COVID-19 PQ Responses · Topic – Benefit in Kind FIN/COVID/244/20 by Frank Feighan T.D. To ask...

Prepared by Corporate Affairs,

Department of Finance

www.gov.ie/finance

COVID-19 PQ Responses 17th April 2020

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Topic – Emergency Mortgage Moratorium FIN/COVID/052/20 by Darragh O’Brien T.D. To ask the Minister for Finance to immediately bring 'non-banks' under the emergency mortgage

moratorium scheme for the period of the COVID-19 crisis; and if he is willing to make a statement

on this matter.

FIN/COVID/196/20 by Darragh O’Brien T.D. To ask the Minister for Finance to immediately bring 'non-banks' under the emergency mortgage

moratorium scheme for the period of the COVID-19 crisis; and if he is willing to make a statement

on this matter.

On 18 March last I met with Banking and Payments Federation Ireland (BPFI) and the CEOs of the five main retail banks and following that meeting the banks outlined a coordinated approach to supporting their personal and business customers who have been impacted by the Covid-19 crisis. A number of important support measures were outlined for impacted borrowers including payment breaks of up to three months for mortgages and other loans. The following day, the BPFI confirmed that the main credit servicing firms and non-bank mortgage lenders would also support the Covid-19 related range of measures adopted by the main retail banks. More generally it should also be noted that the Central Bank of Ireland has stated, when dealing with their customers who have been impacted by Covid-19, that it expects all regulated firms, including banks, retail credit and credit servicing firms, to take a consumer-focused approach and to act in their customers’ best interests.

Topic – Loans FIN/COVID/241/20 by Frank Feighan T.D. To ask the Department of Finance if he can give a statement in relation to the following personal

guarantees aspect of the banks response to COVID19 (details supplied) -

Details Supplied:

Thanks for taking my call and the updates you are providing, they are a great help.

An issue that has popped up over the last few days is Personal Guarantees for business loans.

A number of business owners are worried that they may well be exposed if their business goes

under due to the Covid 19 shutdown. Also banks are requiring business owners to sigh further

Personal Guarantees if they are availing of emergency funds to keep their business going.

This could be a very big issue if there is a prolonged shut down and a slow recovery once

restrictions are lifted.

Thanks for your help with this

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The issue of personal guarantees in respect of business loans as set out by the Deputy has not been raised with me or officials in the Department to date. I have asked officials to look into this issue and I will revert to the Deputy in the near future Revenue has issued guidance in relation to the circumstances and the manner in which it will amend vehicle benefit-in-kind charges to take account of the impact of the COVID-19 crises. This guidance can be accessed via the below link: https://www.revenue.ie/en/corporate/communications/covid19/compliance-with-certain-reporting-and-filing-obligations.aspx

Topic – Benefit in Kind FIN/COVID/244/20 by Frank Feighan T.D. To ask the Minister for Finance in relation to the effect which COVID19 will have on the levels of

Benefit in Kind payable on travel costs and company cars due to the reduction in mileage, if the

issue is under consideration by his Department and if ways are being identified to address this

issue.

Revenue has issued guidance in relation to the circumstances and the manner in which it will amend vehicle benefit-in-kind charges to take account of the impact of the COVID-19 crises. This guidance can be accessed via the below link: https://www.revenue.ie/en/corporate/communications/covid19/compliance-with-certain-reporting-and-filing-obligations.aspx

Topic – Mortgages and Loans FIN/COVID/284/20 by Paul Murphy T.D. Will the Minister for Finance instruct the banks and all other lending institutions that mortgage

and / or loan repayment ‘Covid-19 breaks’ will take the form of extensions to the term of the

mortgage or loan; and that repayment remittances foregone during the period of the Covid-19

crisis will not be clawed back in the form of increased repayments over the original term of the

mortgage or loan?

On 18 March last I met with Banking and Payments Federation Ireland (BPFI) and the CEOs of the five main retail banks and following that meeting the banks outlined a coordinated approach to supporting their personal and business customers who have been impacted by the Covid-19 crisis. A number of important measures were outlined for impacted borrowers including payment breaks of up to three months for mortgages and other loans. The following day, the BPFI confirmed that the main credit servicing firms and non-bank mortgage lenders would also support the Covid-19 related range of measures adopted by the main retail banks.

Banking and Payments Federation Ireland (BPFI) has indicated that payment breaks, depending on what best suits an individual borrower’s particular situation, can include:-

a ‘full moratorium’ payment break where the full loan repayment amount, including both interest and principal repayment amounts, is postponed for an agreed period of time;

https://www.revenue.ie/en/corporate/communications/covid19/compliance-with-certain-reporting-and-filing-obligations.aspx




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an ‘interest only’ payment for an agreed period where only the interest falling due will be paid during the break period and that any principal payments which were also falling due can be deferred; consequently the loan balance will not reduce (or increase) during the break period.

However, it will also be essential that lenders fully explain the implications, including any associated cost or other significant impacts, of the particular payment break measures being put in place. For instance, lenders should outline if the repayment term of the mortgage will be extended due to the payment break, if monthly payments will increase following the resumption of the mortgage repayments, if interest will continue to accrue during the payment break and the implications this will have for the total cost of the credit, and any other significant matter for the customer when availing of a Covid-19 payment break, or indeed for any other reason. I understand that the Central Bank of Ireland is liaising with the BPFI in this regard. More generally, it should also be noted that the Central Bank of Ireland has emphasised that the broad provisions of the existing consumer protection framework applies and that, when dealing with their customers who have been impacted by Covid-19, it expects all regulated firms, including banks, retail credit and credit servicing firms, to take a consumer-focused approach and to act in their customers’ best interests.

Topic – Mortgages and Loans FIN/COVID/299/20 by Seán Haughey T.D. To ask the Minister for Finance and Public Expenditure and Reform if he is satisfied that the five

main banks and the main credit servicing companies are implementing the agreement reached

with the Banking and Payments Federation of Ireland in relation to the covid-19 three-month

mortgage payment break in a satisfactory and practical way; If these arrangements can be

extended to borrowers from the Educational Building Society; and if he will make a statement on

the matter.

On 18 March last I met with Banking and Payments Federation Ireland (BPFI) and the CEOs of the five main retail banks, including AIB and in respect of which EBS is a part, and following that meeting the banks outlined a coordinated approach to supporting their personal and business customers who have been impacted by the Covid-19 crisis. A number of important measures were outlined for impacted borrowers including payment breaks of up to three months for mortgages and other loans. I am satisfied that the banking sector, including the EBS (see information attached: https://www.ebs.ie/covid19/concerned-about-mortgage-repayments), is now offering flexible arrangements to assist their Covid-19 impacted borrowers. However, if a consumer is not satisfied with a lenders response to a request for a Covid-19 payment break, then the complaints procedure as provided for in the Consumer Protection Code will be available to that borrower.

Topic – Mortgages and Loans FIN/COVID/329/20 by Carol Nolan T.D. To ask the Minister for Finance to provide details of his engagement with representatives from the

Banking & Payments Federation Ireland from 1 March 2020 to date; if further extensions to the

freezing of loan and mortgage repayments were discussed at these meetings and if he will make a

statement on the matter.

https://www.ebs.ie/covid19/concerned-about-mortgage-repayments

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On 18 March last I met with Banking and Payments Federation Ireland (BPFI) and the CEOs of the five main retail banks and following that meeting the banks outlined a coordinated approach to supporting their personal and business customers who have been impacted by the COVID-19 crisis. A number of important measures were outlined by the banks for their impacted borrowers including:- • flexible arrangements, including a payment break for mortgages and other loans. Customers affected by COVID-19 must contact their bank to discuss the flexibility available to them, including the possibility of a payment break of up to 3 months; • support for buy-to-let bank customers with tenants affected by COVID 19. Customers with rental property in which the tenants are adversely impacted by COVID-19 will also be provided with flexibility including with an opportunity to seek a payment break of up to 3 months, which will allow them to exercise due levels of forbearance to their tenants; • extensive supports for SME customers – banks are working to ensure a wide range of credit, cash flow and supply chain supports are offered to businesses who are trying to manage the pressures arising from COVID-19. A deferral of up to 3-months on loan repayments will be of assistance to many businesses; • in addition, the banks are adopting a customer-focused approach to these businesses with a wide variety of tailored supports including extensions of credit lines, risk guarantees, and trade finance. Subsequent to that meeting, the BPFI and the various lenders published further information and details on the supports for borrowers including the position that the three month payment break for customers affected by COVID-19 would be followed by ongoing reviews depending on the scale and extent of the situation. As the representative body for the banking industry, my Department has maintained close contact with the BPFI over this difficult period, and will continue to do so as the COVID-19 issue develops.

Topic – Credit Unions FIN/COVID/337/20 by Carol Nolan T.D. To ask the Minister for Finance if he has engaged with the Irish League of Credit Unions and the

Credit Union movement generally to establish how it may need to be assisted in its efforts to

support local communities and businesses experiencing repayment challenges as a result of the

Covid-19 crisis; and if he will make a statement on the matter

I wish to inform the Deputy that both I and my Department of Finance officials have engaged extensively with the credit union representative bodies, including the Irish League of Credit Unions (ILCU) and with credit unions themselves since the beginning of the Covid-19 pandemic to assist the sector in its efforts to support local communities and to support credit unions experiencing challenges as a result of the pandemic. I spoke with the credit union representative bodies, including ILCU, by conference call on 23 March 2020 to discuss the challenges and emerging issues facing the credit union sector as a result of the COVID-19 crisis. I welcomed the ongoing work of the credit union sector to support members in difficulties due to COVID-19 and acknowledged the health and safety risk front line staff are facing every day to ensure continuity of services to members.

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Following this call, I issued a press statement (Minister's Press Statement on Credit Union Sector) noting the vital work the credit union sector is carrying out, which will build on the government’s call for solidarity and community spirit which is synonymous with credit unions. In addition to the above, my officials have arranged weekly calls with the credit union representative bodies and weekly engagement sessions with the Registry of Credit Unions in the Central Bank to review any emerging issues in the sector resulting from the pandemic, and to ensure smooth information flow between the sector and Government. The Credit Union Advisory Committee (CUAC) is also available to advise me, as Minister for Finance, on credit union matters, if required.

Topic – Bank Transaction Fees FIN/COVID/346/20 by Richard Boyd Barrett T.D. To ask the Minister for Finance if he will liaise with Ulster Bank to ensure that they do not increase

their in-branch transaction fees from 20cents to 80 Cents as they are proposing, on 18 April, this

move will disproportionately affect older people and those that do not use online facilities and to

make a statement on the matter

In the intervening period since the Deputy posed his question, Ulster Bank has announced that it will not be proceeding with the proposed increase to the transaction fee for payments and transfers carried out in a branch. I welcome this decision along with the similar decisions made by other banks not to proceed with planned increases in their fees and charges during this public health emergency. I would also like to take this opportunity to make the Deputy aware that the five retail banks (AIB, Bank of Ireland, KBC, Permanent TSB, and Ulster Bank) have all set up dedicated phone lines to assist elderly and vulnerable customers who are cocooning during the current crisis. Further information on these services are also available on the website of the Banking and Payments Federation of Ireland at https://www.bpfi.ie/key-topics/vulnerable-customers-covid-19-support-faqs/.

Topic – Gross National Debt FIN/COVID/412/20 by Michael McGrath T.D. To ask the Minister for Finance what the anticipated Gross National Debt (in monetary and

percentage terms) will be by the end of the year, the anticipated change from previous estimates

as a consequence of the COVID-19 outbreak and if he will make a statement on the matter.

As the Deputy may be aware, projections of National Debt are not published. General government debt, of which gross national debt is the main component, is a more comprehensive measure of consolidated debt. On the expenditure side, the Government has implemented significant support measures as a result of the COVID-19 pandemic. Combined with a fall in tax revenues there will be a large fiscal deficit this year and, as a result, additional borrowing will be required. Further details on this will be outlined in the Stability Programme Update (SPU) which is due to be published later this month.

https://www.bpfi.ie/key-topics/vulnerable-customers-covid-19-support-faqs/

https://www.bpfi.ie/key-topics/vulnerable-customers-covid-19-support-faqs/

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Topic – National Debt FIN/COVID/413/20 by Michael McGrath T.D. To ask the Minister for Finance the amount of the National Debt in monetary terms that needs to

be refinanced or redeemed in 2020, the options the NTMA has in terms of dealing with this amid

the COVID-19 outbreak and if he will make a statement on the matter.

I am informed by the National Treasury Management Agency (NTMA) that approximately €19 billion of medium/long-term debt matures in 2020. This comprises two Government bonds and four tranches of the UK bilateral loan. The first bond matures this month, with an outstanding balance of €10.6 billion. The second matures in October and has an outstanding balance of €6.5 billion. The first of the four tranches of the UK bilateral loan was repaid in February, the second is due this month with the remaining two due later in the year. Each tranche is £0.4 billion. At end-March, the Exchequer had cash balances of over €22 billion, so this month’s maturities are already funded. The NTMA raised another €6 billion in the bond markets on 7 April, its largest benchmark bond issue in over a decade, so it is in a strong position with regard to meeting the remaining redemptions this year. Ireland is well placed to increase its borrowing activity arising from the economic disruption relating to the COVID-19 pandemic. This additional borrowing will take place against a backdrop of a strong improvement in Ireland’s debt position in recent years, which has been reflected in a solid trend of lower borrowing costs, strong demand for Irish sovereign debt among international investors over a protracted period and ratings upgrades by each of the major credit rating agencies. The recent successful sale of €6 billion of Irish Government debt is evidence of this. Additionally, the commencement of the European Central Bank’s €750 billion Pandemic Emergency Purchase Programme (PEPP) is a supportive backdrop for sovereign issuance.

Topic – Mortgages and Loans FIN/COVID/425/20 by Michael McGrath T.D. To ask the Minister for Finance in his engagement with the banking industry in response to the

COVID-19 outbreak whether he has discussed how loan and mortgage holidays will be

implemented, whether interest will continue to be charged on these loans, whether the option is

available for people to extend the life of the loan thus stabilising their monthly repayments once

the holiday period has elapsed and if he will make a statement on the matter.

On 18 March last I met with Banking and Payments Federation Ireland (BPFI) and the CEOs of the five main retail banks and following that meeting the banks outlined a coordinated approach to supporting their personal and business customers who have been impacted by the Covid-19 crisis. A number of important measures were outlined for impacted borrowers including payment breaks of up to three months for mortgages and other loans. The following day, the BPFI confirmed that the main credit servicing firms and non-bank mortgage lenders would also support the Covid-19 related range of measures adopted by the main retail banks.

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Banking and Payments Federation Ireland (BPFI) subsequently indicated that payment breaks, depending on what best suits an individual borrower’s particular situation, can include:-




Topic – Mortgages and Loans FIN/COVID/426/20 by Michael McGrath T.D. To ask the Minister for Finance in his engagement with the banking industry in response to the

COVID-19 outbreak whether he has discussed mortgage approval periods, whether he has asked

the industry to extend the mortgage approval periods in order to account for the COVID-19 crisis,

whether he will ask the industry in this respect and if he will make a statement on the matter.

