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 Header Item Written Answers Nos. 53-67
 Header Item Social Insurance Rates
 Header Item NAMA Property Sales
 Header Item Banking Sector Regulation
 Header Item Mortgage Arrears Proposals
 Header Item Banking Sector Remuneration
 Header Item Banking Sector Remuneration
 Header Item NAMA Operations
 Header Item Banking Sector Regulation
 Header Item Banking Sector Regulation
 Header Item Property Taxation Application
 Header Item Property Taxation Application
 Header Item Departmental Staff Remuneration
 Header Item Student Grant Scheme Applications
 Header Item Home Tuition Scheme Provision
 Header Item Student Grant Scheme Delays

Wednesday, 12 December 2012

Dáil Éireann Debate
Vol. 786 No. 2

First Page Previous Page Page of 90 Next Page Last Page

Written Answers Nos. 53-67

Social Insurance Rates

 53. Deputy Patrick O'Donovan Information on Patrick O'Donovan Zoom on Patrick O'Donovan asked the Minister for Finance Information on Michael Noonan Zoom on Michael Noonan the names of the persons, trade or profession referred to by him during his budget speech on the removal of the blocked exemption from PRSI for income from a trade or profession; the reason these exemptions were in place up until now. [55895/12]

Minister for Finance (Deputy Michael Noonan): Information on Michael Noonan Zoom on Michael Noonan The position is as I stated in my Budget day speech on 6 December 2012, that Minister Burton will bring forward legislation to change PRSI contributions as follows:

- Where modified PRSI rate payers have income from a trade or profession, such income and any unearned income they have will be made subject to PRSI with effect from 1 January 2013.   

- Unearned income for all employees will become subject to PRSI in 2014. This means that PRSI will be payable on all income generated from wealth such as rental income, investment income, dividends and interest on deposit and savings.

  Prior to Budget 2013, modified contributors paid PRSI on earnings derived from their employment but did not pay PRSI on any other stream of income e.g. from a trade or profession, or on unearned income (dividends etc.). As a result of Budget 2013, modified contributors who have income from a trade or profession will now be subject to PRSI (at a rate of 4%) on the profits from the trade or profession and also on any unearned income that they may have. Modified contributors are generally permanent and pensionable civil and public servants recruited before 6 April 1995 for example registered doctors and dentists employed in the civil service recruited prior to 6 April 1995. Trade or profession relates to any trade or profession within the meaning of section 18 of the Taxes Consolidation Act 1997.

  As the Deputy will be aware, modified rate contributors are entitled to a state funded occupational pension based on their civil/public sector employment. Such contributors have been exempt from PRSI on other streams of earned income and unearned income on the basis that payment of PRSI on such income could give rise to additional entitlement to social insurance pensions. With the abolition of this exemption, PRSI will be charged on the earned and unearned income of modified rate contributors but will not give rise to entitlement to social insurance benefits based on the payment of this PRSI contribution.

NAMA Property Sales

 54. Deputy Patrick O'Donovan Information on Patrick O'Donovan Zoom on Patrick O'Donovan asked the Minister for Finance Information on Michael Noonan Zoom on Michael Noonan the number of builders or developers on the books at the National Asset Management Agency; the number of these on salaries of €200,000 or more and the rationale behind paying these persons salaries; and if he will make a statement on the matter.  [55896/12]

Minister for Finance (Deputy Michael Noonan): Information on Michael Noonan Zoom on Michael Noonan As at the 30th of June 2012 NAMA had assessed 800 Debtor Business Plans. NAMA advises me that it permits appropriate overheads where necessary for the preservation and enhancement of the value of property securing its loans. Overhead costs typically fall into two categories:

(1) Cost associated with the repair and maintenance of properties, insurance premia, local authority rates and professional fees. These are essential costs which would be incurred regardless of whether the assets are managed by debtors or receivers.

(2) Overhead costs also include allowances for the remuneration of debtors and the staff employed by the debtor to manage the assets. I am informed by NAMA that the alternative in these cases is to appoint receivers and that receiver costs tend to be substantially higher than debtor and associated staff salary costs.

As the Deputy may be aware, the NAMA Chief Executive advised the Dáil Committee of Public Accounts (PAC) in July and the Joint Oireachtas Committee on Finance, Public Expenditure and Reform in recent weeks that the Agency has permitted 168 principals to retain salaries from rental and other income generated by cash producing assets. NAMA’s analysis shows that 17% or 29 principals are authorised to retain income of up to €49,000; a further 43% or 73 principals are authorised to retain income of between €50,000 and €99,000; 23% or 38 principals are authorised to retain income of between €100,000 and €149,000; 15% or 25 principals are authorised to retain income of between €150,000 and €190,000; and 2% or 3 principals are authorised to retain income of €200,000. There are no cases in which principals have been authorised by NAMA to retain salaries in excess of €200,000.

