COVID-19 PQ Responses 11Th May 2020

COVID-19 PQ Responses 11th May 2020

Prepared by Corporate Affairs, Department of Finance www.gov.ie/finance

Topic – Insurance

FIN/COVID/5.064/20 by Brendan Griffin T.D. To ask the Minister for Finance is it correct that Insurance Companies won’t cover Building Contractors to carry out essential repairs on a houses (Roof is in poor condition and not weather tight) during the Covid 19 restrictions even though the owner notified Garda Siochana who gave permission to the Contractor to travel and if he will make a statement on the matter.

At the outset, it should be noted that as Minister for Finance, I do not have any knowledge of such matters as these form part of the terms and conditions of a particular insurance policy. In addition, I do not have any role in adjudicating on such matters. Having said that, my officials made contact with Insurance Ireland on the Deputy’s question. However, Insurance Ireland were unable to provide a view on this without further information on the case in question. Insurance Ireland recommended that the contractor in this case make contact with them directly through their Insurance Information Service. This can be accessed at: [email protected]. This Service provides assistance to those who have queries, complaints or difficulties in relation to their insurance.

In relation to the more general issue of what type of work is considered to be essential, while it is not something that I have responsibility for, I would draw the Deputy’s attention to the list of essential service providers under current COVID-19 public health guidelines as published by the Government on 28 March. The guidelines can be found here: https://www.gov.ie/en/publication/dfeb8f-list-of-essential-service-providers-under-new-public- health-guidelin/. While I would not propose to comment on whether the work in the query submitted is considered to be emergency work, I would note that the Guidelines provide that “the delivery of emergency services to businesses and homes on an emergency call-out basis in areas such as electrical, plumbing, glazing and roofing” is an essential service. The Deputy should note also that, under current plans for Phase 1 of the Government’s Roadmap for Reopening Society and Business, from 18 May, construction workers will be allowed to return to work with social distancing measures applied. More information can be found here: https://www.gov.ie/en/publication/ad5dd0-easing-the-covid-19-restrictions-on-may-18-phase-1/ I believe that this may also be a relevant factor in this case.

Finally, I would add that if the concerned party in this question is dissatisfied with the service received from an insurance provider, they may make a complaint to the Financial Services and Pensions Ombudsman (FSPO). The FSPO is a statutory official who acts as an independent arbiter of disputes which consumers may have with their insurance company or other financial service provider. The FSPO can be contacted either by email at [email protected] or by telephone at 01-567- 7000.

Topic – Money Lenders

FIN/COVID/5.189/20 by Jennifer Whitmore T.D. To ask the Minister for Finance what measures are being put in place to advise people of the risks of money lending from private companies during COVI19? If there are plans to include alternative loan information on all material published and a ‘high risk loan’ warning on all advertising on moneylending?

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 while engaging in the business of moneylending. The relevant statutory and regulatory provisions in relation to advertising by licensed moneylenders are set out in the CCR and the ML Code. 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.

There is a strong framework of protection in place for consumers who choose to avail of the services of licensed moneylenders. In addition to the protections provided under the Central Bank’s ML Code, there are also important protections provided for in the relevant legislation whereby licensed moneylenders are prohibited from applying additional charges (other than a collection charge) to a moneylending agreement and are also prohibited from applying any additional charges in the event of a default in the payments due under the agreement (i.e., the total amount repayable by a consumer is limited to the amount specified in the moneylending agreement (the only exception being the awarding of legal costs by a Court of law)). 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 regulatory activities in a manner which reflects a culture of responsibility at all times. The Central Bank actively communicates to moneylenders in this regard.

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, which have left many in a financially vulnerable situation. The Central Bank expects licensed moneylenders to take account of the difficult and challenging situation in which many consumers find themselves and to take a consumer-focused approach in providing reasonable arrangements and/or assistance to support consumers affected by the COVID-19 situation at this difficult time. Licensed moneylenders who continue to issue loans to consumers must ensure they carry out adequate affordability assessments, particularly taking into account any financial difficulties faced by consumers as a result of COVID-19.

