Header Item Written Answers Nos. 248-259
   Header Item Bank Guarantee Scheme Losses
   Header Item European Financial Stability Facility
   Header Item NAMA Transactions
   Header Item Hidden Economy Monitoring Group Issues
   Header Item Property Taxation Application
   Header Item Tax Yield
   Header Item Credit Unions Issues
   Header Item Departmental Funding

Tuesday, 5 February 2013

Dáil Éireann Debate
Unrevised

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Written Answers Nos. 248-259

Bank Guarantee Scheme Losses

 248. 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 set out in tabular form the list of legal actions initiated by the holders of subordinated or senior bonds in the covered banks; the date the action was initiated; the identity of the applicant or applicants; the identity of the respondent and the jurisdiction in which the action has been initiated. [5295/13]

Minister for Finance (Deputy Michael Noonan): Information on Michael Noonan Zoom on Michael Noonan The covered institutions have supplied the following information in response to the Deputy's questions: PTSB has informed me that no legal actions have been initiated by the holders of subordinated or senior bonds in respect of PTSB. AIB has informed me that one claim has been initiated by a New York based entity. It commenced litigation in the United States District Court for the Eastern District of New York against AIB arising out of the Liability Management Exercise in May 2011. The claim was dismissed by the New York courts in August 2012 on the grounds that New York was not the appropriate jurisdiction in which to bring proceedings. All relevant disclosures in respect of this case are publicly available through New York District Court website www.nysd.uscourts.gov. BOI has informed me that in its published financial reports, shareholder circulars and prospectuses, which are all available on the Bank of Ireland website, it provides appropriate disclosures concerning material litigation related issues. IBRC has informed me of the following cases and details:

ProceedingsDate CommencedPlaintiff/ ApplicantsDefendant/ RespondentJurisdiction
Assenagon Asset Management v IBRC 2012/2264; HC11C0132015 April 2011Assenagon asset Management SAIBRCEngland & Wales
Enid Investment Corporation v IBRC 2012/2989; HC12B031563 August 2011Enid Investment CorporationIBRCEngland & Wales
Fir Tree Capital Opportunity Master Fund LP and Fir Tree Value Master Fund LP v Anglo Irish Bank Corporation Limited (formerly Anglo Irish Bank Corporation Plc) Civil Action No.11/CV/09559 March 2011Fir Tree Capital Opportunity Master Fund LP and Fir Tree Value Master Fund LPIBRCUnited States District Court – Southern District of New York


United States Court of Appeal for the Second Circuit.

European Financial Stability Facility

 249. 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 his statement on 21 January 2013, that, in relation to proposals apparently made at the recent Ecofin and Eurogroup meetings we are not talking about hundreds of millions, we are talking about savings of a certain amount of billions, if he will outline an illustrative calculation which would indicate how billions might be saved. [5296/13]

Minister for Finance (Deputy Michael Noonan): Information on Michael Noonan Zoom on Michael Noonan I refer the Deputy to the answer I gave to Question No. 73 of 30 January 2013 in which I outlined the background to the proposals to which he refers. I also set out the assumptions underpinning my assertion that an extension of our EFSF and EFSM loans could yield significant further savings, over time. In my answer on 30 January I noted that the savings arising will depend on a number of factors - the amount of loans for which a maturity extension is agreed, the length of any maturity extension and the assumption made about the extent to which the EFSF and EFSM borrowings are cheaper than borrowings by Ireland. It is possible to draw up various combinations of these factors which would give rise to significant savings of the order of magnitude referenced. Any such scenario would be highly tentative and sensitive to the assumptions about the various factors outlined. As the Deputy is aware this matter is under discussion at EU level, and at this stage I do not think it is appropriate to provide any particular estimate, even for illustrative purposes.