Banking Sector Regulation

 55. Deputy Gerry Adams Information on Gerry Adams Zoom on Gerry Adams asked the Minister for Finance Information on Michael Noonan Zoom on Michael Noonan further to the announcement that Irish Bank Resolution Corporation is to sue a company (details supplied) for actions it took during its time as auditors of the bank in advance of its nationalisation, if he will detail if he was consulted in advance of this decision being made. [55914/12]

Minister for Finance (Deputy Michael Noonan): Information on Michael Noonan Zoom on Michael Noonan I have been advised that IBRC issued proceedings on 27 November 2012 against the company referred to. These proceedings relate to the role of the company as auditors to Anglo Irish Bank Plc. prior to nationalisation. As this matter is now the subject of litigation, it would be inappropriate for me to comment further at this time.

Mortgage Arrears Proposals

 56. Deputy Gerry Adams Information on Gerry Adams Zoom on Gerry Adams asked the Minister for Finance Information on Michael Noonan Zoom on Michael Noonan further to Parliamentary Question No. 70 on 28 November 2012, if in view of the changed banking environment in Ireland since 1991 he intends to legislate to protect homeowners in the event a financial institution in Ireland does not comply with the voluntary code in the transfer of its residential mortgages; if he is concerned that the transfer of buy to let residential loans or owner occupier residential loans to a foreign capital provider runs the risk of that capital provider being more aggressive in repossessing people’s primary residences than would be the case with a traditional bank; and if he will make a statement on the matter.  [55915/12]

Minister for Finance (Deputy Michael Noonan): Information on Michael Noonan Zoom on Michael Noonan As I stated, on 28 November 2012, in reply to a question regarding this matter, the ‘Code of Practice on the Transfer of Mortgages’ is a voluntary code. The Code was issued by the Central Bank in 1991 to financial institutions involved in the provision and transfer of mortgage credit. A copy of the Code and a list of regulated financial institutions are available at www.centralbank.ie.   As the Code is voluntary in nature, it is not subject to the Central Bank’s administrative sanctions procedure. The Code states that it applies to a loan secured by the mortgage on residential property. For the purposes of this Code, residential property is not limited to the principal private residence of the mortgagor. I have been advised by the Central Bank that, to date, the Bank has not received complaints regarding non compliance with this Code.

  The Deputy mentions concerns regarding foreign capital providers being more aggressive than traditional banks in the repossession of primary residences. The Central Bank has advised me that, to date, no complaints have been made to the Bank in this regard. I have no proposals to recommend to Government that legislation affecting this Code be introduced.

Banking Sector Remuneration

 57. Deputy Gerry Adams Information on Gerry Adams Zoom on Gerry Adams asked the Minister for Finance Information on Michael Noonan Zoom on Michael Noonan further to Parliamentary Question No. 70 of the 28 November 2012, the reason it is the case that the increase in pay for Irish Bank Resolution Corporation employees which according to the chairman of Anglo Irish Bank in his statement in the Oireachtas Committee on Finance, Public Expenditure and Reform on 31 October 2012, was for a limited number of persons is not readily available; if he will confirm if this information which covers evidently only a limited number of persons is now readily available; if the information about current and increased salaries is not available if he will confirm the total limited number of persons who received a pay increase as referred to by the chairman of IBRC; and if he will make a statement on the matter.  [55916/12]

Minister for Finance (Deputy Michael Noonan): Information on Michael Noonan Zoom on Michael Noonan I am advised by IBRC that a large volume of information regarding remuneration structures across the Bank has been recently supplied as part of the Mercer Remuneration Review as commissioned by the Department of Finance. This information is currently being analysed as part of the review. I have committed to publishing the details underpinning the review in view of the public interest in the matter. The report will provide a comprehensive and professional analysis of remuneration structures and levels across the Covered Banks both now and before the onset of the banking crisis.