FIN/COVID/433/20 by Michael McGrath T.D. To ask the Minister for Finance if he will ensure that mortgage approvals by the retail banks are

extended at least for the duration of the shutdown in construction as a result of the Covid-19

pandemic and if he will make a statement on the matter.

There are certain legal and regulatory requirements governing the provision of residential mortgage credit to consumers. These include a requirement on lenders to collect appropriate and relevant information from the borrower for the purposes of assessing an application for mortgage credit, and then a requirement that mortgage credit should only be provided to consumers where the creditworthiness assessment indicates that the borrower’s obligations are likely to be met in the manner required under the proposed credit agreement. Within that framework, it is then a matter for individual lenders to manage their own processes for the various mortgage application, consideration, approval and granting stages. Lenders are aware that many of their customers have been impacted by the current Covid-19 crisis and I have been informed that they have supports in place to assist customers across a range of areas, including in relation to the mortgage provision process, and that they will continue to

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bring as much flexibility as possible to assist Covid-19 impacted customers. For new borrowers whose income may have changed during the mortgage provision process, I am informed that lenders may have to carry out further reviews and assessments with the applicants. However, if a prospective mortgage borrower is concerned about any aspect of the mortgage offer they have already obtained from a lender, including in relation to the duration of the mortgage offer or other possible Covid-19 impacts such as in relation to income, they should directly contact their lender (or if applicable their mortgage broker) in the first instance to discuss the particular matter. It should also be noted that in relation to any Covid-19 related matter, or indeed in relation to any other issue which arises between a consumer and a lender, that the general consumer protection framework available to consumers will apply. This framework places a number of obligations on all regulated lenders including the obligation to act honestly, fairly, transparently and professionally, taking account of the rights and interests of the consumer, at all stages of the mortgage process and including when granting mortgage credit.

Topic – Mortgages and Loans FIN/COVID/458/20 by Michael Collins T.D. There are huge problems with Mortgages in this country and many families feel they are being

squeezed by the banks at this time due to the insistence that banks are stating that those who are

unable to pay over the next 3 months will have their mortgage repayments increased rather than

added to the lifetime of the Mortgage, most people are just able to make their repayments in

normal times so to expect them to make higher repayments after the three months seems

incredible.

On 18 March last I met with Banking and Payments Federation Ireland (BPFI) and the CEOs of the five main retail banks and following that meeting the banks outlined a coordinated approach to supporting their personal and business customers who have been impacted by the Covid-19 crisis. A number of important measures were outlined for impacted borrowers including payment breaks of up to three months for mortgages and other loans. The following day, BPFI confirmed that the main credit servicing firms and non-bank mortgage lenders would also support the Covid-19 related range of measures adopted by the main retail banks.

BPFI has indicated that payment breaks, depending on what best suits an individual borrower’s particular situation, can include:-



However, it will also be essential that lenders fully explain the implications, including any associated cost or other significant impacts, of the particular payment break measures being put in place. For instance, lenders should outline if the repayment term of the mortgage will be extended due to the payment break, if monthly payments will increase following the resumption of the mortgage repayments, if interest will continue to accrue during the payment break and the implications this will have for the total cost of the credit, and any other significant matter for the customer when availing of a Covid-19 payment break, or indeed for any other reason. I understand that the Central Bank of Ireland is liaising with BPFI in this regard.

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More generally, it should also be noted that the Central Bank of Ireland has emphasised that the broad provisions of the existing consumer protection framework applies and that, when dealing with their customers who have been impacted by Covid-19, it expects all regulated firms, including banks, retail credit and credit servicing firms, to take a consumer-focused approach and to act in their customers’ best interests.

Topic – Mortgages and Loans FIN/COVID/664/20 by Johnny Mythen T.D. To ask the Minister for Finance what correspondence has the Minister had with the Banking and

Payments Federation regarding the application of interest accrued over the 3 month deferral

period or additional interest on mortgage loans by banks and non-banks whereby the mortgage-

holder has availed of a three month mortgage break as a result of COVID-19

FIN/COVID/665/20 by Johnny Mythen T.D. To ask the Minister for Finance what correspondence has the Minister had with any of the five

retail banks regarding the application of interest accrued over the 3 month deferral period or

additional interest on mortgage loans by banks and non-banks whereby the mortgage-holder has

availed of a three month mortgage break as a result of COVID-19

FIN/COVID/666/20 by Johnny Mythen T.D. To ask the Minister for Finance what correspondence has the Minister had with the Central Bank

regarding the application of accrued interest over the 3 month deferral period or additional

interest on mortgage loans by banks and non-banks whereby the mortgage-holder has availed of a

three month mortgage break as a result of COVID-19

On 18 March last I met with Banking and Payments Federation Ireland (BPFI) and the CEOs of the five main retail banks and following that meeting the banks outlined a coordinated approach to supporting their personal and business customers who have been impacted by the Covid-19 crisis. A number of important measures were outlined for impacted borrowers including payment breaks of up to three months for mortgages and other loans. The following day, the BPFI confirmed that the main credit servicing firms and non-bank mortgage lenders would also support the Covid-19 related range of measures adopted by the main retail banks. BPFI has indicated that payment breaks, depending on what best suits an individual borrower’s particular situation, can include:- • a ‘full moratorium’ payment break where the full loan repayment amount, including both interest and principal repayment amounts, is postponed for an agreed period of time; • an ‘interest only’ payment for an agreed period where only the interest falling due will be paid during the break period and that any principal payments which were also falling due can be deferred; consequently the loan balance will not reduce (or increase) during the break period. However, it will also be essential that lenders fully explain the implications, including any associated cost or other significant impacts, of the particular payment break measures being put in place. For instance, lenders should outline if the repayment term of the mortgage will be extended due to the payment break, if monthly payments will increase following the resumption of the mortgage repayments, if interest will continue to accrue during the payment break and the implications this will have for the total cost of the credit, and any other significant matter for the customer when availing of a Covid-19 payment break, or indeed for any other reason. I understand that the Central Bank of Ireland is liaising with the BPFI in this regard.

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There is ongoing engagement and contacts between my officials and the Central Bank, the BPFI and the retail banks on a wide range of issues, in particular at this difficult time on the impact of Covid-19 on both borrowers and lenders, and this will continue.

Topic – Mortgages and Loans FIN/COVID/667/20 by Johnny Mythen T.D. To ask the Minister for Finance what correspondence has the Minister had with AIB regarding the

application of additional interest on mortgage loans whereby the mortgage-holder has availed of

a three month mortgage break as a result of COVID-19

On 18 March last I met with Banking and Payments Federation Ireland (BPFI) and the CEOs of the five main retail banks and following that meeting the banks outlined a coordinated approach to supporting their personal and business customers who have been impacted by the Covid-19 crisis. A number of important measures were outlined for impacted borrowers including payment breaks of up to three months for mortgages and other loans. The following day, the BPFI confirmed that the main credit servicing firms and non-bank mortgage lenders would also support the Covid-19 related range of measures adopted by the main retail banks. BPFI has indicated that payment breaks, depending on what best suits an individual borrower’s particular situation, can include:- • a ‘full moratorium’ payment break where the full loan repayment amount, including both interest and principal repayment amounts, is postponed for an agreed period of time; • an ‘interest only’ payment for an agreed period where only the interest falling due will be paid during the break period and that any principal payments which were also falling due can be deferred; consequently the loan balance will not reduce (or increase) during the break period. However, it is essential that lenders fully explain the implications, including any associated cost or other significant impacts, of the particular payment break measures being put in place. For instance, lenders should outline if the repayment term of the mortgage will be extended due to the payment break, if monthly payments will increase following the resumption of the mortgage repayments, if interest will continue to accrue during the payment break and the implications this will have for the total cost of the credit, and any other significant matter for the customer when availing of a Covid-19 payment break, or indeed for any other reason. I understand that the Central Bank of Ireland is liaising with the BPFI in this regard. I have not had correspondence with AIB in relation to the application of interest on mortgage loans. There is, however, ongoing engagement and contacts between my officials and the Central Bank, the BPFI and the retail banks on a wide range of issues, in particular at this difficult time on the impact of Covid-19 on both borrowers and lenders, and this will continue.

Topic – Mortgages and Loans FIN/COVID/696/20 by Brendan Smith T.D. To ask the Minister for Finance if mortgage/loan terms will be extended where mortgage

moratoriums are approved, if this criteria will be applicable to all financial institutions and if he

will make a statement on the matter.

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On 18 March last I met with Banking and Payments Federation Ireland (BPFI) and the CEOs of the five main retail banks and following that meeting the banks outlined a coordinated approach to supporting their personal and business customers who have been impacted by the Covid-19 crisis. A number of important measures were outlined for impacted borrowers including payment breaks of up to three months for mortgages and other loans. The following day, the BPFI confirmed that the main credit servicing firms and non-bank mortgage lenders would also support the Covid-19 related range of measures adopted by the main retail banks. BPFI has indicated that payment breaks, depending on what best suits an individual borrower’s particular situation, can include:- • a ‘full moratorium’ payment break where the full loan repayment amount, including both interest and principal repayment amounts, is postponed for an agreed period of time; • an ‘interest only’ payment for an agreed period where only the interest falling due will be paid during the break period and that any principal payments which were also falling due can be deferred; consequently the loan balance will not reduce (or increase) during the break period. However, it will also be essential that lenders fully explain the implications, including any associated cost or other significant impacts, of the particular payment break measures being put in place. For instance, lenders should outline if the repayment term of the mortgage will be extended due to the payment break, if monthly payments will increase following the resumption of the mortgage repayments, if interest will continue to accrue during the payment break and the implications this will have for the total cost of the credit, and any other significant matter for the customer when availing of a Covid-19 payment break, or indeed for any other reason. I understand that the Central Bank of Ireland is liaising with the BPFI in this regard.

Topic – Mortgages and Loans FIN/COVID/730/20 by Jennifer Whitmore T.D. To ask the Minister for Finance, if he is aware of the financial difficulties facing mortgage holders

where banks have agreed to defer monthly mortgage payments on condition that interest rates

will charged over the existing term instead of at the end of the loan term; if he is aware of the

financial challenges this will bring to some homeowners when their monthly instalments increase

in a few months; what measures the Government has been taking to encourage banks to be

flexible and to work with customers to find out the best arrangement possible for them; and if he

will make a statement on the matter.

I am aware of the difficulties faced by many mortgage holders at this difficult time and as the Deputy may be aware, on 18 March last I met with Banking and Payments Federation Ireland (BPFI) and the CEOs of the five main retail banks. Following that meeting the banks outlined a coordinated approach to supporting their personal and business customers who have been impacted by the Covid-19 crisis. A number of important measures were outlined for impacted borrowers including payment breaks of up to three months for mortgages and other loans. The following day, the BPFI confirmed that the main credit servicing firms and non-bank mortgage lenders would also support the Covid-19 related range of measures adopted by the main retail banks. BPFI has indicated that payment breaks, depending on what best suits an individual borrower’s particular situation, can include:- • a ‘full moratorium’ payment break where the full loan repayment amount, including both interest and principal repayment amounts, is postponed for an agreed period of time; • an ‘interest only’ payment for an agreed period where only the interest falling due will be paid during the break period and that any principal payments which were also falling due can be deferred; consequently the loan balance will not reduce (or increase) during the break period.

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Topic – Mortgages and Loans FIN/COVID/668/20 by Johnny Mythen T.D. To ask the Minister for Finance what correspondence has the Minister had with AIB regarding their

refusal to offer full 3 month mortgage breaks for mortgage holders who are in mortgage arrears

but have lost income as a result of COVID-19

As the Deputy may be aware, the BPFI announced on 13 April that over 45,000 mortgage payment breaks have now been granted or are close to completion since the cross-bank initiative was introduced. I have not had correspondence with AIB in relation to the matter of some customers who are in mortgage arrears not being granted payment breaks. It is for each financial institution to examine a customer’s individual circumstances to make sure the appropriate solution is put in place. In some cases this will be the 3 month mortgage break but perhaps if the account is already in arrears, the Central Bank’s statutory Code of Conduct on Mortgage Arrears and its Mortgage Arrears Resolution Process, more commonly known as the MARP, may be more appropriate. If the financial institution has deemed that the 3 month payment break is not appropriate and that the MARP is more appropriate, the Code of Conduct on Mortgage Arrears (CCMA) outlines very clear steps that have to be taken. The overriding objective of the CCMA is to ensure the fair and transparent treatment of consumers in mortgage arrears or pre-arrears, and that due regard is had to the fact that each case of mortgage arrears is unique and needs to be considered on its own merits. The CCMA recognises that it is in the interests of borrowers and regulated firms to address financial difficulties as speedily, effectively and sympathetically as circumstances allow. It sets out a four-step process that regulated entities must follow. The Central Bank has emphasised that the provisions of the existing consumer protection framework, which is designed to ensure that consumers’ best interests are protected, particularly in times of financial difficulties, are in place. People who may be experiencing particular vulnerabilities, as a result of the impact of COVID-19, for example, illness or loss of income, must be provided with whatever reasonable arrangements and/or assistance may be necessary in dealings with regulated entities.

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If the consumer is not happy with the way their financial institution is dealing with them, they can make a complaint to them and if they are not satisfied with the response received from them, the customer has the option to bring a complaint to the independent Financial Services and Pensions Ombudsman.

Topic – Mortgages and Loans FIN/COVID/610/20 by Roderic O’Gorman T.D. To ask the Minister for Finance, if he is aware that some mortgage providers are not allowing a

mortgage payment break to customers, who have been in short term difficulty with their

mortgage, in particular I include details of a specific case (details supplied) who have had difficulty

in obtaining a mortgage break for three months, and can he make a statement on the matter.

While I cannot comment on individual cases, the Deputy should be aware that Start Mortgages is a member of the Banking and Payments Federation of Ireland (BPFI) and so is included in the measures announced by the BPFI on 19 March 2020. These measures include flexible arrangements, including a payment break for mortgages and other loans. Customers affected by COVID-19 must contact their bank to discuss the flexibility available to them, including the possibility of a payment break of up to 3 months.

However, it is for each financial institution to examine a customer’s individual circumstances to make sure the appropriate solution is put in place. In some cases this will be the 3 month mortgage break but perhaps if the account is already in arrears, the Central Bank’s statutory Code of Conduct on Mortgage Arrears, the CCMA’s, Mortgage Arrears Resolution Process, more commonly known as the MARP may be more appropriate.

If the financial institution has deemed that the 3 month payment break is not appropriate and that the MARP is more appropriate, the CCMA outlines very clear steps that have to be taken. The overriding objective of the CCMA is to ensure the fair and transparent treatment of consumers in mortgage arrears or pre-arrears, and that due regard is had to the fact that each case of mortgage arrears is unique and needs to be considered on its own merits.