NAMA Transactions

 250. 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 amount of state aid paid by the National Asset Management Agency in its acquisition of €10 billion par value loans at Bank of Ireland for €6.1 billion.  [5297/13]

Minister for Finance (Deputy Michael Noonan): Information on Michael Noonan Zoom on Michael Noonan I would like to draw the Deputy’s attention to Table 3 on page 33 of the 2011 Annual Report. This table details NAMA's loan acquisitions by institution. It shows that NAMA paid a consideration of €5.6 billion for loan balances of €9.9 billion in the case of BOI. I am advised that, when it granted its approval to the NAMA scheme in February 2010, the European Commission stated that the difference between the long-term economic value of bank assets and their current market value was the State aid element of the scheme. The Comptroller and Auditor General Special Report No. 79, NAMA Management of Loans, which was published in February 2012 gives a detailed breakdown of the State Aid for each of the banks. However, I would refer the Deputy to Question No. 272 answered on 29 January 2013, regarding the approval of the final tranches by the EU.

Hidden Economy Monitoring Group Issues

 251. 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. 50 of 4 October 2012, if he will name the members of the hidden economy monitoring group and to provide details of the remuneration and expenses for each member.  [5312/13]

 252. 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 number of times the hidden economy monitoring group has met.  [5313/13]

 253. 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 terms of reference for the hidden economy monitoring group; to whom they report, in what form and at how regularly.  [5314/13]

Minister for Finance (Deputy Michael Noonan): Information on Michael Noonan Zoom on Michael Noonan I propose to take Questions Nos. 251 to 253, inclusive, together.

I am advised by the Revenue Commissioners that the Hidden Economy Monitoring Group (HEMG) was set up in 1990 at the request of the Central Review Committee of the Programme for National Recovery. Chaired by Revenue, it is a multilateral group comprising of representatives of IBEC, SFA, CIF, ICTU and SIPTU, Government agencies, the Department of Social Protection, the Department of Jobs, Enterprise and Innovation and the National Employment Rights Agency. Its terms of reference are to provide a forum for the exchange of views on the effectiveness of measures introduced in combating the hidden economy between the Revenue Commissioners, the Department of Social Protection, the Department of Jobs, Enterprise and Innovation and the National Employment Rights Agency and representative bodies of employers, unions and industry, and to prepare a brief report on its activities each year for presentation to the Department of an Taoiseach.

The group met three or four times a year between 1990 and 2011 and contributed to the establishment of multi-agency investigation units, producing a "Code of Practice for Determining Employment or Self-Employment Status of Individuals", and in 2007 sponsored legislation which provided for the exchange of employment information on the earned income of individuals between the Minister for Enterprise, Trade and Employment, the Minister for Social and Family Affairs and the Revenue Commissioners, the first steps into information exchange. Under its terms of reference, the Group prepares a written annual report that is presented to the Department of the Taoiseach. I am further advised by the Revenue Commissioners that in 2011 the Group reviewed its own effectiveness and ability to deliver, in accordance with its terms of reference, and reached the conclusion that its would be better served by operating at a more local level, utilising resources more familiar with the difficulties that were being experienced by small and medium sized enterprises and unions locally and using local Government agency resources to arrive at workable solutions.

In November 2011, the full HEMG devolved its terms of reference to four regionally based liaison groups, namely the Border Midlands West, Dublin, East & South East and South West Hidden Economy Monitoring Liaison Groups, with a requirement that all groups meet regularly and provide reports as required to the HEMG. The constituent members of the Regional Liaison Groups nominated were locally based members of the original attendee representative bodies and agencies, with the meetings organised and chaired by Revenue officials. The four Regional Liaison Groups met a total of 11 times during 2012. The 2012 report of the HEMG is currently being prepared. On 30 January 2013 the full HEMG met to review the effectiveness of the first year of operations of the Regional Liaison Groups and to see what supports could be put in place to achieve and sustain improved outcomes from the work of the Groups. In order to make the HEMG more representative it was expanded to include a number of other interested representative bodies such as ISME and Retail Ireland. A schedule of meetings was agreed that requires the full HEMG to meet twice and the Regional Liaison Groups to meet quarterly in 2013.