The Central Bank is continuing to work towards the publication of the revised ML Code in the form of Statutory Regulations, which it expects to issue shortly.

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 the framing of policy proposals by my Department.

Topic – Insurance

FIN/COVID/5.447/20 by Brendan Smith T.D. To ask the Minister for Finance the outcome of discussions, if any, he had with insurance companies in relation to business interruption cover in view of the widespread concerns from businesses in different sectors and if he will make a statement on the matter.

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 sector 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. In addition, the Deputy should note that the Central Bank wrote to the CEOs of major insurers outlining its expectations of them in this crisis from a consumer protection perspective.

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 and 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.

It is important that businesses contact their insurers or brokers to avail of these offers.

I believe that the above agreement should assist businesses in relation to their insurance. I have asked Insurance Ireland to put in place a mechanism, which will provide proof of delivery on these commitments, and I understand they are working on some type of activity tracker. My officials will also monitor the implementation of it and will have a good insight into how it is being applied through their regular interaction with the Alliance for Insurance Reform.

Following up on from my correspondence, I held a teleconference with Insurance Ireland, on the 17th of April, where I reiterated that that some insurers by adopting a “blanket” rejection of all business interruption claims were doing the industry significant reputational damage and were not treating customers fairly. I also discussed a range of other insurance related matters on the teleconference, including motor insurance premium refunds, and a statement outlining the nature of my engagement with Insurance Ireland was issued by the Department and can be found here: https://www.gov.ie/en/press-release/edabf2-minister-donohoe-emphasises-his-concerns-to- insurance-ireland-regard/.

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.

Topic – Assistance to SME’s

FIN/COVID/5.146/20 by John Lahart T.D. To ask the Minister for Finance what plans he has in place, or is he preparing, to help assist small businesses as they try to get back to a steady income once they have re-opened (i.e when the wage subsidy scheme and covid-19 emergency payments have stopped) and if he will make a statement on the matter.

Following the publication by the Government on Friday the 1st of May of its Roadmap for Reopening Society and Business, Government met and agreed a range of measures to aid SMEs on Saturday the 2nd of May. The measures that I, along with my colleagues Minister Humphreys and Minister Murphy, announced to assist businesses to restart and to return to normal operations are:

• A €10,000 restart grant for micro and small businesses based on a rates/waiver rebate from 2019; • A three month commercial rates waiver for impacted businesses; • A €2 billion Pandemic Stabilisation and Recovery Fund within the Ireland Strategic Investment Fund (ISIF), which will make capital available to medium and large enterprises on commercial terms; • A €2 billion COVID-19 Credit Guarantee Scheme to support lending to SMEs for terms ranging from 3 months to 6 years, which will be below market interest rates; • The ‘warehousing’ of tax liabilities for a period of twelve months after recommencement of trading during which time there will be no debt enforcement action taken by Revenue and no interest charge accruing in respect of the warehoused debt; • A commitment to local authorities to make up the rates shortfall, so that local authorities can continue provide full services to the public.

This suite of measures is designed to build confidence, further assist businesses in terms of the management of their companies, and allow them to plan to restart their businesses and to reconnect and rehire staff who have been laid off or furloughed.

Topic – Benefit-in-kind

FIN/COVID/5.154/20 by Michael McGrath T.D. To ask the Minister for Finance given that the benefit in kind tax bracket a company employee with a company vehicle falls into is dependent on mileage done and many such persons are now travelling considerably less as a result of COVID-19, if he has any plans to make changes in relation to the tax treatment of such benefit in kind; and if he will make a statement on the matter.

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 – Pandemic Stabilisation and Recovery Fund

FIN/COVID/5.705/20 by Michael McGrath T.D. To ask the Minister for Finance when the Pandemic Stabilisation and Recovery Fund will be up and running, whether it requires primary legislation to establish it, the expected cost to the Exchequer, whether this cost will be leveraged to provide greater support, whether this measure requires State Aid approval and if he will make a statement on the matter.

