Written Answers Nos. 341-361
341. Deputy Eoin Ó Broin asked the Minister for Finance if the comprehensive review of the disabled drivers and disabled passengers scheme, committed to by his predecessor and agreed to be undertaken with a wider review under the National Disability Inclusion Strategy, has commenced; if so, when the review will be complete; if not, when it is due to commence; and when findings of the review of the DDS scheme will be available. [27103/23]
View answerThe National Disability Inclusion Strategy Transport Working Group (TWG), comprising members from a range of Departments, agencies and Disabled Persons Organisations, was tasked under Action 104 to review all Government-funded transport and mobility supports for those with a disability, including the Disabled Drivers and Disabled Passengers Scheme (DDS). The NDIS TWG final report was published on 24th February 2023 and concludes that the DDS should replaced with a needs-based, grant-aided vehicular adaptation scheme, i.e. to provide direct financial assistance to individuals needing vehicle adaptations according to their needs, to meet their personal transport requirements and ultimately to facilitate independence and participation in society.
The NDIS TWG final report noted both the outdated approach of the Disabled Drivers and Disabled Passengers Scheme and the fact that the scheme needed to be addressed as a matter of priority. The Working Group agreed that proposals in this regard was a clear deliverable on which work could begin in the relatively near future.
The reason that DDS is considered outdated is that it is based on a 1960s based ‘in-or-out’, medically-based policy rationale. It does not meet the needs of a significant group of those with a disability and with mobility impairments; it requires individuals to 'prove' they are sufficiently 'disabled' and any expansion of eligibility criteria will still mean some individuals will not meet the criteria. The DDS administrative and operational model is not and will never be fit-for-purpose in meeting the standards expected of a modern scheme. The DDS is significantly divergent from international best practice on almost all scheme parameters,.
Research carried out by the Department of Finance Criteria Sub-Group as part of its contribution to the NDIS TWG established that Ireland is the only one of 32 examples that has a Department of Finance solely responsible for the scheme and the only country to rely solely on a lump sum tax relief for its vehicle-related provisions. It also confirmed that Ireland is the only country to provide life-long provisions and with the shortest vehicle retention period, i.e. provisions can be renewed every two years. In addition, its research indicated that only Ireland and Australia rely solely on a medical assessment for accessing vehicle-related provisions. Unlike most other countries’ provisions, the DDS has minimal controls for receipt of provisions, creating considerable scope for maximisation and on some occasions misuse of provisions. In short, the DDS has effectively become a vehicle purchase, not a vehicle adaptation, scheme.
Since the 1960s, the DDS has been subject to a series of very limited and disparate ad-hoc changes which have added layer upon layer of administrative complication, and which have done nothing to assist a considerable number of those with mobility issues. Making further changes to the DDS to widen its scope is not feasible or credible when considered in this context.
Consequently, I believe it is imperative to design and implement a new needs-based, grant-aided vehicular adaptation scheme to replace the DDS. If put in place, this will provide one targeted solution to personal transport for those that need vehicular adaptations to improve their functional ability. This is a matter for the Government to decide.
342. Deputy Eoin Ó Broin asked the Minister for Finance if he will provide an update regarding access to primary medical certificates for applicants; when the DDMBA is due to resume hearings; the action being taken by his Department to ensure the disabled drivers and disabled passengers scheme is available and functioning correctly for those who are entitled to the benefits of it; and when he envisages that the backlog of appeals will be dealt with. [27104/23]
View answerThe Disabled Drivers and Disabled Passengers Scheme provides relief from Vehicle Registration Tax and VAT on an adapted car, as well as an exemption from motor tax and an annual fuel grant.
The Scheme is open to severely and permanently disabled persons as a driver or as a passenger and also to certain charitable organisations. In order to qualify for relief, the applicant must hold a Primary Medical Certificate (PMC) issued by the relevant Senior Area Medical Officer (SAMO) or a Board Medical Certificate issued by the Disabled Driver Medical Board of Appeal (DDMBA). To qualify for a PMC an applicant must be permanently and severely disabled, and satisfy at least one of the six medical criteria, as set out in the Finance Act 2020.
In the event that a PMC is not granted by the relevant Senior Area Medical Officer an appeal may be made to the independent Disabled Drivers Medical Board of Appeal (DDMBA).