The CCMA recognises that it is in the interests of borrowers and regulated firms to address financial difficulties as speedily, effectively and sympathetically as circumstances allow. It sets out a four-step process that regulated entities must follow.

The Central Bank has emphasised that the provisions of the existing consumer protection framework, which is designed to ensure that consumers’ best interests are protected, particularly in times of financial difficulties, are in place. People who may be experiencing particular vulnerabilities, as a result of the impact of COVID-19, for example, illness or loss of income, must be provided with whatever reasonable arrangements and/or assistance may be necessary in dealings with regulated entities.

If the consumer is not happy with the way their financial institution is dealing with them, they can make a complaint to them and if they are not satisfied with the response received from them, the customer has the option to bring a complaint to the independent Financial Services and Pensions Ombudsman. They can be contacted on (01) 567 7000.

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Topic – Mortgages and Loans FIN/COVID/197/20 by Darragh O'Brien T.D. To ask the Minister for Finance to ensure that the option to lengthen a mortgage term is made

available to mortgage holders who avail of the emergency mortgage moratorium due to the

COVID-19 crisis; and if he willing to make a statement on the matter

On 18 March last I met with Banking and Payments Federation Ireland (BPFI) and the CEOs of the five main retail banks and following that meeting the banks outlined a coordinated approach to supporting their personal and business customers who have been impacted by the Covid-19 crisis. A number of important measures were outlined for impacted borrowers including payment breaks of up to three months for mortgages and other loans.

BPFI has indicated that payment breaks, depending on what best suits an individual borrower’s particular situation, can include:-



However, it will also be essential that lenders fully explain the implications, including any associated cost or other significant impacts, of the particular payment break measures being put in place. For instance, lenders should outline if the repayment term of the mortgage will be extended due to the payment break, if monthly payments will increase following the resumption of the mortgage repayments, if interest will continue to accrue during the payment break and the implications this will have for the total cost of the credit, and any other significant matter for the customer when availing of a Covid-19 payment break, or indeed for any other reason. I understand that the Central Bank of Ireland is liaising with the BPFI in this regard. More generally, it should also be noted that the Central Bank of Ireland has emphasised that the broad provisions of the existing consumer protection framework applies and that, when dealing with their customers who have been impacted by Covid-19, it expects all regulated firms to take a consumer-focused approach and to act in their customers’ best interests. End.

Topic – Wage Subsidy Scheme FIN/COVID/415/20 by Michael McGrath T.D. To ask the Minister for Finance to confirm whether the COVID-19 Wage Subsidy Scheme is

available to PAYE employees over 66 years of age, to confirm there are any restrictions in this

regard and if he will make a statement on the matter

I can confirm that there is no age restriction for employees to be eligible under the Temporary Wage Subsidy Scheme.

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Guidance on the operation of the Temporary Wages Subsidy Scheme is available on the Revenue Commissioners’ website at www.revenue.ie. The answer to question 3.1 addresses this issue.

Topic – Tax Residence and Domicile FIN/COVID/594/20 by Gerald Nash T.D. To ask the Minister for Finance the total number of individuals or couples recognised as “non-

domiciled” for tax purposes whose tax residence position may be affected by force majeure

circumstances relating to COVID-19; and if he will make a statement on the matter.

I am informed by Revenue that an individual’s tax residence and domicile position are two separate issues.

An individual’s liability to Irish income tax is determined by reference to the source of his or her income and his or her Irish tax residence, ordinary residence and domicile status for a particular year. An individual’s tax residence status is determined by reference to his or her presence in the State during a particular tax year. For example, an individual will be considered tax resident in the State if they are present for:

183 days or more in a tax year; or

280 days or more in a tax year and the preceding tax year when taken together, with a minimum of 30 days in each year.

Once an individual has been tax resident in the State for three tax years, he or she will also be considered ordinarily resident from the fourth year. Once ordinarily resident, an individual retains his or her ordinarily resident status until or unless he or she is non-Irish resident for three consecutive tax years. Domicile is not defined in the Taxes Consolidation Act 1997. Domicile is therefore a legal concept. Every person must have a domicile and a person can only have one domicile at any particular time. An individual is born with a domicile of origin, usually the domicile of his or her father. However, it is possible for an individual to acquire a domicile of choice but this appears to be outside of the current question raised.

A person’s tax residence status is based on a statutory test (i.e. his or her presence in the State) and is different to his or her domicile position, which is a concept of general law.

An Irish resident and domiciled individual is taxable on his or her worldwide income. Generally, non-residents are only taxable in respect of income from Irish sources. However, individuals who are not resident but who are ordinarily resident may also be liable to Irish income tax in respect of certain non-Irish sources. This is subject to any relief being provided by the terms of a relevant Double Taxation Agreement.

An Irish resident but not domiciled individual is liable to Irish income tax on his or her Irish source income and foreign income to the extent that it is remitted.

http://www.revenue.ie/

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An individual who is not resident but is ordinarily resident and not domiciled in the State will be liable to Irish tax on his or her Irish income and foreign income to the extent it is remitted. Income from an employment, all the duties of which are performed outside the State is not liable to Irish income tax, even if remitted. An individual who is not resident, and not ordinarily resident, is liable to Irish income tax on his or her Irish source income only. This applies regardless of his or her domicile status. A domicile levy may apply to an Irish domiciled individual where certain conditions are satisfied. Further information on domicile and the domicile levy can be found on Revenue’s website – available at the following link: https://www.revenue.ie/en/jobs-and-pensions/tax-residence/what-is-domicile-and-the-domicile-levy.aspx Existing Revenue guidance states that where an individual is prevented from leaving the State on his or her intended day of departure due to extraordinary natural occurrences or an exceptional third party failure or action – none of which could reasonably have been foreseen and avoided – the individual will not be regarded as being present in the State for tax residence purposes for the day after the intended day of departure provided the individual is unavoidably present in the State on that day due only to ‘force majeure’ circumstances. Revenue’s interpretation of “force majeure” has been updated to consider those cases who as a result of COVID-19 have had a departure from the State restricted directly as a result of the emergency situation. In any case where a taxpayer relies upon “force majeure”, it will be necessary for him or her to be able to appropriately support this position (i.e. information/documentation in relation to how a departure from the state has been prevented due to restrictions in place). Therefore, where an individual is prevented in departing the State as a result of COVID-19, his or her domicile position will remain unchanged. As it is not yet known how long these restrictions arising as a result of COVID-19 will continue, and in turn how this impacts each individual case it is not possible to determine whether the additional time spent in the State will have materially affected an individual’s Irish tax residence position. For example, a relatively short period of additional days spent in the State is unlikely to result in a non-resident individual being considered tax resident for a particular year. As mentioned above, a non-resident individual may continue to have a liability to Irish income tax to the extent they have Irish source income. This is subject to the provisions of any relevant Double Taxation Agreement. It is therefore also not possible to estimate the number of potential cases at this stage. The guidance on “force majeure” is included on the COVID-19 section of Revenue’s website – available at the following link: https://www.revenue.ie/en/corporate/communications/covid19/compliance-with-certain-reporting-and-filing-obligations.aspx

Topic – Tax Deferrals FIN/COVID/399/20 by Michael McGrath T.D.

https://www.revenue.ie/en/jobs-and-pensions/tax-residence/what-is-domicile-and-the-domicile-levy.aspx

https://www.revenue.ie/en/jobs-and-pensions/tax-residence/what-is-domicile-and-the-domicile-levy.aspx



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To ask the Minister for Finance the number of companies and individuals who have availed of tax

deferrals as a result of the COVID-19 outbreak, the amounts deferred by each tax heading and if he

will make a statement on the matter

The Deputy will be aware that Revenue has announced a series of key actions to assist taxpayers and businesses experiencing cash flow and trading difficulties arising from the impact of COVID-19. These include the suspension of all debt enforcement action until further notice, maintaining tax clearance status for all businesses over the coming months and prioritising the processing of tax repayments and refunds. Revenue has also suspended the charging of interest on late payments in respect of January/February and March/April VAT liabilities as well as February, March and April PAYE (Employers) liabilities for small and medium enterprises (SMEs). Revenue is assisting businesses other than SMEs who are experiencing temporary cash flow or trading difficulties through direct engagement. This includes larger businesses managed by its Large Corporates Division (LCD) and Medium Enterprise Division (MED). Over 27,400 businesses, who had made payments earlier in 2020, did not pay their January/February VAT, which fell due for payment in March. This has contributed to a shortfall of €1,105 million (-51%) against a target of €2,185m. All other tax heads remained relatively stable for March with PAYE recording an increase of €71m (6%) over target. However, the situation is expected to deteriorate for the April figures when the full impact of COVID-19 will be more apparent. Revenue will report on these figures in early May.

Topic – Business Interest Charges FIN/COVID/828/20 by Éamon Ó Cuív T.D. To ask the Minister for Finance, Public Expenditure and Reform whether it is intended to ask the

commercial banks to suspend interest charges on commercial businesses forced to close because

of the mandatory shut down of certain businesses by Government order due to the Covid-19

pandemic; and if he will make a statement on the matter.

As the Deputy may be aware, interest rates charged by lenders for their loans are commercial matters for individual lenders having regard to cost and competitive considerations. Neither I, as Minister for Finance, nor the Central Bank of Ireland have the power to prescribe the lending, or indeed deposit rates, charged or paid by banks or other lenders. However, I appreciate that this serious public health issue is also giving rise to significant economic problems for many businesses. I along with my Ministerial colleagues have announced a number of important actions to help people who are directly impacted. After I held a meeting with the Banking and Payments Federation Ireland (BPFI) and the CEOs of the 5 main banks on the 18th March, they announced a number of important measures for their SME bank customers. This includes that payment breaks, depending on what best suits an individual borrower’s particular situation, can include a ‘full moratorium’ payment break where the full loan repayment amount, including both interest and principal repayment amounts, is postponed for an agreed period of time. The payment break can also comprise of an ‘interest only’ payment for an agreed period where only the interest falling due will be paid during the break period and that any principal payments which were also falling due can be deferred; consequently the loan balance will not reduce (or increase) during the break period.

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These are important measures provide cash flow benefits for many business and personal borrowers who need support at this difficult time. Furthermore, it remains an option for individual lenders to consider and apply any further actions they consider appropriate having regard to the difficult circumstances arising for any of their customers at this time. I understand that the Central Bank of Ireland is liaising with the BPFI to ensure that lenders fully explain the implications, including any associated cost or other significant impacts, of the particular payment break measures being put in place to support COVID-19 impacted businesses.

Topic – Tax Deferrals FIN/COVID/804/20 by Robert Troy T.D. Give an overview of all tax payment deferrals/holidays introduced being considered by his

Department and Revenue for the rest of the year for affected businesses.

In general, all taxes and duties payable to the Exchequer are placed under the care and management of the Revenue Commissioners. Thus, the assessment, collection and enforcement of tax and duties set out in law are matters for Revenue. Section 101 of the Ministers and Secretaries (Amendment) Act 2011 placed on a statutory basis the long established and long accepted independence of the Revenue Commissioners. In essence, the Revenue Commissioners are independent in the performance of all their functions under or for the purposes of tax and duties laws. Revenue responded promptly and positively to difficulties faced by taxpayers in meeting their tax and duty compliance obligations arising from the COVID 19 emergency. In the case of Small and Medium Enterprises, Revenue announced that those businesses experiencing temporary cash flow difficulties should continue to send in tax returns on time. However, the application of interest on late payments was suspended for January/February and March/April VAT and February, March and April PAYE (Employers) liabilities. All debt enforcement activity is suspended until further notice and current tax clearance status remains in place for all businesses over the coming months. Businesses, other than SMEs, who are experiencing temporary cash flow or trading difficulties should contact the Collector-General’s office on (01) 7383663. Alternatively, these businesses can engage directly with their branch contacts in Revenue’s Large Corporates Division or Medium Enterprises Division. Revenue continues to closely monitor the evolving situation regarding COVID-19 and will issue further updated guidance for businesses when required and particularly in good time for future returns as they fall due. In the case of subcontractors for Relevant Contracts Tax (RCT) purposes, the RCT rate review scheduled to take place in March 2020 was suspended. This process assesses the current compliance position of each subcontractor in the e-RCT system and determines the appropriate RCT deduction rate, i.e. 0%, 20% or 35%. As this process may result in a subcontractor’s RCT rate increasing due to changes in their compliance position, the review was suspended. Subcontractors and agents are reminded that RCT rate reviews can be self-managed in ROS (the Revenue Online System). Subcontractors can check if their rate should be lower and can then ‘self-review’ to get that lower deduction rate.

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On the Customs side, critical pharmaceutical products and medicines are given a Customs ‘green routing’ to facilitate uninterrupted importation and supply. Regarding Local Property Tax (LPT), Revenue announced that for property owners who opted to pay their 2020 liabilities by Annual Debit Instruction or Single Debit Authority payment, the deduction date was extended from 21 March 2020 to 21 May 2020. The collection of stamp duty on credit cards has been deferred until 1 July 2020. Generally, financial institutions collect the stamp duty from credit card accounts on 1 April each year. The stamp duty due on credit cards is €30 per year per credit card account. Revenue has exercised its care and management function under Section 849 TCA 1997 to suspend the requirement on the HSE to deduct PSWT on payments (which would subsequently be fully refunded) to private hospitals thereby improving the hospitals’ cash flow position. Revenue has also put administrative arrangements in place to implement the European Commission’s decision to temporarily suspend customs duties and VAT on the import of personal protection equipment (PPE) from non-EU countries to ensure medical staff and people at risk of COVID-19 have the equipment vitally needed to fight the pandemic. All these are positive actions taken by Revenue to assist taxpayers facing payment and other tax and duty related compliance challenges in the current challenging circumstances. I am aware that Revenue is keeping the matter under regular review as will keep taxpayers and businesses informed of decisions in this area.

Topic – Wage Subsidy Scheme FIN/COVID/417/20 by Michael McGrath T.D. To ask the Minister for Finance the rationale for inserting into legislation the provision that

companies availing of the COVID-19 Wage Subsidy Scheme shall be published online and if he will

make a statement on the matter

Section 28(8) of the Emergency Measures in the Public Interest (Covid-19) Act 2020 provides that the names and addresses of all employers to whom a temporary wage subsidy has been paid by the Revenue Commissioners shall be published on the website of the Revenue Commissioners. It is not unusual that details of businesses who are in receipt of such grant assistance from public funds would be made public. Employers on the published list will be those who have retained employees on payroll when they would not otherwise have been in a position to do so and are to be praised for this. The fact that they have suffered as a result of the Covid-19 crisis will not make them exceptional. Companies that emerge from the crisis will have shown themselves to be capable of responding successfully to the difficulties faced and the Temporary Wage Subsidy Scheme will have played a positive part in their survival.

Topic – Receivership FIN/COVID/859/20 by Marian Harkin T.D.