The Pandemic Stabilisation and Recovery Fund (PSRF), which will have €2 billion in total capital, will be made available through a sub-portfolio within the readily available capital of the Ireland Strategic Investment Fund (ISIF). Its establishment represents a short to medium term change of strategic focus for the ISIF, under its existing statutory mandate, thus allowing for swift implementation. As required under ISIF’s statutory mandate, the PSRF will be invested on a commercial basis seeking an appropriate risk- adjusted return and economic impact from investments it makes. The commercial return requirement should mitigate State Aid approval requirements and ensure that these investments do not incur an overall cost to the Exchequer. As I stated at the announcement of this Fund last week, ISIF will endeavour to leverage up its investments by seeking to partner with commercial investors, both new and existing, to generate new investment and to support restructuring. ISIF will seek to maximise the quantum of additional capital that a business can access from its existing shareholders and banks, from potential new co- investors and from European sources, such as the European Investment Bank, thereby minimising the amount of ISIF capital that may be needed.

Topic – Mortgages

FIN/COVID/5.397/20 by Roderic O’Gorman T.D. To ask the Minister for Finance whether he is aware of banks refusing mortgage applications on the sole basis of the loss of income of the applicants due to the Covid19 crisis, despite the replacement of this income by the Covid Pandemic Payment and a guarantee from the employer that the job will be retained once the opening restrictions are lifted and will he make a statement on the matter?

There are certain legal and regulatory requirements governing the provision of residential mortgage credit to consumers.

The European Union (Consumer Mortgage Credit Agreements) Regulations 2016 (which transposed the Mortgage Credit Directive into Irish law) provides that, before concluding a mortgage credit agreement, a lender must make a thorough assessment of the consumer’s creditworthiness. The assessment must take appropriate account of factors relevant to verifying the prospect of the consumer being able to meet his or her obligations under the credit agreement. The Regulations also provide that a lender should only make credit available to a consumer where the result of the creditworthiness assessment indicates that the consumer’s obligations resulting from the credit agreement are likely to be met in the manner required under that agreement. The assessment of creditworthiness must be carried out on the basis of information on the consumer’s income and expenses and other financial and economic circumstances which is necessary, sufficient and proportionate. In addition, the Central Bank’s Consumer Protection Code 2012 imposes ‘Knowing the Consumer and Suitability’ requirements on lenders. Under these requirements, lenders are required to assess affordability of credit and the suitability of a product or service based on the individual circumstances of each borrower.

The Central Bank indicates that it expects all regulated firms to take a consumer-focused approach and to act in their customers’ best interests at all times, including during the COVID-19 pandemic. Lenders continue to process mortgage applications and have supports in place to assist customers impacted by COVID-19. Customers should also consult the information on the Banking and Payments Federation Ireland website on the impact of COVID-19 on mortgage applications (https://www.bpfi.ie/key-topics/mortgages-covid-19-support-faq/) or contact their lender directly, if they have any queries or concerns about the impact of COVID-19 on their mortgage application.

Within the parameters of the regulatory framework, the decision to grant or refuse an individual application for mortgage credit is a commercial decision to be made by the regulated entity. A loan offer may contain a condition that the lender can withdraw or vary the offer if in the lender’s opinion there is any material change in circumstances prior to drawdown. In such cases, the decision to withdraw or vary the offer is a commercial decision for the lender.

Topic – Banking

FIN/COVID/5.528/20 by Jennifer Whitmore T.D. To ask the Minister for Finance how he will address the issue of banks valuing homes below the price (due to COVID-19) at which deposits have already been paid by new homeowners

FIN/COVID/5.529/20 by Jennifer Whitmore T.D. To ask the Minister for Finance how he will address the impact increased mortgage restrictions by Central Bank will have on first time buyers hoping to buy a home after COVID-19

The Central Bank has advised that no new restrictions have been applied to mortgage lending by banks due to the Covid-19 crisis.

The Central Bank’s macro-prudential mortgage measures are aimed at strengthening the resilience of both borrowers and the banking sector, and they do this by limiting the amount of high loan-to- value (LTV) and loan-to-income (LTI) lending in the market.