At an appeal hearing the Board reviews the decision by a HSE Primary/Senior Area Medical Officer and determines if an appellant does, or does not meet, one of the six medical criteria. Only if an appellant meets one of the six eligibility criteria will the Board issue a Board Medical Certificate.
I have no role in relation to the granting or refusal of PMCs and the HSE and the Medical Board of Appeal must be independent in their clinical determinations.
Following the resignation of all previous DDMBA members in November 2021, I had hoped that I would be in a position to establish a new DDMBA and recommence the appeals process by this point.
With respect to the recruitment of new members, as background five members are legislatively required for a functional Board with a quorum of three needed for any appeal hearing. The Department of Health has led on all actions and tasks with respect to Expression of Interest Campaigns to recruit candidates. Department of Finance officials have provided support to the Department of Health in this matter. Active recruitment efforts began shortly after the resignation of all members in November 2021, with the first Expression of Interest Campaign launched in January 2022. By November 2022 after three recruitment campaigns, five individuals had been nominated by the Minister of Health, pending successful completion of Garda vetting of two final candidates. These candidates successfully completed Garda vetting in January 2023.
Engagement began in December 2021 with the National Rehabilitation Hospital (NRH), to ascertain the conditions for their continued hosting of the new DDMBA. In February 2023, the National Rehabilitation Hospital (that has hosted the DDMBA since 2000) indicated their intention to withdraw their services with immediate effect. Finance and Health officials are actively seeking to implement new arrangements, including engaging with the NRH. As there are a range of requirements and complex issues involved this may take some time.
In March 2023, one nominated member of the DDMBA resigned for personal reasons. The Department of Health with support from Department of Finance officials launched another Expression of Interest Campaign on 3rd April 2023 with a closing date of 28th April 2023. One candidate has been interviewed.
Requests for appeal hearings can still be sent to the DDMBA secretary based in the National Rehabilitation Hospital.
Assessments for the primary medical certificate, by the HSE, are continuing to take place. In this regard, an important point to make is that even though there has been no appeal mechanism since the previous Board resigned, applicants who have been deemed not to have met one of the six eligibility criteria required for a PMC are entitled to request another PMC assessment six months after an unsuccessful PMC assessment.
343. Deputy Michael Healy-Rae asked the Minister for Finance when private pension holders will be compensated and have levies stopped on their pensions (details supplied); and if he will make a statement on the matter. [27123/23]
View answerI assume the Deputy is referring to the levy which was charged on pension schemes from 2011 to 2015 in accordance with section 125B of the Stamp Duties Consolidation Act 1999.
The levy was introduced in the wake of the financial crash, at a time when the economy was in very serious difficulties. It was charged on the market value of assets in pension schemes held on 30 June in each year at a rate of 0.6% (2011 to 2013), 0.75% (2014) and 0.15% (2015). Liability for the levy rested with trustees of pension schemes and others responsible for the management of pension fund assets.
It is important to note that this levy was discontinued from 2016.
Under the legislation, the payment of the levy was treated as a necessary expense of a pension scheme and it was a matter for the trustees or insurers to decide when and how the levy should be passed on to scheme members and to what extent, given the particular circumstances of the pension schemes for which they were responsible. I have no detailed information on the decisions made by pension fund trustees or others in relation to the passing on of the full or a partial impact of the levy to the current, deferred or former (retired) members of pension schemes.
I am aware, however, that where trustees have made the decision to pass on the impact or part of the impact of the levy to pensioners that a smaller reduction in pension payments over the lifetime of the pension may have been made in many cases in preference to a larger reduction over a shorter period.
344. Deputy Pearse Doherty asked the Minister for Finance if the revenue foregone through the Special Assignee Relief Programme is factored within the base for each of the years 2024, 2025 and 2026; and if he will make a statement on the matter. [27126/23]
View answerThe Budget Day costing of measures announced is published in the Tax Policy Changes document. As the Deputy will be aware, at Budget 2023 the Special Assignee Relief Programme (SARP) was extended until end-2025. This was considered to be accounted for in the tax base and was cost-neutral in Budget package terms, although there will be a marginal revenue gain in 2024 and 2025 as a result of the increase to the minimum income limit for new entrants. This is reflected in the fiscal projections.
I am advised that Revenue does not maintain a projected future cost for SARP. The estimated total cost of the measure for 2020, the most recent year for which Revenue statistics are available, is €36.6 million.