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To ask the Minister for Finance if there are any protections under the COVID-19 Emergency

Legislation for a person, in a situation where a bank has appointed a Receiver in relation to their

property. Details supplied (This case has been ongoing for some time and would be finalised with

further negotiations, however, this property was put on the market overnight by a Receiver

appointed auctioneer, due to the fact the person in question did not attend a recent meeting as a

result of the current COVID-19 restrictions.) Can the Minister make a statement on the matter?

I am sure that the Deputy appreciates that I cannot comment on individual cases. However, the Deputy should note that receivership and the conduct of receivers is governed by Part 8 of the Companies Act 2014, which is a matter for my colleague, the Minister for Business, Enterprise and Innovation.

Topic – Mortgages and Loans FIN/COVID/962/20 by Mairead Farrell T.D. To ask the Minister for Finance what measures he has taken to ensure payment moratoriums for

mortgages and business loans within Irish banks; if he believes that business loan re-payments due

after the ending of a moratorium should be pushed to the end of a loan's lifetime for businesses

that ceased to operate during the Covid-19 pandemic; and if he will make a statement on the

matter.

On the 18th March 2020 I met, and had a constructive meeting, with the Banking and Payments Federation Ireland (BPFI) and the CEOs of the five main banks. Subsequently, they introduced a range of supports for all of their customers, including mortgage holders and SMEs, affected by COVID 19. Supports available include payment breaks and the BPFI reported that on Monday 13th April close to 45,000 Mortgage payment breaks and 14,000 SME payment breaks have been granted, or are in the process of being granted. Each customer and their bank are advised to consider and discuss what best suits an individual’s particular situation. Supports can include a ‘full moratorium’ payment break where the full loan repayment amount, including both interest and principal repayment amounts, is postponed for an agreed period of time. Alternatively, it may suit some customers to avail of an ‘interest only’ payment for an agreed period where only the interest falling due will be paid during the break period and that any principal payments which were also falling due can be deferred; consequently the loan balance will not reduce (or increase) during the break period. It is open to individual lenders to consider and apply any further actions they consider appropriate having regard to the difficult circumstances arising for any of their customers at this time. I understand that the Central Bank of Ireland is liaising with the BPFI to ensure that lenders fully explain the implications, including any associated cost or other significant impacts, of the particular payment break measures being put in place to support COVID-19 impacted businesses. These implications should cover if the repayment term of the loan will be extended due to the payment break, if monthly payments will increase following the resumption of the loan repayments, if interest will continue to accrue during the payment break and the impact this will have for the total cost of the credit, and any other significant matter for the customer when availing of a Covid-19 payment break, or indeed for any other reason.

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Topic – Moneylenders FIN/COVID/339/20 by Carol Nolan T.D. To ask the Minister for Finance if he will engage with licensed moneylenders with a view to

encouraging a reduction on annual percentage rates for those on medium to low levels of income

for the duration of the covid-19 emergency and if he will make a statement on the matter

FIN/COVID/ 968 /20 by Pauline Tully T.D. To ask the Minister for Finance if his attention has been drawn to the concerns raised by the Social

Finance Foundation that licensed high interest money lenders are aggressively targeting vulnerable

persons whose financial circumstances may have been impacted by the Covid-19 crisis; his views on

the concerns; if measures are being taken to protect persons from lending companies that charge

187% APR; and his plans to introduce a cap on companies that charge excessively high interest rates

as is the case in 21 of the 27 EU countries.

I propose to take Query Nos. 339/20 and 968/20 together. First of all, I would expect that all moneylenders would behave responsibly and respect the public health measures, including the social distancing measures, which have been put in place by the Government. Moneylenders should seek to implement alternative repayment methods, if possible, during this time. The Central Bank of Ireland (Central Bank) is responsible for the licensing and supervision of licensed moneylenders under the provisions of the Consumer Credit Act, 1995 (CCA). I am advised by the Central Bank that that there is a strong framework of protection in place for consumers who choose to avail of the services of licensed moneylenders. In addition, the provisions of the European Communities (Consumer Credit Agreements) Regulations, 2010 (the CCR) set out certain additional requirements in relation to advertising and the content of relevant documentation (contractual and pre-contractual) to accompany certain credit agreements including moneylending agreements. The Central Bank’s Consumer Protection Code for Licensed Moneylenders (ML Code) also applies to licensed moneylenders engaged in the business of moneylending. Regulation 7 of the CCR sets out that where an advertisement contains a reference to an interest rate or any figure relating to the cost of credit to the consumer that other standard information shall be included in a clear, concise and prominent way by means of a representative example. As set out in the ML Code, licensed moneylenders are required to act honestly, fairly and professionally in the best interests of the consumer and the integrity of the market. The ML Code also requires all advertisements to be fair and not misleading. At all times advertising must be in the best interests of consumers and compliant with Codes and Regulations. Licensed moneylenders are also required to undertake a creditworthiness assessment before entering into a moneylending agreement with a consumer. The Central Bank has previously highlighted its expectation to all credit providers, including licensed moneylenders that they lend responsibly and act in the best interests of consumers. Given the potentially increased vulnerability of the consumer base who typically engage with licensed moneylenders and the high cost nature of moneylending loans, the Central Bank expects licensed moneylenders to conduct their activities in a manner which reflects a culture of

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responsibility at all times. The Central Bank actively communicates to moneylenders in this regard. Licensed moneylenders have an obligation to act honestly, fairly and professionally in the best interests of consumers and to comply with the ML Code and other regulatory requirements. The national measures introduced to combat the COVID-19 virus have been introduced in the public interest and the Central Bank expects that the licensed moneylending sector will play its part in protecting its consumers during this extraordinary time. I am informed by the Central Bank that the licensed moneylending sector typically shows forbearance to consumers in financial difficulties and this should continue in the context of the COVID-19 situation. All licensed moneylenders need to be sensitive to changes in consumers’ circumstances due to the public health measures taken to counter the spread of the COVID-19 virus and the Central Bank expects licensed moneylenders to take a consumer focused approach and to provide reasonable arrangements and/or assistance to support their consumers at this difficult time. People experiencing financial difficulties should explore all the options available to them before applying for a loan. The Money Advice and Budgeting Service (MABS) is available to anyone experiencing problems with budgeting and debt. Furthermore, Government has introduced a range of supports to help people where their employment or salary has been impacted by COVID-19, including the Pandemic Unemployment Payment and the Temporary COVID-19 Wage Subsidy Scheme. These measures should also assist those in difficulty and hopefully negate the need to borrow, particularly at high interest rates. Finally, the issue of moneylender interest rates is currently being examined by the Department of Finance. The Department undertook a public consultation in 2019 seeking views on capping the cost of licensed moneylenders and other regulatory matters in relation to moneylending. Analysis of the submissions received during the consultation is being used in framing of policy proposals that will be completed by my Department shortly.

Topic – Economic Impact FIN/COVID/288/20 by Stephen Donnelly T.D. To ask the Minister if he has asked for an analysis or estimate of the economic cost of each week of

COVID-19 related restrictions, if he has to detail those costs, and if he will make a statement on the

matter.

FIN/COVID/410/20 by Michael McGrath T.D. To ask the Minister for Finance when will new economic projections be published updated with the

impact of the COVID-19 outbreak, what the Department of Finance's estimates of the General

Government Balance, Debt to GDP, Debt to GNI*, GDP, GNI*, unemployment for 2020 and if he will

make a statement on the matter.

FIN/COVID/411/20 by Michael McGrath T.D. To ask the Minister for Finance what the current Exchequer Borrowing Requirement is for the year,

how much it has increased since the outbreak of COVID-19, whether the proceeds from NAMA have

or will be used as part of the Exchequer Borrowing Requirement and if he will make a statement on

the matter

I propose to take Questions, 288, 410 and 411 together.

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The Covid-19 pandemic will impact significantly on the public finances, with expenditure increasing significantly while, at the same time, tax revenues are set to decline sharply over the coming months. Tax revenues to end-March ended the quarter below target by €788 million, or 5.7%, albeit slightly ahead year-on-year by €138 million as a strong performance in the first two months of the year compensated for a sharp decline in March. That fall was due to, in the first instance, forbearance measures designed to provide cash-flow support to firms (mainly deferred VAT payments). The 20 per cent year-on-year decline in receipts during March is expected to accelerate over the second quarter; moreover, the downward trajectory will also become more broad-based with other taxation components adversely affected. On the expenditure side, the Government has put in place significant resources to expand healthcare provision. In addition, Government is providing income and liquidity supports households and firms in order to cushion the impact of containment measures. We are currently forecasting to spend somewhere between €4 to €4 ½ billion over a 12 week period supporting those individuals worst hit by the crisis through the Pandemic Unemployment Payment and the Wage Subsidy Scheme. All told, the measures on the revenue and expenditure side will have a very large impact on the headline budget position and public indebtedness is set to increase significantly. Thanks to appropriate budgetary policy over recent years, we meet this challenge from a position of strength – a budget surplus, cash reserves and the establishment of the Rainy Day Fund. Moreover, the impact of the crisis on the public finances is likely to be temporary; gradual economic recovery once the containment measures are lifted should ensure some improvement in the budgetary position. Having said that, the crisis will likely leave some deficit in its wake, as well as an overhang of public debt. The Government will publish its annual Stability Programme Update next week, setting out revised economic and fiscal forecasts for this year and next.

Topic – Hospitality Sector VAT FIN/COVID/599/20 by Michael HealyRae T.D. Covid-19 has had an unprecedented effect on our hospitality sector, especially in counties like Kerry.

I am asking are you considering reducing the 13.5% VAT rate to 9% for this sector even as a

temporary emergency measure. Many business in this sector will be lucky if they can afford to

reopen due to the loss of our tourist season for 2020. I would ask you please look at this measure

The Government is fully aware of the unprecedented impact that the coronavirus is having on business and people’s livelihoods. In this regard a range of measures have been introduced to provide income support to those who need it while also giving confidence to employers to retain the link with employees so that when this crisis passes - and it will pass – our people can get back to work as quickly and seamlessly as possible. In addition to current support measures, my officials are examining a range of possible measures to ensure that the economy is in a position to recover rapidly while maintaining a stable tax base.

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I would draw the Deputy’s attention to the Government supports for COVID-19 impacted businesses which are available at the following link: https://dbei.gov.ie/en/What-We-Do/Supports-for-SMEs/COVID-19-supports/Government-supports-to-COVID-19-impacted-businesses.html

Topic – Hospitality Sector VAT FIN/COVID/777/20 by Rose Conway Walsh T.D. To ask the Minister if she can revert the VAT rate to 9% on the hospitality sector on a temporary

basis to be review at a later date

The Government is fully aware of the unprecedented impact that the coronavirus is having on business and people’s livelihoods. In this regard a range of measures have been introduced to provide income support to those who need it while also giving confidence to employers to retain the link with employees so that when this crisis passes - and it will pass – our people can get back to work as quickly and seamlessly as possible. In addition to current support measures, my officials are examining a range of possible measures to ensure that the economy is in a position to recover rapidly while maintaining a stable tax base.

Topic – VAT on Health Products FIN/COVID/685/20 by Cian O'Callaghan T.D. Can VAT be temporarily eliminated or reduced on the following items?

a) hand sanitizers

b) vitamins (Vitamin D has been shown to boost immunity against respiratory illness and with the

restrictions some people may not be getting out in the sunshine as much.)

c) thermometers

I am advised by Revenue that the VAT rating of goods and services is subject to EU VAT law, with which Irish VAT law must comply. In accordance with the Directive, hand sanitizers and thermometers are liable to VAT at the standard rate, currently 23%. Annex III of the Directive specifies categories of goods and services, in respect of which Member States may apply a reduced rate of VAT, and food supplement products, including vitamins, are liable to VAT in Ireland at the reduced rate, currently 13.5%. Human oral medicines that are licenced by the Health Products Regulatory Agency (HPRA) are liable at the zero rate of VAT. Certain folic acid and other vitamin and mineral products, including Vitamin D, if licenced by the Health Products Regulatory Association, are considered medicines and as such are zero rated for VAT purposes. The EU Commission has indicated that notwithstanding the VAT Directive, Member States may apply flexibility on a temporary basis in relation to the rate of VAT applied to certain supplies specifically connected to the current crisis. On the basis of this advice, I made a request to the Chairman of Revenue on the 9th April to implement, on an administrative basis, the application of the zero rate of VAT to personal protection equipment, ventilators and oxygen as necessary to combat COVID-19 when supplied to hospitals, nursing homes, GP practices and the like, for use in

https://dbei.gov.ie/en/What-We-Do/Supports-for-SMEs/COVID-19-supports/Government-supports-to-COVID-19-impacted-businesses.html


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the delivery of COVID-19 related health care services to their patients. Revenue agreed to administer such a relief and will publish guidelines shortly. The supply of hand sanitizers and thermometers to such bodies has been added to this list. It is envisaged that this concessional treatment will apply up to 31 July 2020, subject to review. A list of other measures to support individuals and businesses impacted by COVID-19 can be found at https://www.gov.ie/en/organisation/department-of-finance/

Topic – Business Disruption Insurance FIN/COVID/457/20 by Michael Collins T.D. Business who have Business Interruption cover in their insurance policies and are impacted by the

current covid 19 outbreak could be forgiven for thinking they could justifiably claim. There has been

a growing number of complaints from different businesses, restaurants, pubs and hospitality trades

that their insurers are unwilling to pay out. Is there justification for the insurers stance ? Many

businesses are closed throughout the country, can insurance companies by urged to side-line their

charges until they reopen

FIN/COVID/691/20 by Seán Fleming T.D. Can you please ask the Department of Finance to clarify in relation to business Insurance Policies

which are regulated by the Central Bank and contain business disruption clauses, can claims be

made for business disruption by the private ambulance providers who are deemed to be an essential

service but have suffered a massive reduction in their business as a result of the COVID-19 Crisis.

I am taking questions 457 and 691 together. I am aware that there have been many concerns expressed about how the insurance industry is responding to the needs of its business policyholders in these difficult times, in terms of honouring business interruption claims and also with regard to whether forbearance and other flexible measures are being offered to them. It should be noted that whether a business, including private ambulance providers, can make a claim in relation to loss of earnings because of closure due to COVID-19 will depend on the specifics of their individual policy. While business interruption is generally a feature of standard business insurance policies, it is understood that many of those policies do not include cover specifically for infectious diseases, as that this would have been an optional extra. If this is the case, then no claim is possible as the risk has not been underwritten. In the case where infectious diseases are covered, there are other considerations which insurers will take account of. There appear to be three broad approaches as to how this risk is underwritten:

(i) As a notifiable disease with a general description (with perhaps some specified exclusions) on the premises.

(ii) As a notifiable disease with a general description (with perhaps some specified exclusions) on the premises and within a specified radius of the premises.

(iii) A list of specific infectious diseases is outlined in the policy document. As COVID-19 would not have been specified in any existing policies, then businesses are not covered for an outbreak in their premises with this type of policy.