The Central Bank annually reviews the calibration of the measures in the context of wider housing and mortgage market developments to ensure that they continue to meet their objectives of:

• Increasing the resilience of banks and borrowers to negative economic and financial shocks • Dampening the pro-cyclicality of credit and house prices so a damaging credit-house price spiral does not emerge.

The mortgage measures, which were last reviewed in December 2019, includes a system of ‘allowances’ which allows a certain a percentage of each lender’s total annual mortgage loan

volume to be issued above the stated LTI and LTV limits. The allowances are an important feature of the mortgage measures as they allow flexibility for lenders, at their discretion, to exceed the proscribed LTV and LTI limits for a proportion of their overall annual lending, subject to banks’ satisfying themselves in regard to their own lending criteria and standards. The allocation of the lending allowances, therefore, is a matter for individual lenders.

While the regulations around the operation of the allowances for mortgages have not changed in light of the COVID-19 pandemic, the Central Bank has advised that it will continue to ensure that the mortgage measures are functioning as intended, and are achieving the system-wide protection of borrowers and lenders by limiting the amount of high LTV and LTI mortgages. However, over and above the requirements of the macro-prudential mortgage lending regulations, individual banks also have their own individual credit policies and criteria and the lending rules are not a substitute for lenders’ responsibilities to assess affordability, lend prudently and comply with all necessary consumer protection obligations.

In relation to the matter of property valuations, the European Union (Consumer Mortgage Credit Agreements) Regulations 2016 (which transposed the provisions of the Mortgage Credit Directive into Irish law) contains certain requirements in relation to the valuation property for residential mortgage lending purposes, and, in particular, it requires that lenders use appraisers who are professionally competent (and use reliable valuation standards) and who are sufficiently independent from the credit underwriting process so that that an impartial and objective valuation of the secured property is provided.

Topic – Mortgages

FIN/COVID/5.372/20 by Neasa Hourigan T.D. To ask the Minister for Finance whether he has plans to issue guidance to banks (around blanket refusals, treatment of Wage Subsidy Scheme receipt as a break in employment, etc.) that are refusing mortgages* to people who work for companies that have availed of the Wage Subsidy Scheme.

*We have one constituent whose mortgage was pulled at drawn down stage by (details supplied) because the (details supplied) viewed that the company was not a suitably stable employer because it had availed of the wage subsidy scheme.

There are certain legal and regulatory requirements governing the provision of residential mortgage credit to consumers.

Topic – Mortgages

FIN/COVID/5.672/20 by Pearse Doherty T.D. To ask the Minister for Finance what correspondence has the Minister had with the Banking and Payments Federation regarding the rejection of mortgage applications by mortgage lenders on the grounds that applicants are availing of the Temporary Wage Subsidy Scheme, and if he will make a statement on the matter

FIN/COVID/5.673/20 by Pearse Doherty T.D. To ask the Minister for Finance what correspondence has the Minister had with any of the five retail banks regarding the rejection of mortgage applications by mortgage lenders on the grounds that applicants are availing of the Temporary Wage Subsidy Scheme, and if he will make a statement on the matter

FIN/COVID/5.674/20 by Pearse Doherty T.D. To ask the Minister for Finance what correspondence has the Minister had with the Central Bank regarding the rejection of mortgage applications by mortgage lenders on the grounds that applicants are availing of the Temporary Wage Subsidy Scheme, and if he will make a statement on the matter

As the Deputy is aware I first met with Banking and Payments Federation Ireland (BPFI) and the CEOs of the five main retail banks on 18 March last in relation to the Covid-19 crisis, and since then my Department has kept in contact with the BPFI and certain lenders on this matter. Also my Department has been in close contact with the Central Bank on the impact of Covid-19 on the economic and financial system, as well as all other matters of mutual interest.