Banking Sector Remuneration

 58. Deputy Gerry Adams Information on Gerry Adams Zoom on Gerry Adams asked the Minister for Finance Information on Michael Noonan Zoom on Michael Noonan further to Parliamentary Question No. 72 of 28 November 2012, if he will detail the cumulative salary cost to Irish Bank Resolution Corporation for the estimated 230 full-time people in IBRC working on the National Asset Management Agency portfolio for 2010, 2011 and projected for 2012; and if he will make a statement on the matter.  [55917/12]

Minister for Finance (Deputy Michael Noonan): Information on Michael Noonan Zoom on Michael Noonan I have been informed that it is not IBRC practice to separately breakdown the staffing cost element of its recharge to NAMA. As disclosed in the Bank’s 2012 Interim Report a total of 256 people either work directly in or provide support to the Bank’s NAMA unit. IBRC’s 2012 Interim Report, which covers the period from January to June 2012, disclosed that NAMA were charged €15m in relation to the servicing of loans acquired from the Bank. The corresponding charge for IBRC for 2011 was €28m (includes former INBS for H2 2011) and for the former Anglo Irish Bank for 2010 was €7m. The figures quoted include all costs, including staff costs, incurred in servicing this loan portfolio.

NAMA Operations

 59. Deputy Gerry Adams Information on Gerry Adams Zoom on Gerry Adams asked the Minister for Finance Information on Michael Noonan Zoom on Michael Noonan further to Parliamentary Question No. 73 of the 28 November 2012, if he will explain the reason the other State debt management and collection agency, National Asset Management Agency discloses the number of borrowers who are or are not cooperating with NAMA, also discloses rental income received in relation to repossessed collateral but IBRC the State’s second debt management and collection agency does not; if he will consider instructing IBRC management to follow similar transparency guidelines as NAMA in these regards; and if he will make a statement on the matter.  [55918/12]

Minister for Finance (Deputy Michael Noonan): Information on Michael Noonan Zoom on Michael Noonan IBRC is an asset recovery bank authorised and licensed by the Central Bank of Ireland under the Central Bank Act 1971 as a credit institution and an insurance intermediary. In line with its banking peers IBRC’s current practice is to disclose information pertaining to the business on set reporting dates, twice annually.

Banking Sector Regulation

 60. Deputy Gerry Adams Information on Gerry Adams Zoom on Gerry Adams asked the Minister for Finance Information on Michael Noonan Zoom on Michael Noonan further to Parliamentary Question No. 75 on the 28 November 2012, if he will explain the reason it would be commercially sensitive for Bank of Ireland to reveal the sought after information when the chief executive of Allied Irish Banks in their presentation to the Oireachtas Committee on Finance, Public Expenditure and Reform on 31 October 2012 detailed that of the €3.5 billion target, €600 million was specifically new lending and they did not call giving someone a new facility new lending; if he will provide a like for like figure from Bank of Ireland with respect to the €600 million detailed by AIB; and if he will make a statement on the matter.  [55919/12]

Minister for Finance (Deputy Michael Noonan): Information on Michael Noonan Zoom on Michael Noonan The FOI Acts give a definition of “commercially sensitive information” as “information whose release could prejudice the competitive position of the organisation”. The pillar banks regularly supply information to my Department and the Central Bank and much of this information is described by the banks as commercially sensitive.    In some cases, the banks may be willing to put the information requested into the public domain notwithstanding that it may be commercially sensitive. To my knowledge, neither pillar bank has published information on new lending to new customers.

  As the Deputy pointed out, the CEO of AIB told the Joint Committee on Finance, Public Expenditure and Reform that €600 million of its lending was specifically new lending. This includes both brand new facilities and top ups/increases to existing facilities but only the additional element of top ups is included in the €600 million.

  The CEO of Bank of Ireland told the same Committee that at least 97% of the €3.5 billion will be new or increased lending to existing or new customers. He also said that Bank of Ireland do not count restructured lending in their targets. Officials in my Department are continuing to engage with both banks and with the Central Bank and Credit Review Office on these numbers.

The lending targets imposed on the two pillar banks are only a part of the Government’s strategy to ensure that viable SMEs are able to access the credit they need. In my recent budget statement, I announced a ten point tax reform plan to help small businesses. I also announced the sanctioning of the appointment of additional reviewers in the Credit Review Office to ensure that SMEs appealing the banks’ decisions to decline credit receive a considered and timely response to their application. We are currently engaged in a public consultation process in order to see what more the Credit Review Office can do to ensure SMEs are getting the support on bank lending they require and I would welcome any proposals from the Deputy on this topic which can be submitted to croassessment@finance.gov.ie. I would strongly urge viable SMEs to appeal any refusals of credit to the Credit Review Office.

