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Written Answers Nos. 127-146Question No. 127 answered with Question No. 112. Foreign Policy 128. Deputy Clare Daly Tánaiste and Minister for Foreign Affairs and Trade (Deputy Simon Coveney): On 25 February 2019 the Court delivered its Advisory Opinion. The Court found that the separation of the Chagos Archipelago from Mauritius was contrary to the right to self-determination and that accordingly the decolonisation of Mauritius was not completed in conformity with international law. Advisory opinions are addressed to the UN organs or agencies requesting them; in this case the UN General Assembly. It is now a matter for the UN General Assembly to consider the consequences of the Advisory Opinion and to determine how it wishes to proceed on this matter. Ireland paid close attention to the discussions leading up to the adoption of the General Assembly Resolution put forward by Mauritius. As a member of the General Assembly we will continue to pay close attention to this matter in the period ahead. Middle East Issues 129. Deputy Niall Collins 130. Deputy Niall Collins 131. Deputy Niall Collins Tánaiste and Minister for Foreign Affairs and Trade (Deputy Simon Coveney): The human rights situation in Israel and the Occupied Palestinian Territory is a matter of deep concern. The manner and practices around the detention and trial of Palestinian children in Israeli prisons and the Israeli military court system continue to be unacceptable. It is my view that Palestinians who are detained, especially children, should have the same protections and conditions that Israel affords its own citizens who are subject to detention. Ireland has recommended that Israel urgently end the admissibility of evidence in military courts of written confessions in Hebrew signed by Palestinian children, the use of solitary confinement and the denial of access to family members or to legal representation. As a contracting party, Israel is bound by the UN Convention on the Rights of the Child (CRC) and the International Covenant on Civil and Political Rights (ICCPR). I am not satisfied that Israel is meeting its obligations under Articles 37 and 40 of the CRC and Articles 9 and 14 of the ICCPR. For example, Article 37 of the UN Convention on the Rights of the Child states that “The arrest, detention or imprisonment of a child shall be in conformity with the law and shall be used only as a measure of last resort and for the shortest appropriate period of time.” During my visits to Israel and Palestine, I have personally raised Ireland’s concerns about the detention of minors directly with the Israeli authorities, including on the practices of night-time arrests and blindfolding. I have strongly urged the Israeli authorities to use detention only as a last resort, and for the shortest possible period of time, in the case of minors, as stipulated in the UN Convention. More generally, I am seriously concerned by the Israeli military court system which is used in relation to Palestinians in the Occupied Palestinian Territory, including children. Palestinians do not enjoy the same legal protections as Israeli settlers in the same area. These military courts have a near-one hundred percent conviction rate, a statistic which raises serious questions about the system’s compliance with international standards of due process. Ireland has repeatedly drawn attention to concerns regarding the treatment of Palestinian prisoners, and in particular, over recent years to issues related to the detention of minors. In the most recent UN Human Rights Council Universal Periodic Review of Israel in 2018, Ireland drew attention to concerns in this regard. Ireland also raised the issue of administrative detention and recommended that Israel ensure full respect for international human rights obligations, in particular those specified in article 9 of the ICCPR, towards all prisoners. Ireland has also raised these issues at EU level. In February 2019, the Foreign Affairs Council adopted Conclusions on EU Priorities in UN human rights fora, which reaffirmed the EU’s commitment to the full implementation of the Convention on the Rights of the Child and its Protocols worldwide. Ireland also provides financial support to Israeli and Palestinian NGOs who are active in bringing the issues related to the detention of minors to light, and combatting abuses. My Department and I will continue to press on these issues in the relevant multilateral fora, and also, where appropriate, directly with Israel, both with the Israeli Embassy here and through our own Embassy in Tel Aviv. Catchment Flood Risk Assessment and Management Programme 132. Deputy Aindrias Moynihan Minister for Finance (Deputy Paschal Donohoe): However, you should be aware that the provision of insurance is a commercial matter for insurance companies, which has to be based on a proper assessment of the risks they are willing to accept. This assessment will in many cases include insurers own presumptions based on their private modelling and research. Consequently, neither the Government nor the Central Bank can interfere in the provision or pricing of insurance products or have the power to direct insurance