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 Header Item Written Answers Nos. 172-193
 Header Item NAMA Expenditure
 Header Item NAMA Staff Pensions
 Header Item Banking Sector Remuneration
 Header Item Banking Sector Remuneration
 Header Item NAMA Portfolio Value
 Header Item Banks Recapitalisation
 Header Item NAMA Operations
 Header Item Banks Recapitalisation
 Header Item Banks Recapitalisation
 Header Item Property Taxation Collection
 Header Item Tax Code
 Header Item Property Taxation Collection
 Header Item Universal Social Charge Payments
 Header Item Tax Code
 Header Item NAMA Property Sales
 Header Item Revenue Commissioners Investigations
 Header Item Universal Social Charge Payments
 Header Item Mortgage Arrears Proposals

Tuesday, 18 December 2012

Dáil Éireann Debate
Vol. 787 No. 3

First Page Previous Page Page of 96 Next Page Last Page

Written Answers Nos. 172-193

  Questions Nos. 172 and 173 answered with Question No. 128.

NAMA Expenditure

 174. Deputy Pearse Doherty Information on Pearse Doherty Zoom on Pearse Doherty asked the Minister for Finance Information on Michael Noonan Zoom on Michael Noonan further to Parliamentary Question No. 139 of 11 December 2012, if he will confirm the fees paid by the National Assets Management Agency or its debtor for the provision of an independent valuation or independent valuations in the case of the sale of the property (details supplied). [56851/12]

Minister for Finance (Deputy Michael Noonan): Information on Michael Noonan Zoom on Michael Noonan As advised in my response to your Parliamentary Question of 11th December 2012 (55389/12), I do not intend to go beyond the extensive information that NAMA, based on legal advice, has already made publicly available in respect of this transaction.

NAMA Staff Pensions

 175. Deputy Pearse Doherty Information on Pearse Doherty Zoom on Pearse Doherty asked the Minister for Finance Information on Michael Noonan Zoom on Michael Noonan further to the announcement by the Irish Bank Resolution Corporation in which he is the sole shareholder of 100% of the shares, that IBRC has engaged a person (details supplied) as chief risk officer and newspaper reports that he has approved a salary for them of more than €500,000 per annum, if he will identify the person or persons at the National Asset Management Agency who undertake a role equivalent to chief risk officer; and if he will confirm the salary or salary range payable by NAMA for those undertaking that function. [56863/12]

Minister for Finance (Deputy Michael Noonan): Information on Michael Noonan Zoom on Michael Noonan I am advised by NAMA that its Annual Report for 2011, which is available on the NAMA website, www.nama.ie, provides details on its organisational structure, staffing resources and operating costs. Details of remuneration bands have been set out in response to Parliamentary Question 47865/12. The NTMA, which assigns staff to NAMA, does not disclose details of the remuneration of individual members of staff.

Banking Sector Remuneration

 176. 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 confirm the reason the Governor of the Central Bank of Ireland (details supplied) is earning in 2012 approximately 40% less than his deputy. [56864/12]

Minister for Finance (Deputy Michael Noonan): Information on Michael Noonan Zoom on Michael Noonan Under the Central Bank Act 1942 and the Statute of the European System of Central Banks (ESCB), the Government has no role in the setting of terms and conditions of employment in the Central Bank. The Act and the Statute guarantee the independence of the Governor in carrying out his ESCB related functions and control over pay and conditions is seen as a necessary part of that independence. The employment of staff at the Central Bank and their terms and conditions are matters for the Central Bank Commission, therefore, I am not privy to the contractual arrangements that apply.

The Central Bank publishes information related to remuneration of executive and non executive directors in its annual report. In 2011, the Governor earned a salary of €276,324. The Deputy Governor (Financial Regulation) earned €340,000, having agreed a cut of 15% on his original salary of €400,000. The Deputy Governor (Central Banking) was appointed on 1st September 2011 with an annual salary of €250,000. In 2011 the Governor of the Central Bank waived €41,740 of his total remuneration, which resulted in a net remuneration of €234,584 for that year and has indicated that he will waive €63,324 of his total remuneration in 2012.