Banking Sector Regulation

 61. Deputy Gerry Adams Information on Gerry Adams Zoom on Gerry Adams asked the Minister for Finance Information on Michael Noonan Zoom on Michael Noonan further to Parliamentary Questions Nos. 76 and 77 of 28 November 2012, if he will explain the reason it is the case that PTSB, AIB and the National Asset Management Agency, three State owned institutions can provide the requested data but Irish Bank Resolution Corporation deems this material commercially sensitive; if he will consider in view of this fact instructing Irish Bank Resolution Corporation to provide this data or at the very least provide an explanation for what distinguishes IBRC’s commercially sensitive concerns relating to this data from the other State owned institutions; and if he will make a statement on the matter.  [55920/12]

Minister for Finance (Deputy Michael Noonan): Information on Michael Noonan Zoom on Michael Noonan I have been informed by IBRC that this information is commercially sensitive to its operation due to the Bank’s unique position in the Irish market place as an asset recovery bank in wind down and cannot be disclosed for this reason.

Property Taxation Application

 62. Deputy Michael McGrath Information on Michael McGrath Zoom on Michael McGrath asked the Minister for Finance Information on Michael Noonan Zoom on Michael Noonan if the estimated €250 million revenue from the introduction of a property tax in 2013 is gross or net of the abolition of the household charge; if the budget projections take account of the abolition of the household charge; and if he will make a statement on the matter.  [55992/12]

Minister for Finance (Deputy Michael Noonan): Information on Michael Noonan Zoom on Michael Noonan As I indicated in the Budget, the Local Property Tax will commence with effect from 1 July 2013 for the second half of the year. There will accordingly be a half year’s property charge in 2013. The estimated yield of €250 million from the Local Property Tax in 2013 is solely related to that tax – it is the “gross” yield, in terms of the question asked by the Deputy. However, the overall Budget projections take account of the cessation of the Household Charge. Allowance has been made for the expected impact of waivers and deferrals during the year. The full year yield in 2014 from the Local Property Tax is estimated at €500m.

Property Taxation Application

 63. Deputy Michael McGrath Information on Michael McGrath Zoom on Michael McGrath asked the Minister for Finance Information on Michael Noonan Zoom on Michael Noonan if his projections for revenue from the property tax are based on the estimates for the number of properties in each value band as contained in the Thornhill report and specifically that 0.04% of houses are valued at more than €1 million; and if he will make a statement on the matter.  [55993/12]

Minister for Finance (Deputy Michael Noonan): Information on Michael Noonan Zoom on Michael Noonan The projections for revenue from the Local Property Tax (LPT) are based on a blended average of three approaches:

An approach based on the data used in the Thornhill report updated to include regional variation in property prices;

A similar approach based on data from the property price register; and

An approach based on the ESRI tax-benefit model ‘SWITCH’.

The property price register published by the Property Services Regulatory Authority (PRSA) was not available at the time of the Thornhill Group report. The estimation approach in the Thornhill report was used to illustrate indicative yields only, using unpublished Central Statistics Office (CSO) data based on mortgage transactions and the CSO’s property price index. In making the Budget forecast this was updated to include regional variation in house prices and stock using data for county level housing stock, and regional variation in values from the CSO property price index. This results in a higher yield because of the higher weighting of higher value properties in counties with larger volumes of properties.

In Autumn 2012, a national register of property values was published for the first time based on Stamp Duty data from the Revenue Commissioners on actual transactions in the years 2010-2012. The register is updated on an on-going basis. The distribution from the register results in a higher incidence of higher value properties. Using the same indicative rates an analysis based entirely on the register would result in a much higher yield compared with the method above. However, caution has been applied to this approach given the low number of transactions, the high percentage of non-mortgage (i.e. cash transactions) and the possible bias in recent transactions towards transactions of higher quality housing stock which may not represent the generality of housing valuations in the State.

A final method of estimation is based on the ESRI tax-benefit model SWITCH. In the SWITCH model, data on house prices come from the self-assessed value provided by the respondents to the Survey on Income and Living Conditions (SILC) in 2010 with these values indexed to adjust to 2012 prices. The SILC data are based on a sample of all private households, giving it the potential to provide a broader picture than one based on transactions or mortgages. The SWITCH model produces an estimate lower than the first method.

The overall projections for revenue are a blended average of the approaches described above.

As indicated in reply to Parliamentary Question No. 55934/12, answered on 11 December 2012, the Property Price Register shows a higher percentage of houses valued over €1m (c. 1% of the housing stock) than does the Thornhill Report. However, the overall yield estimate does not solely rely on this data source for the reasons given above, in particular because properties which changed hands in the last two years are not necessarily representative of the overall stock of residential properties in the State.

Departmental Staff Remuneration

 64. 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 temporary promotions or acting-up allowances have not been a feature of the staffing arrangements for this EU Presidency, if he will confirm that his Department has been given sanction to make such arrangements detailing the number by grade involved, and the date sanction was sought and the date it was given. [56299/12]

Minister for Finance (Deputy Michael Noonan): Information on Michael Noonan Zoom on Michael Noonan My Department has not awarded temporary promotions or acting-up allowances to any staff member for Presidency related work.