The terms and conditions for the policies written by insurance companies will vary and also depend on how insurers price the risk underlying those policies. As the Deputies will be aware, I cannot

https://www.gov.ie/en/organisation/department-of-finance/

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direct or require that insurers cover claims resulting from infectious diseases such as COVID-19. However, the Deputies should note that I and my officials have been engaging with the insurance industry through Insurance Ireland in an effort to get some much needed certainty for business policyholders. On business interruption claims, I wrote to Insurance Ireland on the 27th of March and indicated amongst other things the following:

(i) insurers should not attempt to reject claims on the basis of interpreting policies to their own advantage.

(ii) that where a claim can be made because a business has closed, as a result of a Government direction due to contagious or infectious disease, that the recent Government advice to close a business in the context of COVID-19 should be treated as a direction.

Insurance Ireland, on behalf of its membership, responded on the 3rd of April and stated that it accepted both of my points. It did however indicate that each insurance policy is different and there may well be other factors which lead to the adjudication of whether a business interruption claim is valid or not, other than Government advice to close. Whilst I strongly believe that insurers should treat their customers honestly, fairly and professionally and honour those elements of the policies covered including business interruption claims in line with the Central Bank’s Consumer Protection Code, it is important to note that neither the Government nor the Central Bank have any role in adjudicating on such matters. If there continues to be a disagreement between an insurer and a policyholder, then the appropriate channels for resolving them must be followed i.e. use of the Financial Services and Pensions Ombudsman or litigation. In addition, the Deputies should be aware that the Central Bank wrote to and met with the CEOs of the main non-life companies in Ireland. The key messages that the Bank conveyed are as follows:

• Insurers must put forward consumer-focussed solutions on policy payment breaks, rebates and claims.

• While most insurance policies are clear, if there is a doubt about the meaning of a term, the interpretation most favourable to the consumer should prevail.

• The Central Bank expects the CEOs of Irish authorised firms to take responsibility for the oversight of how their firm is managing determinations of whether claims are covered or not in the context of COVID-19.

The Central Bank is continuing to engage with the non-life insurance industry on these matters. I believe it is also important to draw the Deputies’ attention to the supports that the Government has made available to try and alleviate the pressure on businesses as a result of the COVID-19 crisis. These measures can be found at: https://dbei.gov.ie/en/What-We-Do/Supports-for-SMEs/COVID-19-supports/Government-supports-to-COVID-19-impacted-businesses.html Notwithstanding these supports, I will continue to insist that insurers pay business interruption claims where this is covered under the policy. However, neither I nor the Central Bank can direct them to do so. My officials will monitor the implementation of the above mentioned agreement with insurers and will have a good insight into how it is being applied through their regular interaction with the Alliance for Insurance Reform. You should also note that I am giving consideration to meeting Insurance Ireland on the matters outlined above.

Topic – Temporary Wage Subsidy Scheme



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FIN/COVID/278/20 by Paul Murphy T.D. Will the Minister for Finance increase the maximum allowed for workers on the ‘wage subsidy

scheme’, who previously had net income in excess of €586 per week, but not more than €960 per

week, to €410, so that they are not discriminated against, relative to workers who had a net weekly

income of €586 per week or less?

FIN/COVID/017/20 by Darragh O'Brien T.D. To ask the Minister for Finance if he will consider removing the income limit set for the Temporary Wage Subsidy Scheme, which is set at €76,000, and if he will make a statement on the matter FIN/COVID/343/20 by Michael McGrath T.D. To ask the Minister for Finance if he has any plans to remove the €960 per week net earnings cap in

respect of eligibility for the Covid-19 temporary wage subsidy scheme; to explain the rationale

behind including this cap in the first instance; and if he will make a statement on the matter.

FIN/COVID/494/20 by Catherine Murphy T.D. If it is intended to make any changes to the wage subsidy scheme; if so will she outline those changes

and will she make a statement on the matter.

FIN/COVID/669/20 by Johnny Mythen T.D. To ask the Minister for Finance will the Minister clarify why, under the Temporary Wage Subsidy

Scheme, an employee who had formerly received a weekly net wage of more than €586 and less

than €960, will receive a maximum amount of €350

FIN/COVID/670/20 by Johnny Mythen T.D. To ask the Minister for Finance will the Minister clarify why, under the Temporary Wage Subsidy

Scheme, an employee who had formerly received a weekly net wage of more than €586 and less

than €960, will receive a maximum amount of €350

FIN/COVID/807/20 by Robert Troy T.D. Is their capacity to introduce an appeals process to the Temporary wage subsidy scheme. Has he

any intention to remove the current ceiling in place of €76,000.

FIN/COVID/808/20 by Robert Troy T.D. Would he acknowledge that in some instances that employees are availing of the pandemic

payment as it seen as more advantageous than the Temporary wage subsidy scheme and will he

review this.

I propose answering questions 278/20, 017/20, 343/20, 494/20, 669/20, 670/20, 807/20 and 808/20 together. On 15 April 2020, I announced some further changes to the Temporary Wage Subsidy Scheme which apply to those earning less than €500 per week (approx. €31,000) as well as those earning in excess of €586 per week (€38,000). For those employees with previous average net pay up to €412 per week (equivalent to almost €24,400) the subsidy will be increased from 70% to 85% of their previous net weekly pay. For those employees with previous average net pay between €412 and €500 per week (equivalent to €24,400-€31,000), the subsidy will be up to a maximum of €350 per week.

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In addition, where an employer wishes to pay a greater level of top-up (in respect of employees with net pay up to €412 per week) in order to bring the employee’s pay to €350 per week then tapering would not be applied to the subsidy. These changes mean that there more employees will now receive a subsidy of €350 per week, and those with previous net pay below €412 per week will now receive a greater level of subsidy. For employees with previous net pay in excess of €586 per week (equivalent to €38,000), a tiered approach will apply. The maximum subsidy payable for these remains €350 per week. The tiered approach takes into account both the amount paid by the employer and the level of reduction in pay borne by that employee as follows:

Gross Amount paid by Employer Subsidy Up to 60% of employee’s previous average net weekly pay

Up to €350 per week

Between 60% and 80% of employee’s previous average net weekly pay

Up to €205 per week

Over 80% of employee’s previous average net weekly pay No subsidy payable

Tapering of the subsidy will apply to all cases where the Gross pay paid by the employer and the subsidy exceed the previous average net weekly pay. This is calculated by subtracting the amount paid by the employer from the previous average net weekly pay. This is to ensure that no employee would be better off under the scheme. I have also determined that the wage subsidy is now available to support employees where the average gross pre-Covid salary was greater than €76,000, and their gross post-Covid salary has fallen below €76,000. The tiered arrangement applicable to gross incomes in excess of €38,000 will apply in such circumstances. Therefore, if an employee was earning over €76,000 gross and has now been reduced to below €960 gross a week, and their reduction is more than 20% then a subsidy of up to €205 would be payable and if the reduction was more than 40% a subsidy of up to €350 would be payable. To calculate the level of subsidy payable, current gross pay will be compared with previous average net weekly pay for January/February. This subsidy will be tapered so as to ensure that the total net income (employer contribution + wage subsidy) does not exceed €960 net per week. The tiered arrangements and the cap ensure that the resources are targeted at those most in need and where income reductions have been deepest. I would acknowledge that the increased rate applicable to the Pandemic Unemployment Payment (PUP) administered by DEASP has led to a situation whereby those on lower wages, especially those with more than one dependent may now be better off on DEASP payments, including the weekly €350 DEASP PUP. However, it should be noted PUP may not be claimed if a person chooses to leave employment at this time, but rather when they are laid off. The objective of the TWSS is to maintain the link between the employer and employee, affording the employee the security of a job during and after the crisis, as well as enabling the business to help employers scale back up their business after the scheme has ended. There is no appeals process in place and I have no plans to introduce such a process. The scheme is an emergency measure of limited duration introduced to deal with the impact of the Covid-19 pandemic on the economy. It builds on data returned to Revenue through the PAYE system. It cannot be tailored to meet every individual set of circumstances for either employers or employees.

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The core principles are that the business is suffering significant negative economic impact due to the pandemic and that the employees were on the payroll at 29 February 2020 and the employer had fulfilled its PAYE reporting obligations for February before 15 March. The subsidy is calculated based on the net pay reported for January and February 2020. The most recent changes mean that more employees will now receive a subsidy of €350 per week, and those earning below €412 per week will now receive a greater level of subsidy. Furthermore those with pre-Covid salaries of greater than €76,000 and who have suffered reductions of at least 20% may now avail of the scheme.

Topic – Business Insurance FIN/COVID/802/20 by Robert Troy T.D. Has he met with Insurance Ireland and insurance companies operating in Ireland to impress upon

them how unfair struggling businesses are finding it with regard to certain insurers refusing to pay

out compensation to businesses with Business Interruption and Infectious Disease cover, while some

are also refusing to defer premiums or cancel policies during the COVID crisis period. Can he give an

overview of such meetings and commitments indicated

FIN/COVID/803/20 by Robert Troy T.D. Has he held meetings with and impressed upon Insurance Ireland and insurance companies

operating in Ireland the necessity for all insurers to state publicly if they are accepting the Central

Bank of Ireland’s direction on compensating businesses with disruption cover for infectious diseases

a. Can he give an overview of such meetings and commitments indicated.

I will take questions 802 and 803 together. I am aware that there have been many concerns expressed about how the insurance industry is responding to the needs of its business policyholders in these difficult times, in terms of honouring business interruption claims and also with regard to whether forbearance and other flexible measures are being offered to them. The Deputy should note that I and my officials have been engaging with the insurance industry through Insurance Ireland in an effort to get some much needed certainty for business policyholders. On business interruption claims, I wrote to Insurance Ireland on the 27th of March and indicated amongst other things the following:



Insurance Ireland, on behalf of its membership, responded on the 3rd of April and stated that it accepted both of my points. It did however indicate that each insurance policy is different and there may well be other factors which lead to the adjudication of whether a business interruption claim is valid or not, other than Government advice to close.

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Whilst I strongly believe that insurers should treat their customers honestly, fairly and professionally and honour those elements of the policies covered including business interruption claims in line with the Central Bank’s Consumer Protection Code, it is important to note that neither the Government nor the Central Bank have any role in adjudicating on such matters. If there continues to be a disagreement between an insurer and a policyholder, then the appropriate channels for resolving them must be followed i.e. use of the Financial Services and Pensions Ombudsman or litigation. The Deputy should also note that the Central Bank wrote to and met with the CEOs of the main non-life companies in Ireland. The key messages that the Bank conveyed are as follows:

Insurers must put forward consumer-focussed solutions on policy payment breaks, rebates and claims.

While most insurance policies are clear, if there is a doubt about the meaning of a term, the interpretation most favourable to the consumer should prevail.

The Central Bank expects the CEOs of Irish authorised firms to take responsibility for the oversight of how their firm is managing determinations of whether claims are covered or not in the context of COVID-19.

The Central Bank is continuing to engage with the non-life insurance industry on these matters.

In relation to the general issue of forbearance, in my letter of 27th of March I also requested that Insurance Ireland press its members to provide some reliefs to their customers to alleviate the pressures brought on as a result of the current situation. I subsequently requested my Department to engage with Insurance Ireland on the need for insurers to have a common approach on how they are supporting their business customers in this difficult time. The outcome of this engagement is an agreement that I announced on the 10th of April whereby most of the key insurers in the Irish market - namely Allianz, AIG, AXA, FBD, Liberty Insurance, RSA, Travelers Insurance and Zurich - will apply the following common measures which will be available to their business customers: Forbearance

• Insurers will reduce premiums for business customers to reflect reduced level of exposure as a result of COVID-19 restrictions for Employer Liability/ Public Liability and Commercial Motor.

• Insurers will allow up to 28 days after renewal for payment. Business Premises

• Insurers will maintain cover for unoccupied commercial buildings/ premises not in use due to COVID-19 restriction (for a maximum of 90 days). Appropriate supervision and security of the premises is required.

• Insurers will support requests for a change of property use during the crisis.

In conclusion, I will continue to insist that insurers pay business interruption claims where this is covered under the policy. However neither I nor the Central Bank can direct them to do so. My officials will monitor the implementation of the above mentioned agreement with insurers and will have a good insight into how it is being applied through their regular interaction with the Alliance for Insurance Reform. You should also note that I am giving consideration to meeting Insurance Ireland on the matters outlined above.

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Topic – Travel Insurance FIN/COVID/742/20 by Jennifer Whitmore T.D. To ask the Minister for Finance, if there are plans for the Department to issue guidelines to insurance

companies in dealing with customers whose flights and/or holidays that may be cancelled in the

coming months; if clarification can be provided with regards to customers’ entitlements with regards

to compensation in the event of a cancellation of a flight and/or holiday booking; and if he will make

a statement on the matter.

At the outset, I would like to say that as Minister for Finance, I am responsible for the development of the legal framework governing financial regulation, and the Central Bank of Ireland is responsible for supervision of insurance companies. In terms of travellers’ entitlements with regard to cancellations of flights or holiday bookings, I understand that these entitlements are set out in various EU regulations, such as the Flight Compensation Regulation, which fall under the remit of the Minister for Transport, Tourism and Sport. I am however aware that a large number of people with travel plans have been impacted by the pandemic and may have had to cancel their travel, particularly in February and March, when the pandemic began to emerge in Europe. I understand that those with travel insurance may have had issues in relation to being able to make claims where they took a decision not to travel prior to the Government announcements and updated travel advice from the Department of Foreign Affairs and Trade (DFAT). However, I understand that the position is now much clearer as a result of the aforementioned updated DFAT travel advice. Indeed, Insurance Ireland, on their website, have advised that insurers are being guided by the travel advice as published by DFAT. They advise customers to check their policy documents as the scope of policy cover varies. This can be done by reviewing a travel insurance policy’s accompanying Insurance Product Information Document (IPID). They also advise that some policies provide cover for non-refundable cancellation costs where there is a government directive prohibiting travel. Others operate if the policyholder has purchased an optional travel disruption extension, and DFAT state that they advise against all but essential travel. The Deputy will appreciate that the ability of an individual to make a claim against their travel insurance will ultimately depend on the specifics of their policy. This applies in general and the emergence of COVID-19 should not change this. The terms and conditions for the policies written by insurance companies will vary and also depend on how insurers price the risk underlying those policies. As Minister for Finance, I do not have the power to direct or require that insurers cover claims resulting from COVID-19. With regard to issuing guidelines to insurance companies, I believe that in my engagements to date with insurers, I have made my views well known. My expectations are that insurers must engage with consumers honestly, fairly and professionally to honour those elements of the policies covered, in line with the Central Bank’s Consumer Protection Code. I would note that the Central Bank, in its role, also set out its expectations of insurers in dealing with customer’s claims, which I believe is relevant in this instance also. Insurers have accepted that they must play a role in getting the country through this crisis and I, along with my officials will continue press the case for insurers to deal with businesses and consumers through this crisis in a fair and reasonable manner in all aspects, including in relation to travel insurance.