companies to provide flood cover to specific individuals or businesses. This position is reinforced by the EU framework for insurance which expressly prohibits Member States from doing so. The above mentioned limitations means that addressing the cost and availability of flood insurance must be addressed from a different angle. In this regard the core strategy for addressing areas at potentially significant risk from flooding is the OPW Catchment Flood Risk Assessment and Management ("CFRAM") Programme. The CFRAM Programme focussed on 300 Areas for Further Assessment ("AFAs") including 90 coastal areas, mainly in urban locations nationwide, identified as being at potentially significant risk of flooding. The proposed feasible measures, both structural and non-structural, identified for AFAs are outlined in Flood Risk Management Plans. The Plans set out the flood relief schemes that have already been constructed and those that are currently underway. The Plans also provide the outline of 118 proposed schemes that can protect a further 11,500 properties and the evidence to prioritise their delivery to where its benefit is greatest. OPW have informed my Department that they and Local Authorities will work closely together on all of the projects to ensure that they are implemented in the lifetime of the Programme. The OPW has also advised that they are working with Local Authorities to ensure these schemes are progressed within agreed timeframes. Therefore, Government policy in relation to flooding is focused on the development of a sustainable, planned and risk-based approach to dealing with flooding problems. This in turn should lead to the increased availability of flood insurance. A key part of the overall strategy is ongoing communication between the OPW and the insurance industry, in order to reach a better understanding about the provision of flood cover in marginal areas. This is facilitated by a Memorandum of Understanding between the OPW and Insurance Ireland, which provides for the exchange of data in relation to completed flood defence schemes which should provide a basis for the increased provision of flood insurance in areas where works have been completed. In this regard, the Insurance Ireland/OPW working group, which the Department of Finance attends, now meets on a quarterly basis to support the information flow and improve the understanding of issues between both parties. Finally, you should be aware that a consumer can make a complaint to the Financial Services Ombudsman in relation to any dealings with a Financial Services or Insurance provider during which they feel they have been unfairly treated. In addition, individuals who are experiencing difficulty in obtaining flood insurance or believe that they are being treated unfairly may contact Insurance Ireland which operates a free Insurance Information Service for those who have queries, complaints or difficulties in relation to insurance. Insurance Costs 133. Deputy Eamon Scanlon Minister for Finance (Deputy Paschal Donohoe): The eighth such Progress Update has just been published and concentrated in particular on outlining the definitive position in relation to all of the 33 recommendations from the Motor Report, as the last of the deadlines within its Action Plan passed at the end of 2018. 29 of these recommendations have either been completed, are categorised as “ongoing” and in respect of which work is continuing, or have been concluded in so far as the direct involvement of the CIWG is concerned. In respect of the EL/PL Report, 24 out of the total of 26 action points which were due for completion during 2018 overall have been accomplished. Taking the two specific issues highlighted by the Deputy in turn, I can confirm that the Central Bank (National Claims Information Database) Bill 2018 completed all stages in the Oireachtas on 20 December 2018 and the Act was commenced on 28 January 2019. The Central Bank of Ireland (CBI) is now making appropriate regulations in respect of this database, as provided for in the Act. The CBI will collaborate with insurance undertakings to ensure efficient data collection, and expects to publish its first report in respect of the National Claims Information Database during the second half of 2019. Once fully operational, the database will enable the CBI to publish a range of claims-related information on an annual basis to increase transparency. Regarding the other matter raised by the Deputy, the latest Progress Update confirms that the Garda Commissioner has undertaken to further consider the establishment of an insurance fraud investigation unit within the Garda National Economic Crime Bureau (GNECB). In response to the original proposal to explore the possibility that a specific unit be set up within An Garda Síochána using funding from the insurance industry, the Commissioner indicated his preference that, in principle, An Garda Síochána should not be funded by any source other than the exchequer for the purposes of tackling insurance fraud. The Deputy will, of course, appreciate that it is the Garda Commissioner who is responsible for the allocation of resources within An Garda Síochána and neither I nor the Minister for Justice and