SARP is currently due to sunset at end 2025. If the measure is extended beyond that date, cost estimates will be subject to revision based on the latest available data at the time.
345. Deputy Pearse Doherty asked the Minister for Finance the estimated revenue that would be generated in 2024 by introducing a 40% rate of capital gains tax on the disposal of assets made by persons in cases in which the gains accrued are in excess of individual incomes in excess of €500,000, in order that the 40% rate only applies to gains made above the aforementioned threshold, assuming the application of the revised entrepreneur relief. [27128/23]
View answerIt is assumed that the Deputy is referring to increasing the rate of Capital Gains Tax on net chargeable gains in excess of €500,000, for individuals with incomes in excess of €500,000, and assuming the continuation of entrepreneur relief.
I am advised by Revenue that the estimated full year gain from the increase in rate to 40 per cent for the proposed change is in the region of €21 million. This estimate is based on 2020 data, the latest year for which fully analysed data are available and assumes the continuation of entrepreneur relief. Additionally, it assumes no change in behaviour by individuals resulting from the increase in the tax rate.
346. Deputy Eoin Ó Broin asked the Minister for Finance if he will outline, in tabular form, the amount of unpaid VAT and penalties imposed on defaulting yacht and pleasure boat owners for the previous three years; the VAT rate on yachts and pleasure boats; and the amount of revenue raised on yachts and pleasure boats in the past five years, in tabular form. [27174/23]
View answer347. Deputy Eoin Ó Broin asked the Minister for Finance the VAT rate on the purchase of private aircraft such as planes, jets, helicopters and so on; and the amount of revenue raised on private aircraft in the past five years, in tabular form. [27175/23]
View answer348. Deputy Eoin Ó Broin asked the Minister for Finance the number of car purchases that were subject to €23,000 or more in VAT for the years 2022 and to date in 2023, in tabular form. [27176/23]
View answer349. Deputy Eoin Ó Broin asked the Minister for Finance the number of car purchases that were subject to €18,400 or more in VAT for the years 2022 and to date in 2023, in tabular form. [27177/23]
View answerI propose to take Questions Nos. 346, 347 to 349, inclusive, together.
I am advised by Revenue that traders are not required to identify the VAT generated from the supply of specific goods and services on their VAT returns. Therefore, it is not possible, using information provided on tax returns, to identify the amount of VAT collected from the supply of particular goods such as those indicated by the Deputy. Equally, it is not possible to identify amounts of unpaid VAT or of interest or penalties related to the sale of such goods.
The Deputy should note that the sale of pleasure craft, yachts, helicopters, and other aircraft are subject to the standard VAT rate of 23%. I am advised by Revenue that it publishes a VAT rate database which provides the VAT rate applicable to a wide range of goods and services. This is available on the Revenue website at
www.revenue.ie/en/vat/vat-rates/search-vat-rates/VAT-rates-database.aspx.
In relation to car purchases, I am advised by Revenue that, based on vehicle registration records, the numbers of vehicles subject to VAT at the levels mentioned by the Deputy are provided in the table below.
|
Year |
Subject to between €18,400 and €22,999 in VAT |
Subject to €23,000 or more in VAT |
|
2022 |
1,244 |
363 |
|
2023* |
785 |
431 |
*To the end of April 2023
350. Deputy Eoin Ó Broin asked the Minister for Finance if he will outline the dividends or other monies received from the ESB for each year from 2009 to date, in tabular form; and to outline the manner in which he directed those dividends and monies to be used. [27178/23]
View answerI wish to advise the Deputy that the following amounts were received from the ESB from 2009 to date. Dividend receipts are received and booked as non-tax revenue and contribute to the Exchequer balance in the year of receipt. Expenditure policy is a matter for individual departments and the Department of Public Expenditure, NDP Delivery and Reform.