Banking Sector Remuneration

 177. 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 provide an explanation as to the reason there are at least six staff at the Irish Bank Resolution Corporation earning more than €400,000 per annum whilst no staff at the National Asset Management Agency earn salaries in 2012 of more than €400,000 per annum. [56865/12]

Minister for Finance (Deputy Michael Noonan): Information on Michael Noonan Zoom on Michael Noonan Following the appointment of the current CEO of IBRC in September 2009, the entire executive of the Bank was replaced with an appropriately skilled senior management team, to lead the newly formed IBRC (the combined former Anglo Irish Bank and former INBS) through the process of wind down. I have been informed that external search consultants were utilised in open and transparent recruitment processes, to identify and hire senior management with the requisite skills to deal with the challenges of working out the Bank’s distressed loan books. I have been advised that remuneration in IBRC complies with the recommendations put forward by CIROC with regards to the remuneration applicable to the positions of the CEO and senior management of the Bank.

NAMA Portfolio Value

 178. 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 provide the financial quantum of loans net of provisions being managed by the National Asset Management Agency at 30 June 2012 and being managed by the Irish Bank Resolution Corporation at the same date. [56866/12]

Minister for Finance (Deputy Michael Noonan): Information on Michael Noonan Zoom on Michael Noonan I am advised by NAMA that the financial quantum of loans net of provisions managed by it is disclosed in the Section 55 accounts to 30th June, which are published on the NAMA website, www.nama.ie. IBRC’s 2012 Interim Report, which covers the period from January to June 2012, discloses the information sought. The IBRC Interim Accounts can be found at: http://www.ibrc.ie/About_us/Financial_information/Latest_interim_report/.

Banks Recapitalisation

 179. 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 provide the latest estimate of the dates by which the National Asset Management Agency and the Irish Bank Resolution Corporation will be wound up. [56867/12]

Minister for Finance (Deputy Michael Noonan): Information on Michael Noonan Zoom on Michael Noonan IBRC is working in accordance with a plan which has been approved by the EU for the work out of the organisation by 2020. It is important in this context to be clear the interim accounts produced by the bank refer to “winding up of the loan book in an orderly manner by 2020” as opposed to a winding up of the bank. This difference is important for technical reasons and also to provide options as to how the overall cost of the bank can be settled in an appropriate timeframe. I can confirm that, under current arrangements, the scheduled payments on the Promissory Notes are due to continue until 2031. I note that the NAMA Board has indicated that it expects to have completed its work by 2020.

NAMA Operations

 180. 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 provide the profit or loss of the National Asset Management Agency for the six months ending 30 June 2012 and the profit or loss of the Irish Bank Resolution Corporation for the same period. [56868/12]

Minister for Finance (Deputy Michael Noonan): Information on Michael Noonan Zoom on Michael Noonan I am advised by NAMA that profit after tax was disclosed in the Section 55 accounts to 30th June 2012, which are published on the NAMA website, www.nama.ie. IBRC’s 2012 Interim Report, which covers the period from January to June 2012, discloses the information sought. The IBRC Interim Accounts can be found at: http://www.ibrc.ie/About_us/Financial_information/Latest_interim_report/.

Banks Recapitalisation

 181. 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 outline the metrics by which he assesses the ongoing performance of the National Asset Management Agency and the Irish Bank Resolution Corporation. [56869/12]

Minister for Finance (Deputy Michael Noonan): Information on Michael Noonan Zoom on Michael Noonan The Shareholding Management Unit of my Department monitors the performance of IBRC on a regular basis. The Unit fulfils this duty through a number of instruments including a Monthly Operating Plan Report, agreed between my Department and IBRC, which provides a detailed analysis of the financial performance of IBRC including its capital position, balance sheet deleveraging, asset quality and operating costs against both the agreed EC restructuring plan and also against management team’s own forecasts. In addition the Unit meets Senior Management in the bank on a monthly basis to challenge business performance and receive timely updates on deleveraging progress.

NAMA is assessed by reference to the objectives set for it by the Oireachtas as set out in Section 20 of the NAMA Act 2009. NAMA was, as the Deputy is aware, established to (1) remove systemic risk to the Irish banking system through the acquisition of land and development and associated loans from participating institutions and (2) to obtain the best achievable return to the State from these acquired loans. NAMA has completed the first of these major undertakings through the valuation, purchase and transfer of relevant loans from the participating institutions. In the process, NAMA has injected over €30 billion in liquidity into the Irish banking system. Alongside this, the establishment and development of the Agency itself to carry out the tasks mandated to it by the NAMA Act 2009 has been another important achievement.