Equality has a role in such operational matters. It should be reiterated that an industry-funded Garda unit was a single mechanism proposed as a potential means by which to implement the intent behind the relevant recommendation, the wording of which calls for An Garda Síochána to explore the potential for further cooperation between it and the insurance sector in relation to insurance fraud investigation. In this regard, much constructive engagement has taken place through the Fraud Roundtable, which was formed by the CIWG primarily to implement Recommendation 13 of the EL/PL Report, work which culminated in the publication by An Garda Síochána of the Guidelines for the Reporting of Suspected Fraudulent Insurance Claims by Insurance Entities to An Garda Síochána in October 2018. A particularly positive ‘spin-off’ development from the Roundtable has been that the GNECB and Insurance Ireland’s Anti-Fraud Forum – which is drawn from the fraud sections of the major individual insurers – have committed to meet on a regular basis in order to discuss and act upon current and ongoing general issues which arise in the area of insurance fraud. Finally, the Deputy should be assured that Minister of State D’Arcy and the Working Group will continue to push for the completion of all outstanding recommendations and action points, as well as seeking to put into place the relevant measures proposed by the Personal Injuries Commission. Climate Change Adaptation Plans 134. Deputy Eoin Ó Broin Minister for Finance (Deputy Paschal Donohoe): Within weeks of the Fossil Fuel Divestment Act being signed into law, the ISIF advised me that it had divested from all required companies within the meaning of the Act – a total €72 million of equity and debt exposures - and the ISIF has developed a wider “Fossil Fuel List” of 148 companies in which it will not invest. Mortgage Lending 135. Deputy Michael McGrath Minister for Finance (Deputy Paschal Donohoe): Investor Compensation Company Limited 136. Deputy Michael McGrath Minister for Finance (Deputy Paschal Donohoe): Brexit Issues 137. Deputy Billy Kelleher Minister for Finance (Deputy Paschal Donohoe):
Since November 2018, Revenue has written directly to approximately 84,000 businesses, who from Revenue’s records have recently had at least some level of trade with the UK, encouraging them do a Brexit impact assessment for their business, and bringing their attention to the availability of free and dedicated customs information seminars. The breakdown of the number of letters written by Revenue to businesses without an EORI number by county is set out in the following table.
Tax Credits 138. Deputy Eamon Scanlon Minister for Finance (Deputy Paschal Donohoe): The reduction in the person’s tax credits for 2019 was correctly applied to take account of the tax liabilities on a full year payment of the State Contributory Pension by the Department of Employment Affairs and Social Protection (DEASP) to their spouse. The person’s spouse only received the State Contributory Pension from May 2018, which resulted in a smaller reduction in their tax credits for that year. In situations where a couple has both an employment income and a State Pension from DEASP, the tax due on the pension is collected by reducing the tax credits on the employment income. Flood Risk Insurance Cover Provision 139. Deputy Aindrias Moynihan Minister for Finance (Deputy Paschal Donohoe): However, you should be aware that the provision of insurance is a commercial matter for insurance companies, which has to be based on a proper assessment of the risks they are willing to accept. Consequently, neither the Government nor the Central Bank can interfere in the provision or pricing of insurance products or have the power to direct insurance companies to provide flood cover to specific individuals or businesses. Government policy in relation to flooding is focused on the development of a sustainable, planned and risk-based approach to dealing with flooding problems. This in turn should lead to the increased availability of flood insurance. To achieve this aim, there is a focus on: - prioritising spending on flood relief measures by the Office of Public Works (OPW) and relevant local authorities; - development and implementation of plans by the OPW to implement flood relief schemes; and, - improving channels of communication between the OPW and the insurance industry, in order to reach a better understanding about the provision of flood cover in marginal areas. The above approach is complemented by a Memorandum of Understanding between the OPW and Insurance Ireland, which provides for the exchange of data in relation to completed flood defence schemes which should provide a basis for the increased provision of flood insurance in areas where works have been completed. In this regard, the Insurance Ireland/OPW working group, which the Department of Finance attends, now meets on a quarterly basis to support the information flow and improve the understanding of issues between both parties. Finally, you should be aware that a consumer can make a complaint to the Financial Services Ombudsman in relation to any dealings with a Financial Services or Insurance provider during