|
Year |
€ |
|
2009 |
€77,868,753 |
|
2010 |
€89,718,346 |
|
2011 |
€73,168,534 |
|
2012 |
€68,840,492 |
|
2013 |
€139,463,125 |
|
2014 |
€116,262,141 |
|
2015 |
€258,717,081 |
|
2016 |
€82,165,397 |
|
2017 |
€109,967,773 |
|
2018 |
€4,386,545 |
|
2019 |
€41,199,070 |
|
2020 |
€47,633,604 |
|
2021 |
€77,675,634 |
|
2022 |
€121,686,585 |
351. Deputy Ged Nash asked the Minister for Finance if he will outline the steps his Department takes to ensure that consulting firms do not share confidential information in terms of policy development within his Department with other sections of their business in order to gain competitive advantage; and if he will make a statement on the matter. [27189/23]
View answerThe ‘National Public Procurement Policy Framework’ issued by the Office of Government Procurement (OGP) in November 2019, sets out the procurement procedures to be followed by government departments and state bodies in accordance with EU rules and national guidelines. In addition, my Department has its own internal policy and guidance documents to assist staff to comply with all procurement regulations. In accordance with OGP guidance and templates the Department makes use of confidentiality agreements and contract provisions to address conflict of interest matters. The Office of Government Procurement’s contracts and standardised template documents contain substantive provisions to address confidentiality and conflict of interest matters. The Tenderer’s statement constitutes acceptance of the Request For Tender conditions, the Contract Terms and Conditions and the Confidentiality Agreement. As per these conditions, Contractors are required to carry out a conflict of interest check and ensure that any conflicts arising in the course of the contract are raised with the Client. In such circumstances, the Client has grounds to terminate the contract immediately.
352. Deputy Pearse Doherty asked the Minister for Finance the effective tax rate in the form of dividend withholding tax paid by Irish real estate funds as a proportion of operating and pre-tax profits respectively in each of the years 2018 to 2022; and if he will make a statement on the matter. [27195/23]
View answerThe Irish Real Estate Fund (IREF) tax regime was introduced in Finance Act 2016. An IREF is an investment undertaking, or a sub-fund, which derives 25% or more of its market value (either directly or indirectly) from real estate assets in the State. IREFs are not subject to dividend withholding tax, they are subject to an IREF Withholding Tax (WHT) of 20% on distributions to non-resident investors. The legislative provisions exempt certain categories of non-resident investors such as pension funds, life assurance companies and other collective investment undertakings from having IREF withholding tax applied in circumstances where the appropriate declarations are in place.
Irish resident investors are generally subject to a separate investment undertaking tax, at a rate of 41% for individuals and 25% for companies, on distributions received from the fund.
In addition to a 20% IREF WHT on distributions, the Finance Act 2019 introduced a charge to income tax at the rate of 20% at the level of the IREF to counter the use of excessive debt and other payments to reduce distributable profits. The three anti-avoidance measures introduced in 2019 included (i) a debt cap, to limit excessive leveraging and resulting interest, (ii) a property financing cost ratio, to limit excessive interest rates, and (iii) a “wholly and exclusively” test to limit excessive expenses.
IREF WHT applies on the happening of an “IREF taxable event” which is essentially the passing of value or profits to the unitholder. The operating and pre-tax profits/losses of an IREF include unrealised notional amounts (such as increases or decreases in the value of property held by the IREF) in addition to realised amounts. Therefore, it is not meaningful to compare the amount of tax arising on the transfer of realised profits to investors with the accounting profits/losses of an IREF. In relation to 2020 for example, accounting losses were reported but IREF withholding tax was still collected on distributions of profits and fund-level income tax also applied.
To assist the Deputy, and subject to the clarifications above as to the nature of the profit/loss figures, I have set out in the table below information on the level of operating and pre-tax profits/losses* contained in the financial statements in respect of the years 2018 to 2021 together with the level of IREF WHT and income tax paid. I am advised by Revenue that the profit figures for 2022 are not yet available.
Table 1 – IREF Operating Profit/Loss and Profit/Loss Before Tax Figures* as per IREF Financial Statements
|
- |
2018 |
2019 |
2020 |
2021 |
|
€ |
€ |
€ |
||
|
Operating Profit (Loss) (accounting measure, including realised and unrealised amounts) |
882,634,659 |
1,159,450,861 |
(440,534,785) |
1,264,869,410 |
|
Profit/(Loss) Before Tax (& after finance costs) (accounting measure, including realised and unrealised amounts) |
522,011,935 |
724,795,840 |
(743,195,254) |
998,893,606 |
|
IREF WHT Deducted/Paid |
28,229,097 |
65,759,048 |
36,799,674 |
31,716,359 |
|
Income Tax Paid |
N/A |
6,283,716 |
16,516,637 |
12,091,918 |
|
Total Tax Paid |
28,229,097 |
72,042,764 |
53,316,311 |
43,808,276 |
*I am advised by Revenue that the profit amounts set out in Table 1 are provided for indicative purposes only and are subject to caveats and were prepared for tax compliance purposes. There can be inconsistencies in how the figures are reported by IREFs and in some cases the figures have been netted. There can also be inconsistency in the length of the financial periods, with some in excess of 12 months.