None of the members of any of the Groups receives remuneration or expenses from the Exchequer arising from their membership of the Groups, or for any of the additional work they have carried out on behalf of the Groups. Given that individuals attend in a representative capacity, the actual members attending meetings varies from time to time. The Group is chaired by Mr. Declan Rigney, Assistant Secretary, Office of the Revenue Commissioners and the most recent meeting was attended by the Revenue Planning Division team - Mr. Séamas Ó Cathasaigh, Mr. Seán Nolan, Mr. Vincent Kenrick and Mr. John Morrissey; the Chairmen of the four Regional Liaison Groups (also Revenue) - Ms Phil Uí Bhróithe (Border/Midlands/West Region), Ms. Lynda Hendley (Dublin Region), Mr. Pat Murphy (South-West Region) and Mr. Thomas Keating (East/South/East Region); representatives of the other Government Agencies representatives - Mr. Phil Cox (Department of Social Protection), Mr. Fran Power (National Employment Rights Authority) and Ms. Joan Kehoe (Department of Jobs Innovation and Enterprise); representatives of the Employee Group (Unions) - Mr. Fergus Whelan (Irish Congress of Trade Unions) and Mr. Christy McQuillan (Services Industrial Professional and Technical Union); representatives of the Employer Group - Mr. Ger Brady (Irish Business and Employers Confederation), Mr. Eddie Keenan (Construction Industry Federation), Ms. Liz Carroll (Irish Small and Medium Enterprises) and Mr. Jim Copeland (Hardware Association of Ireland); and apologies were received from Ms. Avine McNally (Small Firms Association), Mr. Stephen Lynam (Retail Ireland), Mr. Donal O’Keefe (Licensed Vintners Association) and Mr. Patrick Cribben (Vintners Association of Ireland).

Property Taxation Application

 254. Deputy Maureen O'Sullivan Information on Maureen O'Sullivan Zoom on Maureen O'Sullivan asked the Minister for Finance Information on Michael Noonan Zoom on Michael Noonan if he has considered the implications of the proposed property tax, if it is imposed on housing associations particularly in view of the increasing demands on their services by many people, especially vulnerable people with mental health issues and addiction issues, former prisoners; and if he will make a statement on the matter. [5349/13]

Minister for Finance (Deputy Michael Noonan): Information on Michael Noonan Zoom on Michael Noonan The Government is aware of the important role played by the approved housing bodies in the provision of housing for those who face difficulty in living in our communities. To the extent that such groups are charities and are engaged in the provision of special needs housing, they should be eligible for the exemption for such housing which is provided for in the Finance (Local Property Tax) Act 2012. I understand that most of the various bodies that comprise the voluntary and co-operative sector in respect of the provision of social housing would have been approved for charitable status by the Revenue Commissioners. Indeed, such bodies must have such charitable status before they can be approved by the Department of the Environment, Community and Local Government for funding to be used in the provision of social housing. Such groups also provide general needs housing in the same way as a local authority provides such housing. Depending on the level of local authority funding provided, some voluntary bodies may have flexibility to provide housing for those not eligible for local authority housing. To provide for a blanket exemption for such bodies would obviously be inequitable vis-à-vis local authority tenants. For this reason, the Government decided not to accept the recommendation of the Thornhill Group that all charitable bodies should be exempt but to restrict the exemption to those properties that are used to provide special needs accommodation to persons who, for reasons of old age, physical or mental disability or other cause, need special accommodation and support to enable them to live in the community. I accept that Government policy places significant emphasis on the approved housing body sector as an important part of social housing supply in the future. Issues relating to the impact of the Local Property Tax on approved housing bodies are being examined.