NAMA is now fully engaged in its core role of managing and selling the assets under its control with a view to obtaining the best financial return for the state. The progress that is being made is exemplified by the fact that, since inception, NAMA has generated total cash flows of over €10 billion, circa €6.6 billion in asset sales, with a further €2 billion in the pipeline, and circa €3.5 billion in non-disposal income, mainly rental receipts from properties controlled by its debtors and receivers.

As a result of its current cash and liquid asset balance and strong cash-generation capacity, NAMA is firmly on course to meet its ultimate objective of redeeming over its projected ten-year life to 2020, at minimum, the Senior Bonds issued as consideration for the acquired bank assets in addition to recovery of its carrying costs and the working and development capital expenditure advanced in the course of its work. I am advised by NAMA that it has already redeemed €3.25 billion of its debt and is in no doubt as to its ability to meet its end-2013 target of redeeming €7.5 billion in Senior Bonds. The achievement of this target, which forms part of the Troika programme, is important in terms of Ireland’s return to the debt markets.

Whilst these are the primary measures against which NAMA’s work is viewed, I also note that it is playing a vital role in helping to encourage activity in the Irish commercial and residential property markets through initiatives including vendor finance, €2 billion of which is expected ultimately to be made available to prospective purchasers of commercial property controlled by its debtors and receivers, and its 80:20 Deferred Payment Initiative for prospective house buyers. NAMA has also announced plans to invest up to €2 billion over the next four years in its Irish assets, which has significant employment potential and will ensure that we are positioned to meet the future growth needs of the economy through, for instance, delivery of the accommodation needs of future Foreign Direct Investment.

Banks Recapitalisation

 182. Deputy Pearse Doherty Information on Pearse Doherty Zoom on Pearse Doherty asked the Minister for Finance Information on Michael Noonan Zoom on Michael Noonan further to Parliamentary Question No. 311 of 18 September 2012, when he said that the National Asset Management Agency does not compete with the Irish Bank Resolution Corporation for resources and customers, and following the statement by the chief executive officer of IBRC (details supplied) at the Oireachtas Finance, Public Expenditure and Reform Committee on 31 October 2012 when he said we are not the only organisation in the country which has this type of portfolio, as we go through the process of building teams, they are at risk, they get poached, and not only by other State owned organisations but also by foreign organisations which have difficult and distressed portfolios which they need to work out and his response to Parliamentary Question No. 256 of 6 November 2012 in which he confirmed that 14 staff had been recruited by NAMA from IBRC, if he will reconfirm his position that there is no competition between NAMA and IBRC for resources. [56870/12]

Minister for Finance (Deputy Michael Noonan): Information on Michael Noonan Zoom on Michael Noonan Many financial institutions will compete for suitably experienced staff in the Irish market, whether it is with the Irish covered banks, non-Irish banks or specialist financial services platforms. However I would not characterise the level of competition for resources between IBRC and NAMA as anything other than normal market competition.

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 if he will confirm if the Revenue Commissioner has preferential creditor status relating to debts accruing for non-payment of the property tax, that is if there is non-payment on a property and the property has a mortgage on it, when the property is sold, does the Revenue have access to claim the debt owed to it over the mortgage provider's claim to the amount the property for which is soldr. [56872/12]

 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 the consideration given when forecasting the revenue to be generated by the new property tax, to deferrals and charges for unpaid tax, reducing the loans recovered by banks who may have mortgages outstanding on specific properties, as a result of the Revenue Commissioners having priority in recovering unpaid property tax ahead of other charges on the property. [56903/12]

Minister for Finance (Deputy Michael Noonan): Information on Michael Noonan Zoom on Michael Noonan I propose to take Questions Nos. 183 and 186 together.

Under the Finance (Local Property Tax) Bill 2012, unpaid Local Property Tax together with any accrued interest will be a charge on the property to which it relates. The Bill does not confer any preferential creditor status on the Revenue Commissioners other than that which they would have in the normal course of events. The usual rule is that the priority of a Revenue charge vis-à-vis other parties who also have a charge on the property will depend on the timing of the various charges. Therefore, in the event of a sale of the property, the proceeds must be used to discharge charges in the order in which those charges arose. The Revenue Commissioners will only have preferential creditor status over a mortgage provider where its Local Property Tax liability was due and payable before the mortgage provider advanced a loan in respect of the property. On that basis deferrals and charges for the Local Property Tax should not have an effect on currently outstanding mortgages.