There are certain legal and regulatory requirements governing the provision of residential mortgage credit to consumers. The European Union (Consumer Mortgage Credit Agreements) Regulations 2016 (which transposed the Mortgage Credit Directive into Irish law) provides that, before concluding a mortgage credit agreement, a lender must make a thorough assessment of the consumer’s creditworthiness. The assessment must take appropriate account of factors relevant to verifying the prospect of the consumer being able to meet his or her obligations under the credit agreement. The Regulations also provide that a lender should only make credit available to a consumer where the result of the creditworthiness assessment indicates that the consumer’s obligations resulting from the credit agreement are likely to be met in the manner required under that agreement. The assessment of creditworthiness must be carried out on the basis of information on the consumer’s income and expenses and other financial and economic circumstances which is necessary, sufficient and proportionate. In addition, the Central Bank’s Consumer Protection Code 2012 imposes ‘Knowing the Consumer and Suitability’ requirements on

lenders. Under these requirements, lenders are required to assess affordability of credit and the suitability of a product or service based on the individual circumstances of each borrower. All Central Bank regulated entities have to comply with these requirements in relation to the provision of mortgage credit to consumers.

The Central Bank indicates that it expects all regulated firms to take a consumer-focused approach and to act in their customers’ best interests at all times, including during the Covid-19 pandemic. Lenders continue to process mortgage applications and have supports in place to assist customers impacted by COVID-19. Customers should also consult the information on the Banking and Payments Federation Ireland website on the impact of COVID-19 on mortgage applications (https://www.bpfi.ie/key-topics/mortgages-covid-19-support-faq/) or contact their lender directly, if they have any queries or concerns about the impact of Covid-19 on their mortgage application.

Within the parameters of the regulatory framework, it is then a matter for individual banks and other lenders to determine their own individual credit policies and criteria for mortgage and other lending and to make their own decisions on individual mortgage applications and I have no role in such decisions. Nevertheless, there is a requirement on all lenders to act honestly, fairly, transparently and professionally, taking account of the rights and interests of the consumer, at all stages of the mortgage process, including when granting mortgage credit.

Topic – Mortgages

FIN/COVID/5.665/20 by Darren O’Rourke T.D. To ask the Minister for Finance if he will outline what supports and contingencies are in place for people who have put down deposits on new homes and who are now in receipt of Covid-19 payment and who’s purchase is now at risk for mortgage and construction reasons; if he will guarantee that their deposits will not be lost.

The sale or conveyancing of property is a matter that is generally governed by property and contract law. In addition, the particular terms on which the title or other rights associated with any particular property is conveyed from a seller to a purchaser, including any matter in relation to the payment of a deposit and closing, will be contractual matters for the parties to the contract. As Minister for Finance I do not have a primary policy function for the law relating to the conveyancing of property or in relation to the operation of private contracts, and of course I would have no knowledge of the particular contractual arrangements entered into by the parties to a particular private contract. Therefore, it would not be appropriate for me to offer to guarantee the obligations or commitments purchasers or sellers may make in private contracts for the conveyance of property, or in relation to any private contract more generally. Matters relating to the payment and/or return of deposits associated with the conveyancing of a property will be ones that are subject to general contract law and also the terms of the individual private contract, and will fall to be considered within that framework. However, as the conveyance of property is usually a significant transaction it can be noted that both the purchaser and seller of a property usually employ legal expertise to advise and assist on the various requirements at each stage of the property transaction, as well as on any associated contract or service which will be necessary to enable either of the parties to meet their obligations as agreed in the property transaction.

Topic – Stability Programme Update (SPU)

FIN/COVID/5.306/20 by Micheal McGrath T.D. To ask the Minister for Finance if the assumptions underpinning the Stability Programme Update (SPU) document in terms of the economic impact of Covid-19 are consistent with the plans laid out in the ‘Road map for reopening society and business’ published on 1 May 2020; if this means the

economic impact of Covid-19 is now likely to be different to that set out in the SPU; and if he will make a statement on the matter

The economic projections in the Stability Programme Update (SPU) 2020 assume a large shock in the second quarter of the year, followed by a gradual re-opening of the economy, which is broadly in line with the plans laid out in the Roadmap (‘Roadmap for Reopening Society and Business’).