which they feel they have been unfairly treated. In addition, individuals who are experiencing difficulty in obtaining flood insurance or believe that they are being treated unfairly may contact Insurance Ireland which operates a free Insurance Information Service for those who have queries, complaints or difficulties in relation to insurance. Departmental Reports 140. Deputy Clare Daly Minister for Finance (Deputy Paschal Donohoe): State Pension (Contributory) Eligibility 141. Deputy Jackie Cahill Minister for Finance (Deputy Paschal Donohoe): However, in relation to the tax treatment of the State Contributory Pension and the taxation of self-employed persons in the context of the question asked by the Deputy, I am advised by Revenue that the position is as follows. The State Contributory Pension is chargeable to income tax under Schedule E by virtue of section 19 of the Taxes Consolidation Act 1997. The Department of Employment Affairs and Social Protection advise Revenue of individuals who are in receipt of the State Contributory Pension and the amount of the pension paid. Where Revenue has this information, it will automatically show on the individual’s pre-populated income tax return. Generally, individuals who are self-employed, and under the age of 66, pay Class S PRSI. Self-employed individuals are required to file an annual income tax return. The annual income tax return must be filed no later than 31 October following the end of the tax year in the case of those taxpayers who file a paper return and not later than mid-November following the end of the tax year in the case of those taxpayers who file their return using Revenue’s Online Service (ROS). Details of any taxable payments received from the Department of Employment Affairs and Social Protection should be either included or confirmed on the annual income tax return. Any tax due in respect of such payments is payable at the same time as the annual tax return is required to be made. Brexit Issues 142. Deputy Joan Collins Minister for Finance (Deputy Paschal Donohoe): In that context I would like to clarify that the Department of Employment Affairs and Social Protection (DEASP) is responsible for occupational pensions policy. Additionally, the Pensions Authority (PA), which is a body under the aegis of DEASP is responsible for regulating Institutions for Occupational Retirement Provision (IORPs) under the IORP Directive, which governs the operation of cross-border IORPs. The PA also supervises Personal Retirement Savings Account (PRSA) providers in relation to their approved PRSA products. Firstly, regarding Irish persons paying into approved private pension schemes in the UK, tax relief is available on contributions into and on the growth of the investment under our Exempt, Exempt, Taxed (EET) system which is set out in the Taxes Consolidation Act 1997. Provisions to maintain this in the event of a hard Brexit are included in the Withdrawal of the United Kingdom from the European Union (Consequential Provisions) Bill 2019, the so called Brexit Omnibus Bill, which is currently going through the Houses. The question of whether or not a UK Company Scheme Pension will be paid into an Irish bank account post-Brexit is a matter for the relevant scheme provider. If the pension provider is an insurance company that has not yet established in an EU/EEA as part of their contingency preparations this contract would be covered under the legislative amendments to the EU Insurance and reinsurance regulations, contained in Part 8 of the draft legislation. It may be beneficial for any concerned party to contact their personal pension provider in the first instance to clarify what contingency plans have been put in place. In relation to the making of or receiving financial payments. SEPA is the Single Euro Payments Area which enables payment transfers in euro between accounts in SEPA countries. The UK Government has committed to keeping its payment rules in line with SEPA in order to continue its access post Brexit. As stated on its website: 'There is nothing in UK private occupational pensions legislation that prevents occupational pension schemes from making pension payments overseas, We do not expect that this will change as a result of Brexit.' In the event that the UK is excluded from SEPA some additional costs may arise for transfers in euro moving between accounts in the UK and accounts in the EU, and they may take longer than they currently do. Customers should contact their finance provider where they have specific queries. Finally, the impact of Brexit, and in particular a hard Brexit, on markets and the euro/sterling exchange rate is difficult to estimate with any certainty but may have an impact on the beneficiaries of occupational pension schemes. Insurance Industry Regulation 143. Deputy Pearse Doherty Minister for Finance (Deputy Paschal Donohoe): As the Deputy is aware, as Minister for Finance, I am responsible for the development of the legal framework governing financial regulation. In this regard you should note that the Solvency II Directive (2009/138/EC), which was transposed into Irish law via the European Union (Insurance and Reinsurance) Regulations 2015 (S.I. No. 485 of 