Tax Code

 184. Deputy Bernard J. Durkan Information on Bernard Durkan Zoom on Bernard Durkan asked the Minister for Finance Information on Michael Noonan Zoom on Michael Noonan if in the context of double taxation agreement or similar arrangement, a US/Irish citizen having dual citizenship is restricted to entitlement to one pension only either from the US or from this country, if the person opts for one or either he/she becomes debarred from a US pension; and if he will make a statement on the matter. [56877/12]

Minister for Finance (Deputy Michael Noonan): Information on Michael Noonan Zoom on Michael Noonan I wish to advise the deputy that, under the terms of the double taxation agreement (DTA) between Ireland and the United States, the rules provide that one or other of the countries has exclusive rights to tax pensions.   Broadly, private (i.e. non-government service) occupational pensions are taxable only in the country of residence of the pensioner. Government pensions are generally taxable only in the country that pays the pension— but if the recipient is a resident and national (citizen) of the other country such pensions are taxable only in the recipient’s country of residence. Social security benefits are taxable only in the country of residence of the pensioner. There is a separate set of rules to determine whether a person is resident in Ireland or the United States for the purposes of the double taxation agreement. Specifically, if, under the laws of the two jurisdictions, an individual is deemed to be a resident of both jurisdictions, a series of tiebreaker   rules are provided to determine a single country of residence for that individual.

  While the Ireland/US double taxation agreement is, accordingly, concerned with the allocation of taxing rights—setting out the way in which pensions paid from either jurisdiction may be taxed between Ireland and the United States and using tiebreaker rules to establish where an individual is resident—the DTA does not restrict an individual’s entitlement to a pension and has no role in that regard.

Property Taxation Collection

 185. 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 provide a projection of receipts for the new property tax in 2013; if the same degree of non-compliance as pertains in 2012 for the household charge applies in 2013 for the property tax. [56902/12]

Minister for Finance (Deputy Michael Noonan): Information on Michael Noonan Zoom on Michael Noonan The yield from the local property tax is estimated to be €250m in 2013 (half year charge) and €500 m in a full year. This projected yield takes into account deferrals by those for whom provision has been made. As I announced in the Budget, any arrears of Household Charge remaining unpaid at 1 July 2013 will be increased to €200 and added to Local Property Tax due on the property to be collected by Revenue. This is an important assurance for compliant tax payers that non-payment of the Household Charge will not be ignored and will be collected.

  Question No. 186 answered with Question No. 183.

Universal Social Charge Payments

 187. Deputy Aodhán Ó Ríordáin Information on Aodhán Ó Ríordáin Zoom on Aodhán Ó Ríordáin asked the Minister for Finance Information on Michael Noonan Zoom on Michael Noonan if he will provide, in tabular form, the estimated income that would be generated for the State by raising the universal social charge by 3% on all taxable income above €70,000 and for each €5,000 increment thereafter up to and including €120,000; and if he will make a statement on the matter. [56911/12]

Minister for Finance (Deputy Michael Noonan): Information on Michael Noonan Zoom on Michael Noonan I am advised by the Revenue Commissioners that the full year yield, estimated by reference to 2013 incomes, of a 3 percentage point increase in the rate of Universal Social Charge (USC) applying to the incomes of all income earners exceeding €70,000 but not exceeding €120,000 would be of the order of €41 million.    If the increased rate is also assumed to apply to income earners with incomes in excess of €120,000 the total full year yield would be of the order of €294 million.

  The Universal Social Charge is an individualised charge and as such, the estimated yields are based on individual incomes of more than €70,000. The estimated yields are based on confining the 3 percentage point increase to the portion of income which is in excess of €70,000, that is, the increase is not applied to the portion of total income earned up to €70,000. A breakdown of the yield of €41million for the rate change limited to earners with income of no more than €120,000 is as follows.

Range of taxable income for USC
Yield from 3% increase
€m
70,001-75,000
1.1
75,001-80,000
2.6
80,001-85,000
3.6
85,001-90,000
4.2
90,001-95,000
4.5
95,001-100,000
4.7
100,001-105,000
5.0
105,001-110,000
5.0
110,001-115,000
5.2
115,001-120,000
5.1
Total yield
41.0


  The figures are estimates 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.