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Topic – Insurance FIN/COVID/422/20 by Michael McGrath T.D. To ask the Minister for Finance whether he has consulted with the insurance industry and Insurance

Ireland in relation to its response to COVID-19, whether he has discussed mechanisms for premium

relief and holidays for SMEs and if he will make a statement on the matter

FIN/COVID/673/20 by Johnny Mythen T.D. To ask the Minister for Finance what correspondence has the Minister had with the Central Bank

and Insurance Ireland regarding insurers refusal to accept indemnity for business interruption where

the business has closed in accordance with public health advice to mitigate the spread of COVID-19

FIN/COVID/694/20 by Michael McGrath T.D. To ask the Minister for Finance to outline the engagement he has had with the insurance industry in

relation to its response to the Covid-19 pandemic, in particular relating to payouts for business

interruption cover, and relief for businesses who are not operating at this time in relation to their

premium; and if he will make a statement on the matter

FIN/COVID/838/20 by Brendan Smith T.D. To ask the Minister for Finance if he will engage with the insurance sector in relation to concerns

about business interruption insurance and the Covid-19 Pandemic in view of widespread concerns

on this issue and if he will make a statement on the matter.

I am taking questions 422, 673, 694, and 838 together. I am aware that there have been many concerns expressed about how the insurance industry is responding to the needs of its business policyholders in these difficult times, in terms of honouring business interruption claims and also with regard to whether forbearance and other flexible measures are being offered to them. The Deputies should note that I and my officials have been engaging with the insurance industry through Insurance Ireland in an effort to get some much needed certainty for business policyholders. On business interruption claims, I wrote to Insurance Ireland on the 27th of March and indicated amongst other things the following:



Insurance Ireland, on behalf of its membership, responded on the 3rd of April and stated that it accepted both of my points. It did however indicate that each insurance policy is different and there may well be other factors which lead to the adjudication of whether a business interruption claim is valid or not, other than Government advice to close. Whilst I strongly believe that insurers should treat their customers honestly, fairly and professionally and honour those elements of the policies covered including business interruption claims in line with the Central Bank’s Consumer Protection Code, it is important to note that neither the Government nor the Central Bank have any role in adjudicating on such matters. If there continues to be a disagreement between an insurer and a policyholder, then the appropriate

33

channels for resolving them must be followed i.e. use of the Financial Services and Pensions Ombudsman or litigation. In my letter, I also requested that Insurance Ireland press its members to provide some reliefs to their customers to alleviate the pressures brought on as a result of the current situation. I subsequently requested my Department to engage with Insurance Ireland on the need for insurers to have a common approach on how they are supporting their business customers in this difficult time. The outcome of this engagement is an agreement that I announced on the 10th of April whereby most of the key insurers in the Irish market - namely Allianz, AIG, AXA, FBD, Liberty Insurance, RSA, Travelers Insurance and Zurich - will apply the following common measures which will be available to their business customers: Forbearance

• Insurers will reduce premiums for business customers to reflect reduced level of exposure as a result of COVID-19 restrictions for Employer Liability/ Public Liability and Commercial Motor.

• Insurers will allow up to 28 days after renewal for payment. Business Premises

• Insurers will maintain cover for unoccupied commercial buildings/ premises not in use due to COVID-19 restriction (for a maximum of 90 days). Appropriate supervision and security of the premises is required.

• Insurers will support requests for a change of property use during the crisis.

You should also note that my officials have been in regular touch with the Central Bank on these issues. In addition, you should be aware that the Central Bank wrote to and met with the CEOs of the main non-life companies in Ireland. The key messages that the Bank conveyed are as follows:

• Insurers must put forward consumer-focussed solutions on policy payment breaks, rebates and claims.



The Central Bank is continuing to engage with the non-life insurance industry on these matters. In conclusion, I will continue to insist that insurers pay business interruption claims where this is covered under the policy. However neither I nor the Central Bank can direct them to do so. My officials will monitor the implementation of the above mentioned agreement with insurers and will have a good insight into how it is being applied through their regular interaction with the Alliance for Insurance Reform. You should also note that I am giving consideration to meeting Insurance Ireland on the matters outlined above.

Topic – Insurance FIN/COVID/423/20 by Michael McGrath T.D.

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To ask the Minister for Finance the powers the Central Bank has to enforce its letter sent to the

insurance industry outlining how claims relating to COVID-19 must be dealt with, to outline how the

Central Bank is monitoring the situation from a consumer protection point of view and if he will

make a statement on the matter.

As the Deputy is aware, the Central Bank of Ireland wrote to the Chairs and CEOs of both life and general insurance firms on 27 March and met the non-life companies on 30 March by video-conference. The key messages that the Bank conveyed are as follows:

• Insurers must put forward consumer-focused solutions on policy payment breaks, rebates and claims.



The Central Bank has informed me that if insurance undertakings do not meet their expectations with regard to these matters it will, as appropriate and necessary, consider the use of its supervisory and/or enforcement powers. In considering the use of its powers, the Central Bank will have regard to all of its relevant insurance financial services, supervisory and consumer powers taking into account the specific relevant circumstances under consideration. They have outlined that it is not possible at this early stage to outline what exact powers would be utilised in the event of non-compliance. This will be determined on the basis of the relevant issues and the aim sought to be achieved by their use. Finally, I would like to assure the Deputy that my Department will continue to liaise with the Central Bank, as well as industry, on any consumer protection issues that arise.

Topic – Banking FIN/COVID/298/20 by Seán Haughey T.D. To ask the Minister for Finance and Public Expenditure and Reform if he will intervene with Allied

Irish Bank to get it to reverse the decision to suspend free banking from certain accounts given the

current covid-19 crisis; and if he will make a statement on the matter.

As the Deputy will be aware, I have engaged and will continue to engage extensively with the Banking and Payments Federation (BPFI) and the banks directly in relation to supports for personal and business customers affected by the COVID-19 crisis. Furthermore officials in my department are alert to issues raised directly by the public and these inform the department’s ongoing engagement process and policy formation. All the banks, AIB included, have continued to evolve and expand the supports they have available and I would expect that this process continues. AIB has introduced a wide variety of solutions designed to affect both personal and business customers affected by the COVID-19 crisis: these include mortgage breaks and a wide variety of cashflow supports for businesses. AIB also announced that it had suspended the introduction of a variety of maintenance and transaction fees including those related to contactless payments. However, as you will know, the Minister for Finance is precluded from mandating the removal of maintenance and transaction fees in any particular bank, even one in which the State has a

35

shareholding. Decisions in this regard are the sole responsibility of the board and management of the banks which must be run on an independent and commercial basis. The independence of banks in which the state has a shareholding is protected by Relationship Frameworks which are legally binding documents that cannot be changed unilaterally. These frameworks, which are publicly available, were insisted upon by the European Commission to protect competition in the Irish market.

Topic – Fees for Licensed Publicans

FIN/COVID/248/20 by Frank Feighan T.D. To ask the Minister for Finance if consideration is been given towards the removal of the fee for

publicans licenses for 2020 to ensure publicans can try and re-open with one less cost on their books.

The Government is fully aware of the unprecedented impact that the coronavirus is having on business and people’s livelihoods in the licensed pub trade. In this regard a range of measures have been introduced to provide income support to those who need it while also giving confidence to employers to retain the link with employees so that when this crisis passes - and it will pass – our people can get back to work as quickly and seamlessly as possible. In addition to current support measures, my officials are examining a range of possible further measures to ensure that the economy is in a position to recover rapidly while maintaining a stable tax base and where relevant supporting public health policies

Topic – Wage Subsidy Scheme FIN/COVID/418/20 by Michael McGrath T.D. To ask the Minister for Finance what supports if any are available for those employees earning over

€76,000 a week who do not qualify for the COVID-19 Wage Subsidy Scheme and if he will make a

statement on the matter

Income supports for employees who do not qualify for the Temporary Wage Subsidy Scheme are a matter for my colleague the Minister for Employment Affairs and Social Protection. However, I announced a number of changes to the Temporary Wage Subsidy Scheme on 15 April, including expanding its scope to support employees where their average gross pre-COVID-19 salary was greater than €76,000, and their gross post-COVID salary has fallen below €76,000. A tiered arrangement will apply in such circumstances. If an employee was earning over €76,000 gross and has now been reduced to below €960 net pay a week, and their reduction is more than 20% then a subsidy of up to €205 will be payable and if the reduction was more than 40% a subsidy of up to €350 will be payable. To calculate the level of subsidy payable, current gross pay will be compared with previous average net weekly pay for January/February. This subsidy will be tapered so as to ensure that the total net income (employer contribution plus wage subsidy) does not exceed €960 net per week. Comprehensive information on the operation of the Temporary Wage Subsidy Scheme is available on the Revenue website at:

36

https://www.revenue.ie/en/corporate/communications/covid19/temporary-covid-19-wage-

subsidy-scheme.aspx

Topic – Taxation of Pandemic Payments FIN/COVID/127/20 by Willie O’Dea T.D. To ask the Minister for Finance to outline if the Covid-19 Pandemic Unemployment Payment is

subject to tax and if she will make a statement on the matter.

FIN/COVID/SF015/20 by Maurice Quinlivan T.D. To ask the Minister for Finance if the Covid-19 Pandemic Unemployment Payment is subject to tax including USC whether you are employed or self-employed FIN/COVID/160/20 by Michael Moynihan T.D. Is the Covid 19 Pandemic Unemployment Payment a taxable payment? FIN/COVID/243/20 by Frank Feighan T.D. To ask the Minister for Finance to outline, if employees who are being paid by a combination of the wage subsidy scheme and a top up by employers will be faced with increases income tax liabilities later in 2020 as a result of the wage subsidy scheme. FIN/COVID/265/20 by Duncan Smyth T.D. Can you please inform me if the €350 covid payment is taxable and or repayable? FIN/COVID/288/20 by Paul Murphy T.D. To ask the Minister for Finance the tax implications for the employee of receiving payment as part of the “temporary Covid-19 wage subsidy scheme”? FIN/COVID/312/20 by Jennifer Murnane O’Connor T.D. To ask the Minister for Finance if he could make a statement regarding the tax liability of those workers who having been placed on the wage subsidy scheme due to the COVID-19 public health measures are currently exempt from tax but will face a tax liability later in the year or perhaps in a reduction in tax credits next year. While the liability may be negligible for low paid workers, it may be quite large for middle income earners and more for those singly assessed for tax. In times when things are uncertain and many households have lost at least one income asking workers to save thirty percent in the event of this liability is creating financial anxiety at a time when these workers are doing their best to continue to work in difficult circumstances. Workers need clarity on how their tax should be calculated given that they did not seek to underpay tax during this crisis? FIN/COVID/663/20 by Johnny Mythen T.D. To ask the Minister for Finance what if; any are the tax implications for persons receiving the Pandemic Unemployment Payment; and what these tax implications will look like for workers and employers under the wage supplement scheme both during the scheme and after they cease FIN/COVID/756/20 by Mattie McGrath T.D. To ask the Minister for Finance to clarify whether or not the PUP is taxable or will it become liable for tax at any point? FIN/COVID/965/20 by Johnny Mythen T.D.

https://www.revenue.ie/en/corporate/communications/covid19/temporary-covid-19-wage-subsidy-scheme.aspx

https://www.revenue.ie/en/corporate/communications/covid19/temporary-covid-19-wage-subsidy-scheme.aspx

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To ask the Minister for Finance if any are the tax implications for persons receiving the Pandemic

Unemployment Payment; and what these tax implications will look like for workers and employers

under the wage supplement scheme both during the scheme and after they cease

FIN/COVID/505/20 by Padraig O’ Sullivan T.D. To ask the Minister for Employment Affairs and Social Protection/ Minister for Finance if the Covid 19 pandemic unemployment payment is subject to tax and if further information/clarification can be provided.

I propose to take these questions together as they relate to the tax treatment of the COVID-19 Pandemic Unemployment Payment and the Wage Subsidy Scheme. Disbursements made under both the Pandemic Unemployment Payment (PUP) and the Temporary Wage Subsidy Scheme (TWSS) are in the nature of income supports and share the characteristics of income. On first principles, therefore, they are liable to income tax. Also, other income earners in receipt of comparable “normal wages” are taxable on those wages. In the interest of equity, the payments made under both schemes are therefore subject to income tax. In the case of the PUP, the position follows the general rule in relation to social welfare payments and are therefore also exempt from PRSI and the Universal Social Charge. This is the case for both former PAYE workers and those who were previously self-employed. [Tax will not be collected in real-time while the schemes are in operation. This is in keeping with the Government’s intention to get much needed financial support into the hands of affected workers as quickly as possible.] Instead, liability to tax will be determined by way of review at the end of the year. When an end of the year review takes place, it may be the case that an employee’s unused tax credits will cover any further liability that may arise. Additionally, if an individual has any additional tax relief to claim depending on their personal circumstances, for example for health expenses incurred, this will also reduce any tax that may be due. Where this is not the case, and should tax be due, it is normal Revenue practice to collect any tax owing in manageable amounts by reducing an individual’s tax credits for a future year or years in order to minimise any hardship. In the case of lower income individuals or households, the additional liability to tax, if any, arising from the payments is likely to be modest. I have been assured by Revenue that they will be adopting a fair and flexible approach to collecting tax due on these payments.

Topic – Moneylenders FIN/COVID/338/20 by Carol Nolan T.D. To ask the Minister for Finance what steps he is taking to ensure that people in vulnerable low-

income groups are protected from unlicensed moneylenders as a result of the economic challenges

presented by covid-19; and if he will make a statement on the matter

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The Government has introduced a range of measures to aid the income of people affected by the Covid 19 crisis, including the Wage Subsidy Scheme and the Covid 19 Pandemic Unemployment Payment scheme. These measures should mitigate the need for vulnerable people to consider accessing credit, particularly from unlicensed moneylenders. The Deputy should be aware that the investigation of people or firms carrying on the business of moneylending without a licence is an offence subject to investigation and prosecution by An Garda Síochána. Furthermore, the Central Bank has no power or regulatory role in respect of illegal moneylenders. However, the Central Bank is statutorily required to report any suspicions of illegal moneylending to An Garda Síochána and does so when it becomes aware of suspected cases of illegal moneylending. End.

Topic – Taxation Essential Workers FIN/COVID/027/20 by Sean Sherlock T.D. To ask the Minister for Finance if he will waive overtime tax payments for those essential workers

working overtime hours and still operating during the restrictions or will he instruct Revenue to

implement a tax-back scheme for these workers

FIN/COVID/753/20 by Mattie McGrath T.D. To ask the Minister for Finance what plans of any, he has to support and thank our front line staff who are risking their lives in the service of others. Will he consider a tax relief or bonus to show our appreciation of their efforts. FIN/COVID/964/20 by Thomas Gould T.D. To ask the Minister for Finance if his Department has examined any possible rewards for essential

staff defined in the Government released list in recognition of the vital work they are undertaking

for the people and the Country during the Coronavirus public health emergency

FIN/COVID/966/20 by Martin Kenny T.D. To ask the Minister for Finance if he will give consideration to the widening of tax bands for those

essential workers who, due to the Covid-19 pandemic, are working many hours of overtime and who,

when the current extraordinary circumstances are over, will be in a higher tax bracket than would

normally be appropriate to their wage level

I propose to answer questions 027, 753, 964 and 966 together. Ireland has a progressive income tax system which is structured such that the more income you have, the more tax you pay. As a person’s income increases they move up through the various rates and bands and, as a result, while the levels of take home pay increase overall, the amount of tax they pay also increases. Total income taxes paid account for around 40% of Ireland’s annual tax receipts and thereby make a significant contribution to cover the cost of the various Exchequer funded State services, many of which are experiencing extraneous pressures at this time on account of the crisis thrown up by the necessary response to the COVID-19 outbreak.