2015) and came into force from 1 January 2016 is the framework for the regulation of insurance undertakings in Europe. Solvency II sets out new, more comprehensive EU-wide requirements on capital adequacy and risk management for insurers. It was designed to modernise supervision, deepen market integration and increase the competitiveness of European insurers. As I have no role in the day to day supervision of insurance companies, I consulted the Central Bank on the Deputy’s query. In response the Bank has advised that any insurance or reinsurance undertaking, including a mutual insurance company, wishing to establish its head office in Ireland and wishing to carry out the business of insurance or reinsurance must first obtain an authorisation from the Central Bank of Ireland in accordance with the European Union (Insurance and Reinsurance) Regulation 2015 – S.I. No. 485 of 2015. In summary therefore in principle the same legal framework applies to a mutual insurer as applies to a non-mutual insurer. Home Renovation Incentive Scheme 144. Deputy Michael Healy-Rae Minister for Finance (Deputy Paschal Donohoe): Under my Department's Tax Expenditure Guidelines, the introduction of new tax incentive measures should only be considered in circumstances where there is a demonstrable market failure and where a tax based incentive is more efficient than a direct expenditure intervention. The HRI was introduced in 2014 at a time when there was considerable loss of employment within the construction sector, with the aim of addressing this market failure by stimulating increased activity in the sector. In the current context of a growing economy and construction sector, the initial objectives of the scheme have been fulfilled, and this support is no longer needed in the terms in which it was originally envisaged. Furthermore, in light of the current housing supply shortage, and the need to deliver 25,000 additional housing units per annum over the period 2017-2021, there is a risk that the HRI could lead to increased competition for scarce resources within the construction sector, leading to upward pressure on construction costs and house prices. The potential for displacement of labour from work on new builds to work on home renovations would create a high opportunity cost of labour associated with HRI which was not present at the inception of the scheme. Revenue advise me that, as of 2 January 2019, the cost to the Exchequer of the HRI was c. €105 million, with a further €65 million worth of credits yet to be claimed in respect of the incentive. As the Deputy will appreciate, I must be mindful of the public finances and the many demands on the Exchequer. Tax reliefs, no matter how worthwhile in themselves, lead to a narrowing of the tax base. Finally, the Deputy makes reference in the details appended to the question to homeowners claiming back VAT under the HRI. I should clarify that the incentive operated as a relief from Income Tax (albeit at a rate of 13.5%) and not VAT, for qualifying individuals who carried out repairs, renovations and improvements to a home or rental property. Tax Data 145. Deputy Frank O'Rourke Minister for Finance (Deputy Paschal Donohoe): VAT Rate Increases 146. Deputy Brendan Griffin Minister for Finance (Deputy Paschal Donohoe): The operation of this concession became extremely problematic as a result of efforts by certain businesses in the industry to extend the concession beyond the scope permitted. Consistent challenges to Revenue guidance and decisions on the VAT rating of products gave rise to serious concerns about compliance within the industry and unfair competition between compliant and non-compliant businesses. For these reasons, Revenue announced last December the decision to remove this concession with effect from 1 March 2019, which would have had the effect that all food supplements would be charged at the standard VAT rate. Revenue has since deferred this date to 1 November 2019 in order to allow time for my Department to examine the policy and legislative options for the taxation of food supplements ahead of Budget 2020. This, in effect, means that the current VAT treatment of food supplements will remain in place. The zero rate of VAT applies to basic food supplements, such as vitamins, minerals and fish oils. All other supplements, such as those designed for cosmetic or body building purposes, apply at the standard VAT rate. Independent of Revenue’s decisions on interpretation, I agreed during the recent Finance Bill to put in place a process that will conclude in the 2019 Tax Strategy Group Paper to examine some of the policy choices around the VAT treatment of food supplements. With this in mind, and cognisant of the opinions expressed by all parties on the VAT treatment of food supplements, I propose to issue a public consultation seeking engagement from all parties on the issue. I will also consult with my colleague the Minister for Health on the use of food supplements. This consultation will feed into the review undertaken by the Department in the tax strategy group process. Details on the proposed public consultation will be announced in the near future. |
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