Tax Code

 188. Deputy Aodhán Ó Ríordáin Information on Aodhán Ó Ríordáin Zoom on Aodhán Ó Ríordáin asked the Minister for Finance Information on Michael Noonan Zoom on Michael Noonan if he will provide the estimated income that would be generated by placing a 1% levy on each unit of alcohol sold here; and if he will make a statement on the matter. [56912/12]

Minister for Finance (Deputy Michael Noonan): Information on Michael Noonan Zoom on Michael Noonan I am informed by the Revenue Commissioners that the information requested regarding a 1% levy on each unit of alcohol is not available. EU Directive 92/83, which governs the structure of alcohol taxation, requires that such taxes are applied by reference to the nature and strength of the product. Therefore, it does not allow for the introduction of such a levy.

  Question No. 189 answered with Question No. 128.

NAMA Property Sales

 190. 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 he will ascertain from the National Assets Management Agency the status of moneys paid by NAMA to Carlow County Council in respect of local estates upkeep of those estates and lighting and so on. [56937/12]

Minister for Finance (Deputy Michael Noonan): Information on Michael Noonan Zoom on Michael Noonan As the Deputy is aware NAMA has acquired loans from five Irish financial institutions and is not the owner/operator of properties. The Agency’s role is that of a secured lender. Other than properties that have been enforced, all of which are listed on NAMA’s website and which are managed by the appointed receivers/administrators, properties continue to be managed by their existing owners albeit NAMA takes a very close interest in their efficient management and sale with a view to maximum loan repayment in order to protect the position of the taxpayer. I am advised by NAMA that, given that its role is that of a secured lender, the situation outlined by the Deputy does not arise and queries relating to any individual property should be directed to its owner or, in the case of enforcement, the duly appointed receiver/administrator.

Revenue Commissioners Investigations

 191. Deputy Eoghan Murphy Information on Eoghan Murphy Zoom on Eoghan Murphy asked the Minister for Finance Information on Michael Noonan Zoom on Michael Noonan further to Parliamentary Question No. 151 of 11 December 2012, if he will provide more detailed information on the work being undertaken by the Revenue Commissioners with a Government Department and a public sector agency regarding means testing for State benefits. [56938/12]

Minister for Finance (Deputy Michael Noonan): Information on Michael Noonan Zoom on Michael Noonan The Deputy will be aware that the level of a person’s annual income is one of the criteria that is taken into account in the means assessment process. I am advised by the Revenue Commissioners that they have been examining the feasibility of putting in place arrangements for verifying the annual income details of individuals electronically in the context of a means assessment. Such verification would be on foot of a request, which is supported by appropriate legislation, from a public sector organisation. As well as minimising the burden on the individual who is the subject of the means assessment, this process would also provide third party verification of the income provided by the individual who is being means assessed. I am further advised that discussions are well advanced with the Health Services Executive (HSE), for the purposes of medical card applications, and the Department of Education & Skills, for the purposes of third-level educational grant applications, whereby Revenue would provide, following a request from either organisation, an electronic confirmation of the amount of an individual’s annual income where that individual has applied for either a medical card or an educational grant.

In the case of the HSE, enabling legislation is required before any form of data exchange can take place and I understand that this is planned for 2013. In the case of the Department of Education & Skills, the required legislation is already in place and how the data exchange process would operate in practice is under active discussion.

I fully welcome this initiative that is being undertaken by Revenue, the HSE and the Department of Education & Skills. It is an excellent example of inter-agency collaboration that is a key part of the public service reform agenda. When it is up and running, it will offer significant savings to the citizen as it will reduce the amount of physical documentation that they have to provide to the means assessor and it should result in a quicker service, it will also minimise potential instances of fraud and error in applications for medical cards and third-level grants and will benefit the public sector organisations concerned by reducing unnecessary contacts with citizens.

Universal Social Charge Payments

 192. Deputy Olivia Mitchell Information on Olivia Mitchell Zoom on Olivia Mitchell asked the Minister for Finance Information on Michael Noonan Zoom on Michael Noonan if he will consider either this year or for next year's budget dealing with the anomaly caused by the €60,000 threshold attracting a 7% universal social charge whereby an income of €60,0011 produces a loss of €13,000 in income; and if he will make a statement on the matter. [56955/12]

Minister for Finance (Deputy Michael Noonan): Information on Michael Noonan Zoom on Michael Noonan The position is that, in order to ensure equity between all citizens based on their level of income, the reduced rate of Universal Social Charge (USC) will be discontinued from the 1 January 2013, and the standard rates of USC will apply to the following two groups: those aged 70 years and over with incomes of €60,000 and above; medical card holders with incomes of €60,000 and above.