The Covid-19 shock to the economy is without historical precedent and, as a result, there is a great deal of uncertainty surrounding the magnitude of the economic impact. My Department has therefore taken the approach with the SPU projections of producing a scenario based analysis rather than a traditional forecast. The prudent, but not worst case, ‘central’ scenario underpinning the SPU projections is one in which containment measures are assumed to remain in place for approximately three months, resulting in a very sharp contraction in the latter weeks of the first quarter and most of the second quarter. Thereafter, a very gradual recovery commencing in the third quarter is assumed reflecting a gradual easing of containment measures and the assumption that a vaccination is available before next year.

Under this scenario, GDP is expected to decline by 10.5 per cent this year. Modified Domestic Demand, perhaps the best indicator of domestic economic conditions, is projected to fall by 15 per cent this year. The unemployment rate is projected to dramatically rise over the first half of the year, reaching a peak of 22 per cent in the second quarter, before falling over the second half of the year, as containment measures are gradually eased. However, this recovery path over the second half of this year and into next year is a function of several factors, including the epidemiology of the virus and the success of containment measures, of which there is considerable uncertainty. As outlined in the SPU, in more severe scenarios where containment measures are extended into the third or fourth quarters of this year, instead of a projected fall of 10 ½ per cent, GDP would be expected to decline by 13 ¾ and 15 ¼ per cent, respectively.

In a timeline, broadly consistent with the SPU central scenario, the Roadmap provides an indicative overview of how the economy and society can be gradually reopened. However, as outlined in the Roadmap, the gradual reopening will be contingent on the ability to protect those most vulnerable to infection as a well as protecting against other factors which may lead to risk of spreading the disease. As a result, containment measures could be extended at any stage or may need to be reintroduced if a second wave of infections materialises.

Topic – Carbon Tax

FIN/COVID/5.453/20 by Aindrias Moynihan T.D. To ask the Minister for Finance if a freeze could be considered on the new current carbon tax due to the financial strains on households during the Covid 19 pandemic and if he can make a statement of the matter.

FIN/COVID/5.578/20 by Sean Crowe T.D. To ask the Minister for Finance would he not agree that the timing and the introduction of a Carbon Tax in middle of COVID-19 Pandemic when family incomes are being decimated will create even further hardship and will he consider putting these measures on hold.

FIN/COVID/5.648/20 by Matt Carthy T.D. To ask the Minister for Finance to outline his proposals regarding the increase in Carbon Tax considering the vulnerable state of the economy as a result of Covid-19.

I propose answering questions 5.453/20, 5.578/20 and 5.648/20 together.

In my Budget 2020 financial statement I announced an increase to the rate of carbon tax from €20 to €26 per tonne of carbon dioxide emissions. This is the first increase to the carbon tax rate since 2012. My decision to increase the rate followed extensive examination of all relevant factors including the impact on the business sector and households as well as the Government’s commitment to tackling climate change.

The impact on the most commonly used household fuel bundles is set out in the table below:

Fuel Type Typical Fuel Carbon tax at Carbon Tax at €26 Impact of Increase Bundle €20 (incl VAT) (incl VAT) (incl VAT) Petrol 60 litre fill €3.39 €4.42 €1.03 Diesel 60 litre fill €3.93 €5.11 €1.18 Kerosene 900 litre fill €51.82 €67.15 €15.33 Peat 12.5kg bale €0.52 €0.68 €0.16 Coal 40 kg bag €2.39 €3.11 €0.72 Natural Gas* 11,000 kwh €46.19 €58.80 €12.61 annual consumption

*Data from the Commission for Regulation of Utilities, Water and Energy (“CRU”) shows that the average household consumption of natural gas per annum is 11,000 MWh.

The recommendations of the Joint Oireachtas Committee on Climate Action and the 2019 Climate Action Plan to increase the rate of carbon tax to €80 per tonne of emission by 2030 received cross- party support. Instead of a larger increase in any one year, the Government committed to a €6 increase as a first step towards the 2030 target. In order to ease in the increase I decided to delay the commencement of the increase for marked gas oil and home heating fuels until 1 May 2020, a time of the year when home heating requirements are low.