39

The Government greatly appreciates the additional efforts of essential workers, front line staff and all those working during this difficult time. They are making a key contribution to the State-wide response to the COVID-19 crisis. Rather than widening tax bands, waiving tax payments or introducing a tax relief for those who are working at this time, resources are being focused on new initiatives to support those who are no longer in employment or who will have reduced income in the coming weeks and months as well as measures seeking to support employers in retaining staff.

Topic – Temporary Wage Subsidy Scheme FIN/COVID/967/20 FIN/COVID/SF06/20 by Maurice Quinlivan T.D. To ask the Minister for Finance if he is aware the Income Support Scheme is confined to employees

who were on the employer’s payroll as at 29th February 2020, and for whom a payroll submission

has already been made to Revenue in the period from 1st February 2020 to 15th March 2020;

meaning anyone that TUPE transferred after March 29th is excluded and what he will do to address

this issue

FIN/COVID/149/20 by Mick Barry T.D. What audit measures are being put in place to ensure that those employers availing of Covid-19

Wage Subsidy Scheme are passing on the full value of the payment from the state to the employee;

if she is aware of the practice of employers using a worker’s accrued holiday pay to make up the

70%; and if she would make a statement on the matter.

FIN/COVID/234/20 by Frank Feighan T.D. To ask the Department of Finance, if a fail of margin of 25% instead of revenue is considered

acceptable in order to allow a business to access the COVID19 wage subsidy scheme.

Details supplied:

Thanks for the reply. I like so many welcome the Governments wage subsidy scheme. However, I have been asked the question re margin a number of times. As you know, margin pays costs not turnover. Can you ask if a fall of margin of over 25% will be considered as a reasonable reason to apply for the wage subsidy. FIN/COVID/347/20 by Joan Collins T.D. I received this query from a full time official in FORSA. To ask the Minister Is the only option for these workers the 350€ covid payment? FIN/COVID/355/20 by Michael Lowry T.D. The temporary Wage Subsidy Scheme will be available to employers who keep employees on the

payroll throughout the COVID-19 pandemic, meaning employers can retain links with employees for

when business picks up after the crisis. Currently the scheme is for a duration of 12 weeks to 30 June

However, Deputy Lowry was contacted by several companies with an enquiry on the Wage Subsidy

Scheme.

Can you confirm if it is possible to have employees on the Scheme for sporadic periods of time, i.e. if

a company were for various reasons were in a position to re-employ some of it workers who are on

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the Wage Subsidy Scheme for a short period of time, can these worker return back onto the Wage

Subsidy Scheme once this short period of work is finished.

FIN/COVID/406/20 by Michael McGrath T.D. To ask the Minister for Finance the number of employers and employees to date who have availed of the COVID-19 Wage Subsidy Scheme, the cost of the scheme to date, the expected total cost of the scheme and if he will make a statement on the matter FIN/COVID/407/20 by Michael McGrath T.D. To ask the Minister for Finance the number of employers and employees to date who have availed of the COVID-19 Employer Refund Scheme, the cost of the scheme to date, the expected total cost of the scheme and if he will make a statement on the matter. FIN/COVID/416/20 by Michael McGrath T.D. To ask the Minister for Finance to confirm whether self-employed persons are able to avail of the COVID-19 Wage Subsidy Scheme for themselves, to confirm whether or not such persons have to pay themselves through the PAYE system and if he will make a statement on the matter FIN/COVID/466/20 by Emer Higgins T.D. Can a new employee avail of the subsidy scheme? E.g a man handed in his notice before Covid, finished up with his old employer on Fri and his new employer has all his staff on the subsidy scheme but he wants to take him on and put him on the scheme, issue is this guy wasn’t on his last pay roll. Does he fall through the cracks for the subsidy scheme, can he apply for the Covid payment at least? FIN/COVID/504/20 by Padraig O’ Sullivan T.D. To ask the Minister for FInance if he is aware of reports that Aer Lingus are looking to use the 70% wage subsidy scheme on the already 50% reduced salary as opposed to the full salary as per scheme rules and if she can provide clarification in relation to same. FIN/COVID/588/20 by Gerald Nash T.D. To ask the Minister for Finance to outline the number and percentage of micro-enterprises, small enterprises, medium enterprises and large enterprises respectively that are availing of the Temporary Wage Subsidy Scheme (TWSS); and if he will make a statement on the matter FIN/COVID/589/20 by Gerald Nash T.D. To ask the Minister for Finance to provide a sectorial breakdown of companies availing of the Temporary Wage Subsidy Scheme (TWSS); and if he will make a statement on the matter FIN/COVID/590/20 by Gerald Nash T.D.

To ask the Minister for Finance to provide a sectorial breakdown of the number of employees

availing of the Temporary Wage Subsidy Scheme (TWSS); and if he will make a statement on the

matter.

FIN/COVID/591/20 by Gerald Nash T.D. To ask the Minister for Finance to provide a county-by-county breakdown of the number of companies availing of the Temporary Wage Subsidy Scheme; and if he will make a statement on the matter. FIN/COVID/592/20 by Gerald Nash T.D. To ask the Minister for Finance how many minimum wage employees are availing of the Temporary

Wage Subsidy Scheme (TWSS); and if he will make a statement on the matter.

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FIN/COVID/593/20 by Gerald Nash T.D. To ask the Minister for Finance to provide the average level of payments per employee under the Temporary Wage Subsidy Scheme (TWSS); and if he will make a statement on the matter FIN/COVID/635/20 by Cian O'Callaghan T.D. To ask the Minister for Finance, on average how long does it take Revenue to process the COVID-19 Wage Subsidy Scheme refund to companies; if the Minister has received complaints that delays in payments have increased the number of people being made unemployed; and will he make a statement on the matter? FIN/COVID/671/20 by Johnny Mythen T.D. To ask the Minister for Finance how many employers and how many employees have applied or qualified for the Temporary Wage Subsidy Scheme FIN/COVID/672/20 by Johnny Mythen T.D. To ask the Minister for Finance If the Minister will provide, in tabular form, the number of employees who have received subsidy payments under the Temporary Wage Subsidy Scheme, disaggregated by the quantum of weekly subsidy payment received, in intervals of €50 starting from €0 FIN/COVID/679/20 by Catherine Connolly T.D. To ask the Minister for Employment Affairs and Social Protection what measures are being taken to

monitor the situation whereby companies receive the Covid-19 payment from Government, but do

not pass it onto their staff; and if she will make a statement on the matter.

FIN/COVID/687/20 by Frank Feighan T.D. To ask the Minister for Finance, if a person with two employments and who is both a PAYE worker

and a Self Employed company director can claim assistance from the Wage Subsidy Scheme to cover

up to 70% of the loss of his/her wages and income from the company to which he/she is the director

which has closed temporarily due to COVID19.

FIN/COVID/704/20 by Roisin Shortall T.D. To ask the Minister for finance to clarify whether the Wage Subsidy Scheme permits employers to pay employees less than 70% of their salary when it equates to less than €410 per week? FIN/COVID/747/20 by Marc Ó Cathasaigh T.D. I have had contact with a worker who has been offered a monthly ‘top-up’ on their Temporary Wage Subsidy Scheme payment if they continue to work in the company concerned. Can you clarify whether a business must be closed in order to be eligible for the payment? FIN/COVID/805/20 by Robert Troy T.D. To give the number of businesses who have enrolled in the Temporary wage subsidy scheme to date,

broken down by firm size, the total number of workers that participating employers employee

FIN/COVID/806/20 by Robert Troy T.D. Are further measures being considered to simplify the application process for employers to the

Temporary wage subsidy scheme

FIN/COVID/809/20 by Robert Troy T.D. For business that inadvertently filed their February payroll submission returns after the deadline,

who previously had always submitted such returns on time, will he consider permitting such

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businesses to apply to the Temporary wage subsidy scheme as to date, such cases have not been

allowed to join this new scheme.

FIN/COVID/845/20 by Robert Troy T.D. To give the number of businesses who have enrolled in the Temporary wage subsidy scheme to date,

broken down by firm size, the total number of workers that participating employers employee

FIN/COVID/846/20 by Robert Troy T.D. Are further measures being considered to simplify the application process for employers to the

Temporary wage subsidy scheme

FIN/COVID/1028/20 by Brid Smith T.D. If employers are allowed to claim 50% of the net earnings in the wage subsidy scheme for their

employees while having their employees work part time?

FIN/COVID/1029/20 by Brid Smith T.D. If the financial position of employers, including profit levels in recent periods is taken into account

before permitting access to the wage subsidy scheme?

I propose to answer Questions 967/20 (SF06/20), 149/20, 234/20, 347/20, 355/20, 406/20, 407/20, 416/20, 427/20, 466/20, 504/20, 588/20, 589/20, 590/20, 591/20, 592/20, 593/20, 635/20, 671/20, 672/20, 679/20, 687/20, 704/20, 747/20, 805/20 806/20, 809/20, 845/20, 846/20, 1028/20, and 1029/20 together. These 29 questions relate to various aspects of the Temporary Wage Subsidy Scheme (TWSS), such as eligibility for the scheme at employer and employee levels, operational matters, oversight of compliance with the terms of the scheme, taxation of the wage subsidy at employee level and statistical data on the scheme. I propose taking the questions together for administrative convenience and to avoid repetition in answering, but I am also doing so as I think it is important to set out some general context relating to the scheme. General context The TWSS was legislated for in section 28 of the recently enacted Emergency Measures in the Public Interest (Covid-19) Act 2020. Deputies will be aware that the TWSS is an emergency measure to deal with the impact of the Covid-19 pandemic on the economy. Of necessity, the underlying legislation and the scheme itself have been developed very quickly, having regard to the overarching, urgent Government objective of getting much needed assistance to employers and employees, where businesses have been seriously affected by the pandemic and the necessary restrictions introduced to fight the spread of the Covid-19 virus. In general, businesses have been extremely complimentary of the speed with which the TWSS has been rolled out. While many jurisdictions have announced similar type wage subsidy schemes, few have had schemes up and running as quickly as, and in the manner, we have managed. Under our TWSS, the fact that the employment for which subsidies are payable does not have to cease is a very significant benefit, which will be especially important as restrictions are eased and businesses can resume and begin to increase output. The Revenue Commissioners and their staff must be commended for the work that has been done on the TWSS in an incredibly short timeframe. They have re-engineered their PAYE business processing system from its traditional role of collection to one where that system has been harnessed to provide much needed financial support to employers and employees throughout the country. As at 16 April 2020, some 44,200 employers had registered

43

for the TWSS and Revenue has paid out some €267 million in wage subsidy payments under the scheme with over 255,000 individual employees having received at least one payment. The administration of the TWSS has been legally placed under the care and management of the Revenue Commissioners in the same way as taxes and duties are under their care and management. Thus, the Commissioners are independent in their administration of the TWSS. They are operating, and I have no doubt will continue to operate, the scheme in the same fair, reasonable and transparent manner that they administer the taxes and duty system. The TWSS builds on data returned to Revenue through its real-time PAYE system. It must be accepted that the underlying legislation and the scheme itself simply cannot be tailored to meet every individual unique set of circumstances for either employers or employees. The core principles of the scheme are that –

• the business is suffering significant negative economic impact due to the pandemic, • the employees were on the payroll at 29 February 2020, and • the employer had fulfilled its PAYE reporting obligations for February 2020 by 15 March

2020.

The wage subsidy per employee is calculated based on the net pay reported for January and February 2020. The scheme does not distinguish between ordinary wages, shift allowances, overtime, bonuses or commission or between part-time or full-time employees. Moreover, the scheme has no role in relation to the employer/employee relationship in so far as terms and conditions of the employment are concerned. Eligibility criteria for employees and employers Question Nos 967/20 (SF 06/20), 234/20, 347/20, 416/20, 427/20, 466/20, 687/20, 809/20, 1028/20 and 1029/20 from Deputies Quinlivan, Feighan (2 questions), Collins, McGrath, Higgins, Troy and Smith (2 questions) relate to eligibility criteria for the TWSS. I am advised by Revenue that the TWSS can only operate in respect of an employee, whether full-time or part-time, who was on the payroll of the employer as at 29 February 2020. Thus, where an individual commenced a new employment after that date, he or she does not meet the eligibility criteria with the new employer as he or she would not have been on the employer’s payroll at that date. Additionally, where an employer has not met its statutory PAYE reporting obligations for February 2020 by 15 March 2020, the employer will not be eligible to participate in the Scheme. These are essential requirements of the TWSS and are necessary critical safeguards against abuse and exploitation of the scheme. Employees who have not been retained on the payroll and who have been temporarily laid-off are eligible for the Department of Employment Affairs and Social Protection (DEASP) Covid-19 Pandemic Unemployment Payment. Self-employed individuals can also qualify for the DEASP administered COVID-19 Pandemic Unemployment Payment scheme rather than through the Revenue administered TWSS, which is applicable to employees. In the case of company directors, if they are paid through the payroll system and are included in the relevant payroll submissions for an eligible employer, then they are eligible to receive the wage subsidy under the TWSS. Where an individual has a second employment, with both employers eligible for the scheme, each employer can operate the scheme based on 70% of employee’s net weekly earnings in the employment concerned. In the full operational phase of the scheme, which is expected to commence in early May, all such earnings will be combined and reconciled, and each employer will

44

be provided with an employer “maximum additional payment employer can make to receive full subsidy” to apply to the employee’s payroll. I and the Revenue Commissioners have received a number of representations concerning the TWSS and cases where the business or part of it has been transferred from one owner to another in accordance with the Transfer of Undertakings (Protection of Employment) Regulations, commonly known as the TUPE Regulations. Such transfers under the TUPE Regulations result in difficulties with eligibility of the employees concerned for the TWSS, because they may not have been on the payroll of the new business owner at 29 February 2020 and, of course, that owner would not have being paying wages to the employees in January or February 2020. As such, even leaving aside the legal question of eligibility for the scheme, the operation of the TWSS in such circumstances would be particularly difficult in practice, especially in the context of Revenue systems which automate the calculation of wage subsidies based on employee data for January and February as returned by the employer. However, the Revenue Commissioners are actively exploring whether it is feasible to include TUPE cases within the scheme and will be advising the employers concerned as soon as possible. A key eligibility criterion for the scheme requires that where a business is experiencing a significant negative economic disruption due to the Covid-19 pandemic, the employer must make a declaration which states that, based on reasonable projections, as a result of disruption to the business caused or to be caused by the Covid-19 pandemic, there will be a decline of at least 25% in the future turnover of, or customer orders for, the business for the duration of the pandemic. An employer that has been hit by a significant decline in business but has strong cash reserves, which are not required to fund debt, may still qualify for the scheme, but the Government would be expecting such an employer to continue to pay some element of employees’ wages. For some businesses, application of a turnover test or a test involving a reduction in customer orders may be problematic. In such cases, Revenue are prepared to consider an alternative approach to gauging the economic impact on the business. In such cases, however, while it is not possible to be prescriptive as to what might or might not constitute a reasonable basis other than the turnover test or the orders test, the starting position has to be that neither the turnover test nor the reduction in customer orders test is capable of being applied to the business in question. It is not sufficient that the business does not meet either of these tests. It must be the case that neither of these tests are capable of being applied to the business in question before an alternative basis for assessing eligibility is used. In all such cases, guidance from Revenue should be sought on the eligibility of the business for the scheme. Operation of the TWSS Question Nos 355/20, 504/20, 635/20, 704/20, 747/20, 806/20 and 846/20 from Deputies Lowry, Troy, O’Sullivan, Shortall, O’Cathasaigh and O’Callaghan respectively, relate to TWSS operational matters. In operating the TWSS, Revenue’s priority is to ensure that all employers experiencing significant negative economic disruption from COVID-19 can register for and start to receive payment as quickly as possible. For that reason, the application process is simplified into three steps requiring the employer or his or her agent to log into the Revenue Online System and select the Temporary Wage Subsidy Scheme, read and submit a declaration to confirm eligibility and then Revenue will issue a confirmation via Revenue’s MyEnquiries system and the employer can immediately operate the scheme.