  I have no plans to review this decision. I would also point out that the additional liability for USC in 2013 for an individual aged 70 years and over or a medical card holder with an income of €60,001 will be approximately €1,320 per annum. I have set out below the relevant USC liability as it applied in 2012 and as it will apply in 2013.

  USC Liability for a person aged 70 years and over with income of €60,001 or a medical card holder with income of €60,001   

USC Liability in 2012 USC Liability in 2013
€10,036 @ 2% = €200.72 €10,036 @ 2% = €200.72
€49,965 @ 4% = €1998.60 €5,980 @ 4% = €239.20
  €43,985 @ 7% = €3,078.95
Total USC €2,199.32 Total USC €3,518.87


Difference in USC Liability: €1,319.55

Mortgage Arrears Proposals

 193. 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 if he will intervene to try and help young couples who are struggling to pay their mortgages; his further views on whether mortgages should be reduced to reflect the now much lower valuation of the property as against the high price paid for the houses during the boom; and if he will make a statement on the matter. [56957/12]

Minister for Finance (Deputy Michael Noonan): Information on Michael Noonan Zoom on Michael Noonan I can assure the Deputy that the Government is aware of the significant difficulties some homeowners are facing in meeting their mortgage obligations and it is committed to advancing appropriate measures to assist those mortgage holders who are experiencing genuine difficulty. From an overall public policy perspective, a number of steps have been taken to protect all homeowners experiencing mortgage difficulty. The Central Bank’s Code of Conduct on Mortgage Arrears is a key protection and provides that each bank must put in place a formal Mortgage Arrears Resolution Process to deal with its mortgage customers who are in arrears or pre-arrears and for the establishment of dedicated arrears support units and appeals processes to handle such cases. The Code highlights the importance of a borrower contacting their lender when they are in arrears or pre-arrears. The Central Bank has published a guide for consumers on mortgage arrears called ‘Mortgage Arrears – A Consumer Guide to Dealing with your Lender’ and this is available on the Central Bank website: http://www.centralbank.ie/regulation/processes/consumer-protection-code/Documents/Consumer%20Booklet%20-%20FINAL%20Feb%202011.pdf   .

  In addition, the Government is now actively implementing the main recommendations contained in the ‘Keane Report’ and a number of significant milestones have now been achieved:

 - The Personal Insolvency Bill, which was published last June by the Minister for Justice, Equality and Defence, has now concluded in the Seanad and is returning to the Dáil this week;

 - The Minister for Housing and Planning has formally launched the “mortgage to rent” scheme on a nationwide basis;

 - Lenders have provided details to the Central Bank on their proposed forbearance and loan modification options which will be made available, in appropriate cases, to their customers who are in mortgage difficulty. The roll out of these options has commenced with Central Bank oversight;

 - An extensive independent mortgage advice framework has been put in place by the Minister of Social Protection comprising (i) an enhanced website www.keepingyourhome.ie   (ii) a Mortgage Arrears information helpline and (iii) the provision of free independent ‘one-to-one’ professional financial advice to borrowers when considering a long term forbearance/resolution offer from their lender.

  The Government, therefore, is proceeding along the lines of the general recommendations set out in the ‘Keane Report’ which indicated that the primary focus should be on those mortgage holders who are experiencing significant repayment difficulty or who are in an unsustainable situation. The Report did not consider a blanket debt write off approach, either to write down the amount of negative equity that may exist in residential mortgages or otherwise, to be an appropriate response to the mortgage problem. It was indicated that such an approach would be a very inefficient way to tackle the real problem and would impose significant further losses which could not be afforded by taxpayers or society at large. While unfortunately the latest Central Bank statistics indicate that the number of mortgages in arrears continues to rise, it must nevertheless also be noted that the significant majority of mortgage holders continue to meet their mortgage commitments.

  Ultimately the Government is of the view that it is the regeneration of the economy, the restoration of employment levels and income growth that will address the real social and economic problems associated with high levels of mortgage and personal indebtedness. That is why Government is focussed through its many new initiatives at fostering and generating economic growth. The successful achievement of this objective will restore consumer confidence and bring the tangible and sustainable recovery that the country requires.


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