In Budget 2020, I also made provision for ringfencing all additional revenue arising from carbon tax increases. At this point it was estimated that the €6 increase would provide additional revenue of some €90 million in 2020 which has been allocated for expenditure on measures related to climate action, protecting the vulnerable and the Just Transition. Some €34 million was allocated to protecting those most vulnerable to fuel poverty by increasing the national fuel allowance payment and providing increased funding for energy efficiency upgrades.

Analysis conducted by the Department of Finance (A distributional analysis of Budget 2020 Tax and Welfare measures) using the ESRI SWITCH microsimulation model, confirms that households in the bottom three income deciles will experience a net positive impact in their equivalised disposable income as a result of the changes introduced in Budget 2020 when account is taken of the increase in carbon tax, the increase in fuel allowance and the range of other welfare measures announced. In particular, the analysis finds that any regressive impact of the carbon tax is outweighed by the increase in social welfare transfers and direct tax measures, even before the fuller benefits of the announced carbon tax revenue recycling are accounted for.

Further, whereas the carbon tax increase for home heating fuels applies from 1 May 2020, the increase of €2 per week in the national fuel allowance applied from 6 January 2020. In order to ensure the most vulnerable groups are provided with additional targeted financial supports in a timely and efficient manner, Minister Doherty and I recently announced that the term of this scheme is to be extended by 4 weeks until 8 May (as a one-off measure).

I am acutely aware of the financial uncertainty and strain that many households and businesses are facing as a result of the restrictions in place to limit the spread of Covid19. In order to alleviate this pressure the Government implemented a series of supports including emergency welfare payments, a wage subsidy scheme as well as a major expansion of supports in liquidity measures for businesses affected by Covid19.

I do not propose to freeze the carbon tax increase which was legislated for last year. As I have outlined, the impact of the carbon tax increase on a typical fuel bundle is moderate and financial supports are in place to protect those most exposed to fuel poverty as well as businesses who are impacted by Covid19

Topic – Mortgage

FIN/COVID/5.571/20 by Johnny Mythen T.D. To ask the Minister for Finance if he is aware that a bank (details supplied) has withdrawn mortgage approval from applicants where they are in receipt of the Wage Subsidy Scheme as a result of Covid- 19 however, they have not had a loss in income, if he will investigate this and what advice is available for people

As the Deputy will be aware both myself and my officials 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. 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.

The Wage Subsidy Scheme is one of the main tools with which we are protecting the income of employees who otherwise would not be working and it is my hope it will be a major boost in saving the businesses for which they work. However, whilst I acknowledge the seriousness of the issue you have raised and its impact on those affected, what I cannot do is mandate how temporary payments received under the Wage Subsidy Scheme are treated in lending sustainability evaluations by regulators and lenders.

The banking crisis we faced over ten years ago was fuelled by unsustainable lending. There are now thankfully far firmer regulatory controls and restrictions on lenders. Speaking on this particular issue, on 7 May the Governor of the Central Bank publicly noted that if an individual borrower’s circumstances have changed such that doubt is cast over the sustainability of potential borrowing, it is in the best interests of the borrower and the bank if the situation is reviewed.

Furthermore as Minister for Finance I cannot mandate or overrule the internal risk assessment processes in any bank, even one in which the State has a 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. The AIB Relationship Framework can be found here: https://www.gov.ie/en/publication/597d15-aib-relationship- framework-agreement-june-2017/

Officials in my Department contacted AIB Group and were advised of the following:

“EBS is actively engaging with all customers who have applied for a mortgage with the bank. We are closely monitoring the impact of Covid-19 on our customers. EBS is required to complete a responsible and prudent assessment of all applications from the borrower’s and the lender’s perspective.

Existing mortgage approvals (Approval in Principle – AIPs) are unaffected by Covid-19 (amount/rate/term etc.).

When customers wish to progress to the loan offer stage, we are obliged to understand their current financial circumstances, as our primary concern is to do what is right for our customers, in the short and long term.