Student Grant Scheme Applications

 65. Deputy Sean Fleming Information on Seán Fleming Zoom on Seán Fleming asked the Minister for Education and Skills Information on Ruairí Quinn Zoom on Ruairí Quinn if a Student Universal Support Ireland grant will be allocated in respect of a person (details supplied) in County Laois; and if he will make a statement on the matter. [55715/12]

Minister for Education and Skills (Deputy Ruairí Quinn): Information on Ruairí Quinn Zoom on Ruairí Quinn Officials in my Department have confirmed with Student Universal Support Ireland (SUSI) that further documentation was received from the student referred to by the Deputy on 1st December 2012 and this documentation is currently awaiting review. The student will be notified directly of the outcome.

Home Tuition Scheme Provision

 66. Deputy Eric Byrne Information on Eric J. Byrne Zoom on Eric J. Byrne asked the Minister for Education and Skills Information on Ruairí Quinn Zoom on Ruairí Quinn the position regarding home tuition in respect of a person (details supplied) in Dublin 5; if same will be extended; and if he will make a statement on the matter. [55728/12]

Minister for Education and Skills (Deputy Ruairí Quinn): Information on Ruairí Quinn Zoom on Ruairí Quinn The Deputy will be aware that the purpose of the Home Tuition Scheme is to provide a compensatory educational service for children who, for a number of reasons such as chronic illness, are unable to attend school. The scheme was extended in recent years to facilitate tuition for children awaiting a suitable educational placement and also to provide early educational intervention for pre-school children with autism. Home Tuition is provided as an interim provision only and should not be regarded as an optional alternative to a place in school.

As home tuition takes place outside the school environment it is a general condition of the scheme that the tuition provider where possible should be a qualified teacher who is registered with the Teaching Council. Where this is not possible, as in the case in question, approval may be given for a tutor with alternative qualifications to undertake the tuition. In such circumstances approval for nominated non qualified tutors is made on a temporary basis. In the case referred to by the Deputy the child is awaiting placement and the tuition has been approved until the end of the school year. However the tuition provider is not a qualified teacher and therefore her approval is temporary pending a qualified teacher being sourced. In the event that it remains problematic to source a qualified teacher my Department in consultation with the family in question will consider an extension of the current tutor arrangements.

Student Grant Scheme Delays

 67. Deputy Dara Calleary Information on Dara Calleary Zoom on Dara Calleary asked the Minister for Education and Skills Information on Ruairí Quinn Zoom on Ruairí Quinn when students (details supplied) in County Mayo may expect to have their higher education grant applications processed; the reason for the delay in making a decision in respect of their applications; if he will now expedite these applications; and if he will make a statement on the matter.  [55733/12]

Minister for Education and Skills (Deputy Ruairí Quinn): Information on Ruairí Quinn Zoom on Ruairí Quinn In relation to the first named candidate officials in my Department have confirmed with SUSI that further supporting documentation was requested on 11th December 2012. When the documentation is returned to SUSI the student will be notified directly of the outcome. In relation to the second named candidate officials in my Department have confirmed with SUSI that the application is currently under review and SUSI will notify the student directly of the outcome.

In relation to the third named candidate officials in my Department have confirmed with SUSI, that the student has been requested to submit his Final Course Acceptance Form. When the document is returned to SUSI the student will be notified directly of the outcome. In relation to the fourth named candidate officials in my Department have confirmed with SUSI, that further supporting documentation was requested on 20th November 2012. When the documentation is returned to SUSI the student will be notified directly of the outcome.

In relation to the fifth named candidate officials in my Department have confirmed with SUSI that further supporting documentation was requested on 3rd December 2012. When the documentation is returned to SUSI the student will be notified directly of the outcome. In relation to the sixth named candidate officials in my Department have confirmed with SUSI that the application of the student referred to by the Deputy has already been awarded a grant and an award letter issued on 10th December 2012.

In relation to the seventh named candidate officials in my Department have confirmed with SUSI that the application of the student referred to by the Deputy has already been awarded a grant and an award letter issued on 6th December 2012. In relation to the eighth named candidate officials in my Department have confirmed with SUSI that the application of the student referred to by the Deputy that a decision has now been made and a letter will issue shortly directly to the student outlining the position. In relation to the ninth named candidate officials in my Department have confirmed with SUSI that no application from the student referred to by the Deputy has been received to date.


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