Tax Yield

 255. Deputy Patrick Nulty Information on Patrick Nulty Zoom on Patrick Nulty asked the Minister for Finance Information on Michael Noonan Zoom on Michael Noonan the amount that would be raised for the Exchequer in a calendar year if the maximum pension fund was reduced from €2.3 million to €1.5 million; and if he will make a statement on the matter. [5362/13]

Minister for Finance (Deputy Michael Noonan): Information on Michael Noonan Zoom on Michael Noonan The Standard Fund Threshold (SFT) is the maximum allowable pension fund on retirement for tax purposes which was introduced in the Budget and Finance Act 2006 to prevent over-funding of pensions through tax-relieved arrangements. The SFT was reduced in Budget and Finance Act 2011 by over 50% to a level of €2.3 million with effect from 7 December 2010 with transitional arrangements to protect the capital values of the pension rights of individuals where these exceeded the reduced SFT on that date. No underlying data are available to my Department or to the Revenue Commissioners on which to base reliable estimates of the savings from a further significant reduction in the SFT to the level indicated in the question. Information on the numbers and values of individual pension funds or on individual accrued benefits are not generally required to be supplied to the Revenue Commissioners by the administrators of pension schemes and personal pension arrangements. The estimated savings indicated at the time in respect of the Budget and Finance Act 2011 change in the SFT were quite conservative, based as they were on incomplete data and using very broad assumptions. Indeed, those underlying data and assumptions may not be directly applicable to determining the effect of a further significant reduction.

The Deputy will be aware of the announcement which I made in my Budget 2013 speech that changes to the SFT regime and other possible changes to give effect to the commitment in the Programme for Government to cap taxpayers’ subsidies for pension schemes which deliver pension income of more than €60,000 will be put in place in 2014. On page A.10 of the Budget 2013 booklet which accompanied my Budget speech, I indicated that the full-year yield from these changes is estimated at €250 million. The Budget 2013 booklet made clear, however, that the estimated full-year savings are provisional at this time as further detailed analysis of the necessary changes and their impact will be required. In this regard, my Department has been engaging with representatives of the pensions sector over some time with a view, among other things, to gathering private pensions-related data which may be of value into the future in estimating the costs of potential changes in the pensions tax area. Those engagements will continue in the context of the further detailed analysis of the changes announced in the Budget.

  Question No. 256 answered with Question No. 242.

Credit Unions Issues

 257. Deputy Michael McGrath Information on Michael McGrath Zoom on Michael McGrath asked the Minister for Finance Information on Michael Noonan Zoom on Michael Noonan if, under the 1997 Credit Union Act, a nomination form signed by a member of a credit union supersedes the content of a member's will in the event of that member's death; and if he will make a statement on the matter. [5373/13]

 258. Deputy Michael McGrath Information on Michael McGrath Zoom on Michael McGrath asked the Minister for Finance Information on Michael Noonan Zoom on Michael Noonan the date on which the maximum amount of a credit union members savings that could be subject to a nomination form was increased from €13,000 to €23,000; if a credit union would be obliged to inform members who had a nomination form in place of such a change in the threshold.  [5374/13]

Minister for Finance (Deputy Michael Noonan): Information on Michael Noonan Zoom on Michael Noonan I propose to take Questions Nos. 257 and 258 together.

Statutory Instrument No. 546 of 2006 increased the amount of property in a credit union which a member can nominate on his or her death, from a maximum of €13,000 to a maximum of €23,000. This change came into effect on 17 October 2006. It would not be appropriate for me to comment on the other issues raised in the questions as this would involve an interpretation of the law, which is a matter for the courts.

Departmental Funding

 259. Deputy Damien English Information on Damien English Zoom on Damien English asked the Minister for Finance Information on Michael Noonan Zoom on Michael Noonan if he will provide details of all funding programmes in his Department that community, voluntary and sporting organisations may apply to for funding; if he will provide a brief overview of each programme; the opening and closing dates of each programme; the minimum and maximum amounts of funding that may be applied for; and if he will make a statement on the matter. [5383/13]

Minister for Finance (Deputy Michael Noonan): Information on Michael Noonan Zoom on Michael Noonan My Department does not operate any funding programmes for community, voluntary and sporting organisations.


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