353. Deputy Holly Cairns asked the Minister for Finance the steps he is taking to ensure that the fuel grant element of the disabled drivers' and passengers scheme facilitates disabled drivers charging their electric car; and if he will make a statement on the matter. [27204/23]
View answerThe Disabled Drivers & Disabled Passengers Scheme (DDS) provides relief from VRT and VAT on an adapted car, as well as an exemption from motor tax and an annual fuel grant.
Under DDS provisions, the reliefs from VRT and VAT are generous in nature amounting to up to €10,000, €16,000 or €22,000, depending on the level of adaption required for the vehicle. There is no differentiation between electric and other vehicles in terms of available VRT/VAT relief.
Section 135C(3)(b) of the Finance Act 1992 separately provides that a Category A series production electric vehicle can avail of relief of up to €5,000 on the VRT due. Thus the amount of VRT due or paid on an electric vehicle may be lower than the maximum DDS relief permitted. In such cases the VRT relief provided through the DDS will equate to the actual VRT due or paid. VAT refunds are provided regardless of the type of vehicle.
DDS Scheme recipients with a petrol or diesel vehicle may claim payment of a fuel grant. The fuel grant covers the excise tax elements of petrol, diesel and liquefied petroleum gas (LPG). It is based on a per litre rate in respect of the mineral oil taxes applying to these products. An annual maximum of 2,730 litres applies in respect of a driver or passenger, and 4,100 litres in respect of an organisation.
As electricity supplied for household use is not subject to excise tax, there is no provision under the DDS to cover electricity used to recharge electric vehicles.
354. Deputy Pearse Doherty asked the Minister for Finance if he will provide an update on the implementation of the findings of the review undertaken by Revenue in 2018 and 2019 with respect to the flat rate expenses regime; and if he will make a statement on the matter. [27209/23]
View answerSection 114 of the Taxes Consolidation Act (TCA) 1997 provides for a tax deduction in respect of expenses incurred wholly, exclusively and necessarily by an individual in the performance of the duties of his or her employment.
I am advised by Revenue that the flat rate expense (FRE) regime it operates is done so on an administrative basis, where both a specific commonality of expenditure exists across an employment category and the statutory requirement for the tax deduction as set out in section 114 of the TCA 1997 is satisfied - namely, that the expenses are wholly, exclusively and necessarily incurred in the performance of the duties of the office or employment by the employee concerned and that such expenses are not reimbursed by his or her employer.
The FRE regime was established to apply a uniformity of approach to tax deductibility for expenses of large groups of employees and to facilitate ease of administration for both Revenue and employees. The expense should apply to all employees in that category and not be discretionary.
A review of the FRE regime was undertaken by Revenue in 2018/2019. Implementation of those findings has been deferred a number of times, pending consideration by the Tax Strategy Group of the tax deductibility of expenses in employment.
Given the time since the 2018/2019 review, it may be necessary for Revenue to further review a number of the FREs. With this in mind and given the prevailing circumstances, Revenue has deferred the implementation of the findings of the 2018/2019 review to allow time to complete its further review of certain FRE rates. Once this work is concluded, a further update on the implementation of changes to the FRE regime will be made available and published on the Revenue website.
In the meantime, where the 2018/2019 review identified FRE categories for which an increase in the existing rate is appropriate, Revenue will implement these changes so that the benefit of such a change will apply from 1 January 2023. The Revenue website will be updated with regard to the necessary steps to avail of the increases once arrangements are finalised.
Revenue also advises me that it remains committed to the FRE regime and encourages all taxpayers to avail of their full tax relief entitlements. It should be noted that all employees retain their statutory right to claim a deduction under section 114 of the TCA 1997 in respect of an expense incurred wholly, exclusively and necessarily in the performance of the duties of their employment, to the extent to which such expenses are not reimbursed by the employer.