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By ensuring a speedy payment process, the hardship for employers experiencing significant negative economic disruption, and for employees who are temporarily laid off or have their wages and/or hours reduced, is minimised. Valid Covid-19 wage subsidy claims are refunded to the company’s bank account the day after receipt of the payroll from the company. Payroll can be submitted up to four days in advance of the payroll run. The Revenue Commissioners are not aware of complaints related to delays in payment for valid submissions causing an increase in the number of people being made unemployed. However, the Revenue Commissioners have had to issue a number of press releases advising employers who had not yet registered a Refund Bank Account with them to immediately do so. In the absence of such a bank account on the Revenue record, a refund cannot be made to the employer concerned. Employers who are registered for the scheme, but who have not yet registered their Refund Bank Account with Revenue, should immediately rectify this failure. The TWSS is expected to last 12 weeks from its introduction on 27 March. Eligible employers may operate the wage subsidy for all or part of the duration of the scheme. Revenue guidance sets out that “eligible employers can participate in the scheme in respect of any eligible employees on their payroll, including those on fulltime or reduced hours, rehired staff who were temporarily laid off, or staff temporarily laid off but retained on the payroll. Where an employee previously laid off has been re-hired, the employee will qualify for the scheme once their DEASP claim is ceased. Eligibility for the scheme can be satisfied by an employer once they meet the relevant criteria which can be at any point in time during the scheme’s duration. The scheme is predicated on the employer wanting to keep the employees on the payroll and to retain them until business picks up. The employer is expected to make best efforts to maintain the employee’s net income as close as possible to normal net income for the duration of the Subsidy period. There is, however, no minimum amount that the employer must pay as an additional payment in order to be eligible for the scheme, but for Revenue operational systems reasons the employer will need to enter at least €0.01 in Gross Pay when running its payroll. Furthermore, the scheme is available to eligible employers across all sectors, excluding the Public Service and Non-Commercial Semi-State Sector. This includes businesses which have closed due to the restrictions brought in by the Government and those that continue to trade. The Deputies will be aware that I cannot comment on any specific employer that may have been mentioned in information supplied with a question. However, as I have said already, the subsidy is calculated based on the net pay reported for January and February 2020. Application and operation of the scheme is based largely on self-assessment principles. Penalties will apply to any abuse of the scheme by an employer (see below relating to compliance). I would reiterate though that the scheme has no role in relation to the employer/employee relationship and the issue of employment rights and terms and conditions. Sometimes referred to as ‘top-up payments’, an employer can choose to make an additional payment to the employee to fully or partially make up the difference between the amount provided by the subsidy scheme and the employee’s Average Net Weekly Pay. There is no requirement for the employer to re-gross such additional payments; in fact, it is incorrect for these amounts to be re-grossed. If an employer makes an additional payment greater than the difference allowed by the scheme (i.e. the employee receives more than the Average Net Weekly Pay) then the subsidy value refundable to the employer will be reduced by this excess amount when the refund reconciliation is performed by Revenue in due course. Taxation issues

46

In keeping with the Government’s intention to get much needed financial support into the hands of affected workers as quickly as possible, the TWSS payments are not taxable in real-time through the PAYE system. However, the subsidy payments remain liable to income tax in the hands of the recipients; they will be taxable by review at the end of the year. Taxation of the TWSS payments is necessary from an equity perspective. The TWSS payments are a wage subsidy and taxpayers in receipt of comparable “normal wages” are taxable on those wages. Any top up of a TWSS payment by the payment of some element of normal wages by the employer remains taxable through the PAYE system. Revenue has advised that when an end of the year review takes place, it may be the case that an employee’s unused tax credits will cover any further liability that may arise as a result of taxation of TWSS payments. Where this is not the case, and should a liability arise, it is normal Revenue practice to collect any tax owing in manageable amounts by reducing an individual’s tax credits for a future year or future years in order to minimise any hardship. Additionally, if an individual has any additional tax credits to claim, for example health expenses, this will also reduce any tax that may be owing. I have been assured by Revenue that they will be adopting a fair and flexible approach to collecting tax due on the TWSS payments. Oversight of compliance with the terms of the TWSS Question Nos 149/20 and 679/20 from Deputies Barry and Connolly, respectively, relate to the question of oversight of compliance with the terms and conditions of the TWSS. As I have said, the administration of the scheme is under the care and management of the Revenue Commissioners. In due course, Revenue will be undertaking compliance checks and interventions. While the scheme operates at employer level on largely self-assessment principles, Revenue will expect businesses to be able to produce relevant supporting documentation when requested to do so and to fully engage with Revenue on any follow up discussions or checks. Eligibility will initially be determined largely on the basis of the self-assessment and declaration by the employer concerned, combined with a risk focused follow up verification by Revenue involving an examination of relevant business records where that is considered necessary. Where an employer receives amounts under the scheme and the employer has not paid the subsidy amount to the specified employee, or where the employer was not entitled to receive the subsidy as it did not meet the qualifying criteria, the employer will be compelled to refund these amounts to Revenue, with interest. Interest will be charged on the amounts to be recovered at the rate of 0.0219 per cent for each day or part of a day from the date when the amount in question was paid to the employer. The legislation governing the TWSS also provides for penalties for abuses of the scheme but only in certain prescribed circumstances. Thus, an employer is liable to a penalty of €3,000, where the employer fails to include in, and separately identify in, the wage slips legally required to be given to employees under the Payment of Wages Act 1991 the amount of the wage subsidy. Where the employer who fails to so comply is a body of persons, the secretary of that body is liable to a separate penalty of €3,000. These penalties are not considered unreasonable; they are designed to ensure transparency around the wage subsidy and to protect employees who are entitled to know what wage subsidy the employer has received in respect of them. There are more severe criminal penalties where an employer knowingly or wilfully delivers an incorrect return or statement, or knowingly or wilfully furnishes any incorrect information, in connection with the temporary wage subsidy scheme or where a person knowingly assists another person to furnish incorrect information in relation to the scheme. The penalties can be a fine of up to €5,000 and/or imprisonment for a term not exceeding one year in the case of a summary

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conviction and a fine of up to €126,970 and/or imprisonment for a term not exceeding 5 years in the case of a conviction on indictment. The penalties in question are severe because they are designed to protect against deliberate fraud by unscrupulous employers seeking to abuse what is a generous and expensive State support. However, given the way the scheme is structured, in that the employer must have been compliant with its PAYE/PRSI reporting obligations and the employee must have been on the employer’s payroll at 29 February 2020, the opportunity for deliberate fraud is limited, but given the national emergency any attempt to defraud the scheme should be dealt with severely. Statistical questions Question Nos 406/20, 407/20, 588/20, 589/20, 590/20, 591/20, 592/20, 593/20, 671/20, 672/20, 805/20 and 845/20 from Deputies McGrath (2 questions), Nash (6 questions), Mythen (2 questions) and Troy (2 questions) relate to statistics on the TWSS. On 9 April 2020, Revenue published an initial set of statistics on the operation of the TWSS. These statistics are available at: https://www.revenue.ie/en/corporate/information-about-revenue/statistics/number-of-taxpayers-and-returns/covid-19-wage-subsidy-scheme-statistics.aspx . The statistics cover the operation of the TWSS to 9 April. The data published include the cost of the scheme to date, numbers of employers and employees in receipt of payments under the scheme and breakdowns of the employee and employer numbers by size of business, sector of activity, location and number of employees. I am advised that Revenue is continuing to undertake further analysis of TWSS and will publish updated and expanded statistics on a regular basis. These updates will be published at the link noted above. Ireland has reacted speedily to the COVID-19 crisis putting in place a number of supports in response to the health and economic impact of the crisis. The current estimate is that €4bn - €5bn is expected to be spent over a potential 12 week period for the Temporary Wage Subsidy Scheme, COVID-19 Pandemic Unemployment Payment and Covid -19 Illness Benefit Payment. Conclusion As I have said, both the legislation and operating system for the TWSS were developed with remarkable speed. What would have normally taken months to do was delivered in little over a week. This was all necessary to get much needed income supports in the hands of employers for passing on to their employees, all in the interests of facilitating employers in keeping employees on payroll and retaining links with them, which will be vital when business finally picks up after the Covid-19 crisis is over. While there may well be some imperfections with the TWSS, speed of delivery was of the essence on this occasion. I am confident that the Revenue Commissioners will continue to administer the TWSS in their usual fair, efficient and practical manner, having regard to the underlying law and its purpose. It is a real success story to date, yet a stark reminder of the scale of the impact of the Covid 19 pandemic, when one considers that at 9 April 2020, less than 2 weeks after the enactment of that law, over 41,000 employers had registered with Revenue for the TWSS, with over 26,200 employers having received refunds. Some €155 million had been refunded to employers by that date, including €14.8 million in income tax overpayments refunded, and some 219,400 employees had already received at least one payment under the TWSS, of which approximately 80 per cent had also received a top up payment of normal wages from their employers. Finally, I would draw the attention of Deputies to the fact that comprehensive information on employer eligibility and supporting proofs and the operation of the Temporary Wage Subsidy Scheme is available on the Revenue website at:

https://www.revenue.ie/en/corporate/information-about-revenue/statistics/number-of-taxpayers-and-returns/covid-19-wage-subsidy-scheme-statistics.aspx

https://www.revenue.ie/en/corporate/information-about-revenue/statistics/number-of-taxpayers-and-returns/covid-19-wage-subsidy-scheme-statistics.aspx

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www.revenue.ie/en/corporate/communications/documents/guidance-on-employer-eligibility-and-supporting-proofs.pdf and https://www.revenue.ie/en/employing-people/documents/pmod-topics/guidance-on-operation-of-temporary-covid-wage-subsidy-scheme.pdf The Revenue Commissioners will continue to update this guidance as required.

Topic – Economic Projections FIN/COVID/675/20 by Johnny Mythen T.D. To ask the Minister for Finance what, on current estimates, are the Department’s projections for

changes to GDP, unemployment and inflation for the year 2020, and if he will make a statement on

the matter

While necessary from a public health perspective, the policy response to the spread of the Covid-19 pandemic will result in a sharp contraction in economic activity, with the speed of impact unprecedented in modern times. The temporary suspension of all ‘non-essential’ economic activity means that Irish economic activity has been dramatically reduced. These ‘non-essential’ sectors represented approximately one-third of overall Irish economic activity. The impact of the pandemic on a small open economy like Ireland will also depend on how well our main trading partners deal with Covid-19. In that regard, recent European and wider global high frequency data, notably the PMI’s are consistent with a sharp, synchronised contraction in economic activity in the first and second quarters of this year. It is therefore likely that all sources of Irish economic growth including personal consumer spending, investment and exports will all decline this year. The unprecedented shock to economic activity will result in many jobs being lost, resulting in a dramatic increase in the unemployment rate. Indeed, recent figures published by the Department of Employment Affairs and Social Protection show that well over 500,000 people have applied for the new Pandemic Unemployment Payment. As the Covid-19 shock will significantly weaken the level of demand in the economy, it is also likely that consumer price inflation will decline this year. My Department will publish updated economic forecasts as part of the Stability Programme Update next week. The forecasts will include projections for GDP, unemployment and inflation for the years 2020 and 2021. These forecasts will show a significant decline in GDP this year.

Topic – Banking FIN/COVID/424/20 by Michael McGrath T.D. To ask the Minister for Finance in his engagement with the banking industry in response to the

COVID-19 outbreak whether he has discussed banking fees, specifically in charges that are applied

when savings fall below a certain amount, whether he believes there should be relief for people who

have suffered significant falls in income and whose accounts have fallen below that balance or have

gone into overdraft and if he will make a statement on the matter.

http://www.revenue.ie/en/corporate/communications/documents/guidance-on-employer-eligibility-and-supporting-proofs.pdf

http://www.revenue.ie/en/corporate/communications/documents/guidance-on-employer-eligibility-and-supporting-proofs.pdf

https://www.revenue.ie/en/employing-people/documents/pmod-topics/guidance-on-operation-of-temporary-covid-wage-subsidy-scheme.pdf

https://www.revenue.ie/en/employing-people/documents/pmod-topics/guidance-on-operation-of-temporary-covid-wage-subsidy-scheme.pdf

49

As the Deputy is aware, on 18th March 2020, I met, and had a constructive meeting, with the Banking and Payments Federation Ireland (BPFI) and the CEOs of the five main banks. Subsequently, they introduced a range of supports for all of their customers, including mortgage holders and SMEs, affected by COVID 19. With regard to bank fees and charges, the position is that these are commercial decisions for each bank and under Section 149 of the Consumer Credit Act 1995, the responsibility for the regulation of bank fees lies with the Central Bank of Ireland. However, I welcome the decision taken by a number of banks to defer planned increases in their fees. The issue of the interaction between savings and bank charges has not been raised before. I would ask the Deputy to provide further details.

Tithe an Rialtas. Sráid Mhuirfean Uacht, Baile Átha Cliath 2, D02 R583, Éire Government Buildings, Upper Merrion Street, Dublin 2, D02 R583, Ireland T:+353 1 676 7571 @IRLDeptFinance

www.gov.ie/finance

COVID-19 PQ Responses · Topic – Benefit in Kind FIN/COVID/244/20 by Frank Feighan T.D. To ask...

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