employees assigned to NAMA are also subject to a prohibition on release of confidential data under Sections 99 and 202 of the NAMA Act 2009. NTMA employees, including those assigned to NAMA, are subject to the Official Secrets Act. Contravention of these prohibitions is a criminal offence. These protections do not cease at the point of resignation but rather apply indefinitely and extend to former employees.

The notice period for NTMA employees assigned to NAMA is typically three months. NTMA contracts for employees assigned to NAMA have a provision entitling the NTMA to place the employee on garden leave at any point during the notice period during the time the employee may not work for another employer.

As was indicated by the Chief Executive of the NTMA at a meeting of the Joint Oireachtas Committee on Finance, Public Expenditure and Reform on 24 January last, the NTMA has been engaged in a review of its policy in respect of notice periods and post-termination restrictions on employment. The review commissioned by the NTMA was conducted by the law firm, Matheson, and has now been completed. Arising from the review, I am advised that the NTMA is implementing a number of changes to its employment contracts, including the introduction of longer notice periods of 3 to 6 months (up from 1 to 3 months) for middle and senior management employees and garden leave provisions to be included in all employment contracts. These changes have been introduced for new NTMA employees and existing NTMA employees as they are promoted. As I pointed out above, the three-month notice period and garden leave provisions already apply to NTMA staff assigned to NAMA.

In addition, I am advised that additional post-termination restrictions on employment are being considered on a case-by-case basis in respect of NTMA senior management employees in particular. However, the imposition of such restrictions needs to be carefully balanced against the NTMA’s need to recruit good candidates for whom such restrictions may act as a significant disincentive to taking up employment with the NTMA.

  Question No. 190 answered with Question No. 98.

  Question No. 191 answered with Question No. 87.

  Question No. 192 answered with Question No. 175.

Tax Yield

 193. Deputy Pearse Doherty Information on Pearse Doherty Zoom on Pearse Doherty asked the Minister for Finance Information on Michael Noonan Zoom on Michael Noonan the amounts of VAT, excise duty or other indirect taxes taken as a proportion of income tax, for example, for every €1 taken in income tax, €1.20 is taken in VAT.  [31717/13]

Minister for Finance (Deputy Michael Noonan): Information on Michael Noonan Zoom on Michael Noonan The table provided shows the tax revenue received to the Exchequer in the first 5 months of 2013 in respect of income tax and indirect taxes and also provides the requested ratios.

Tax Revenue end May 2013 € million Ratio to Income Tax
Income Tax 6,122.19 1.00
Value Added Tax 4,994.04 0.82
Excise Duty 1,833.03 0.30
Customs 84.96 0.01

VAT Rates Reductions

 194. Deputy Ann Phelan Information on Ann Phelan Zoom on Ann Phelan asked the Minister for Finance Information on Michael Noonan Zoom on Michael Noonan if it is envisaged that the special rate of VAT set at 9% for tourism related activities including that of restaurants and hotels initially implemented between 1 July 2011 and 31 December 2013 will be extended in view of the level of employment creation that has arisen because of this introduction and the benefits that have been passed on to the consumer since the 9% VAT rate was introduced; and if he will make a statement on the matter.  [31718/13]

Minister for Finance (Deputy Michael Noonan): Information on Michael Noonan Zoom on Michael Noonan Any proposals to maintain the 9% rate into 2014 will be considered in the context of Budget 2014.


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