355. Deputy Michael Healy-Rae asked the Minister for Finance if he will address a matter (details supplied); and if he will make a statement on the matter. [27249/23]
View answerA person engaged in the microgeneration of electricity is taxable each year on their profits/gains from the sale of electricity as calculated under Schedule D Case I or Case IV, as the case may be. Profits arising from the carrying on of a trade are chargeable to tax under Case I whereas profits generated from activities which do not have the characteristics of a trade are chargeable to tax under Case IV.
Revenue have advised me that, generally, profits earned from the micro-generation of electricity by private individuals in a domestic setting are liable to tax under Case IV on the basis that the individual is not trading or in the business of generating electricity for sale or supply. In assessing income under Case IV there is no specific provision in the tax code setting out allowable or dis-allowable costs. However, it is Revenue practice to allow a deduction for incidental costs directly associated with the generation of Case IV profits. In calculating such profits, a deduction is allowed for any expenses of a revenue nature (for example, costs of repair and maintenance of equipment) incurred wholly and exclusively in generating the profits. As there will be a personal element to any expenditure incurred, a just and reasonable apportionment of the expenses will be necessary. No deduction is allowed for any capital expenditure incurred (for example, the cost of purchasing and installing the solar panels). Additionally, no capital allowances are available in relation to such expenditure as the profits do not arise from the carrying on of a trade.
I would note, however, that section 216D of the Taxes Consolidation Act 1997 provides that up to €200 per year of profits arising to an individual from the generation of electricity from renewable, sustainable or alternative sources of energy at the individual’s sole or main residence (referred to as the micro-generation of electricity) is exempt from Income Tax, USC and PRSI. There is no requirement to include the exempt profits in an income tax return. However, should the individual have profits exceeding €200 from the micro-generation of electricity in a year of assessment, the excess is taxable as outlined above and should be included in a return of income.
356. Deputy John Paul Phelan asked the Minister for Finance the total number of persons' who paid PAYE income tax and/or the universal social charge in 2022; and if he will make a statement on the matter. [27295/23]
View answer357. Deputy John Paul Phelan asked the Minister for Finance the total number of persons' whose income in 2022 was subject to PAYE income tax and/or universal social charge; the total number of persons' who paid any amount of either tax in that year; and if he will make a statement on the matter. [27296/23]
View answerI propose to take Questions Nos. 356 and 357 together.
I am advised by Revenue that a taxpayer’s final income tax liability for a year, if any, is dictated by the entirety of their income for that year, as well as the impact of all tax credits, reliefs and deductions claimed and whether they are single or jointly assessed. Income tax and Universal Social Charge (USC) liabilities for 2022 are not finalised until the relevant tax returns are filed, and PAYE taxpayers have up to four years to do so.
Although, the 2022 position is not finalised, I am further advised by Revenue that, based on payroll submissions received from employers for 2022, 3.23 million distinct individuals were either employed or in receipt of an occupational pension in 2022. Of this cohort, 2.59 million paid income tax through payroll deductions (i.e. PAYE) and 2.86 million paid USC through payroll deductions.
It should be noted that this data refers only to payroll deductions in respect of individuals, and does not take account of additional tax credits, reliefs and or deductions that may be claimed after the end of each tax year. In addition, it does not included self-employed taxpayers with Case I or II income only. As such, it should be noted that the figures for 2022 are subject to change for the reasons outlined above.
358. Deputy Richard O'Donoghue asked the Minister for Finance if he will consider putting a plan in place to give interest relief to mortgage holders (details supplied); and if he will make a statement on the matter. [27331/23]
View answerAs I have stated previously in the House, the position is that the formulation and implementation of monetary policy in the eurozone and the setting of official interest rates is an independent matter for the ECB. The Government has no role in setting official interest rates, nor in setting the retail interest rates that lenders may charge on their loans, including mortgages. That is a business and commercial matter for individual lenders.
As the Deputy may be aware, mortgage interest relief for principal private residences was phased out on a gradual basis over the period 2009 to 2020. The decision to abolish it was taken in the wake of the financial crisis, with the cost of the relief being one of the influencing factors. It cost more than €700 million in 2008. Prior to its curtailment and eventual abolition, the top two income deciles in 2005 accounted for close to half of the tax forgone through tax relief. This issue was highlighted in the findings of the 2009 Commission on Taxation report. The relief cost approximately €280 million in 2005.
While I am acutely aware that there have been increases in certain mortgage rates by some lenders, it is important to point out that mortgage interest rates, in particular fixed interest rates, have fallen over the past number of years. For example, in December 2014, the average level of fixed interest rates for new lending was 4.11 per cent compared with 3.44 per cent in March 2023. Furthermore, in March, mortgage rates in Ireland were amongst the lowest in the eurozone.
The data also indicate that a significant portion of new mortgages, 89 per cent in March 2023, are now fixed rate mortgages and this will protect borrowers in the event of a rise in official and market interest rates at least for the period that the interest rate is fixed.
The introduction or reintroduction of mortgage interest relief for principal private residences may not be the best course of action to assist home owners with rising interest rates. For example, there is additional scope for many borrowers, in particular variable rate mortgage borrowers who have built up equity in their home, to look at alternative mortgage options and to reduce their mortgage costs.
The reintroduction of mortgage interest relief, even on a selective or tailored basis, is likely to involve significant costs and needs to be considered, not on an ad hoc basis, but in the context of a range of other cost of living measures being provided.
It should be noted that this Government has responded swiftly and decisively, multiple times, to help to offset the most severe impacts of inflation, with a particular focus on protecting the most vulnerable. Overall, €12 billion in direct relief has been made available to counter the effects of inflation, with the policy response designed to avoid generating second round effects that could lead to an inflationary spiral.
The recent report of the Commission on Taxation and Welfare put forward no case or recommendation for the reintroduction of relief for mortgage interest. Further, the OECD has recommended limiting or phasing out mortgage interest relief on owner-occupied housing.
For all of these reasons, the annual Budget is the appropriate time to decide how the fiscal resources available can best be deployed.
359. Deputy Mairéad Farrell asked the Minister for Finance the estimated cost to the Exchequer of increasing the current amount of tax relief of €7,000 that can be claimed per person for postgraduate fees, including the student contribution, to €8,000, €9,000 and €10,000, in tabular form; and if he will make a statement on the matter. [27382/23]
View answer360. Deputy Mairéad Farrell asked the Minister for Finance the estimated cost to the Exchequer of allowing tax relief on the first €1,000, €1,500 and €2,000 spent on tuition fees, including the student contribution, for full-time students, in tabular form; and if he will make a statement on the matter. [27383/23]
View answer361. Deputy Mairéad Farrell asked the Minister for Finance the estimated cost to the Exchequer of allowing tax relief on the first €500 and €1,000 of tuition fees, including the student contribution, for part-time students, in tabular form; and if he will make a statement on the matter. [27384/23]
View answerI propose to take Questions Nos. 359 to 361, inclusive, together.
Section 473A of the Taxes Consolidation Act 1997 provides for income tax relief in respect of qualifying tuition fees paid by an individual for a third level education course (including a postgraduate course), subject to the conditions set out in that section. The relief is granted at the standard rate of income tax (currently 20%), where an individual pays “qualifying fees” for an approved course whether on his or her own behalf or on behalf of another individual.
“Qualifying fees” mean tuition fees in respect of an approved course at an approved college and includes what is referred to as the “student contribution”. No other charges and levies qualify for tax relief e.g. administration fees, student centre levy, examination fees, capitation fees. Tuition fees that are, or will be, met directly or indirectly by grant, scholarship, employer contribution or other means are deducted in arriving at the net qualifying fees.
The maximum amount of fees that can qualify for the relief is €7,000 per person, per course, per academic year. Each claim is subject to a single disregard amount each tax year. This amount is taken away from the total qualifying fees for the claim, such that relief can't be received on the disregarded portion. The disregard is currently €3,000 in the case of a full-time student and €1,500 for a part time student. If a claim has been made for more than one student or course, this disregard amount will only be deducted from the claim once.
I am advised by Revenue that it is not possible, based on the available data, to estimate the costs associated with the proposals outlined by the Deputy.
In relation to the question regarding postgraduate fees, Revenue have further advised that data on the existing relief are not captured separately in relation to postgraduate courses only.
In relation to the other questions, Revenue advises that the manner in which the data on the existing relief are currently captured and retained precludes analysis for statistical purposes at this time.
Full details of the existing relief, including the conditions that apply, are set out on the Revenue website at www.revenue.ie/en/personal-tax-credits-reliefs-and-exemptions/education/tuition-fees-paid-for-third-level-education/index.aspx.