Where a customer has been adversely impacted by Covid-19, and there are concerns about their longer term income to service the mortgage, it may not be in the customer’s best interest to proceed with the application at this time. The bank will engage with those customers individually over the coming months and deal with each one on a case by case basis.”

Topic – Measures Introduced

FIN/COVID/5.019/20 by Michael McGrath T.D. To ask the Minister for Finance to outline in tabular form each of the measures introduced by his Department as a result of COVID-19, the expected cost of each measure, the current deadline for each measure, the legal provisions authorising the measure, the mechanisms required to extend the deadline of each measure and if he will make a statement on the matter.

I am advised by Revenue, that in addition to the Temporary Wage Subsidy Scheme (TWSS) introduced by my Department and enacted under Section 28 of the Emergency Measures in the Public Interest (Covid-19) Act 2020, the following measures have been introduced by Revenue. All measures introduced as a result of COVID-19 are outlined below along with the expected cost of each measure (where applicable), the current deadline for each measure and the mechanisms required to extend the deadline. Further details on each of these measures and some clarifications in respect of existing measures which are relevant can be found on the Revenue website at the following link: https://www.revenue.ie/en/corporate/communications/covid19/index.aspx

In addition to these measures, I announced on 2 May that Revenue will warehouse VAT and Payroll debt for businesses, which arose during the crisis, for a period of 12 months from when the business resumes operations. Thereafter the business will be able to get a phased payment arrangement at a significantly reduced interest rate. These arrangements will be made by Revenue on an administrative basis until such time as legislation governing these arrangements is put in place. These additional measures have been introduced as a result of discussions between my Department and Revenue in the context of working towards the recovery phase of COVID-19 and specifically how businesses can be supported in that recovery phase.

Measure Introduced Expected Current Legal Mechanism Cost Deadline Provisions required to authorising the extend the measure deadline Temporary Wage Subsidy €838 No specific Section 28 of The Act provides Scheme million to 8 deadline. the Emergency under section May The scheme Measures in 28(20) that the is operable the Public Minister will from 26 Interest (Covid- determine a day March 2020 19) Act 2020 for the Scheme and will end to expire. on such day

as the Minister for Finance determines and specifies in an order. All debt enforcement Suspension No current Section 849 No current activity suspended until may have a deadline— Taxes deadline—this further notice temporary the need for Consolidation administrative cash-flow this measure Act 1997 (Taxes measure will be impact but will be kept under care and kept under expected under management of review. to be cost review. Revenue neutral Commissioners) overall. Current tax clearance status May have a No current Section 849 No current remains in place for all temporary deadline— TCA 1997 deadline—this businesses over the coming cash-flow the need for administrative months impact but this measure measure will be expected will be kept kept under to be cost under review. neutral review. overall. Suspension of interest on May have a May 2020 Section 849 An extension late payments for SMEs in temporary TCA 1997 would require a respect of January/February cash-flow specific and March/April VAT impact but announcement liabilities as well as expected by Revenue, February, March and April to be cost extending this PAYE (Employers) liabilities neutral administrative overall. measure. Non-SME businesses that May have a None Section 849 Not required have temporary cash flow temporary TCA 1997 or trading difficulties can cash-flow contact the Collector- impact but General’s Office for expected agreement to temporarily to be cost defer payments or neutral negotiate a payment overall. arrangement. Availability of an online May have a None Section 849 Not required phased payment facility, on temporary TCA 1997 a 24/7 basis through the cash-flow Revenue Online Service impact but (ROS). This facility affords expected businesses considerable to be cost flexibility to self-manage neutral their tax payment schedule overall. in line with their operating needs or temporary cash flow challenges. For

example, a taxpayer may opt to defer a payment in the phased arrangement or apply to suspend the arrangement for up to six months. Prioritising the processing May have a None Not required Not required of tax repayments/refunds temporary cash-flow impact but expected to be cost neutral overall. Following a request from Data are 31 July 2020, Temporary An extension the Minister for Finance, not subject to concessionary would require a Revenue will allow the available at review. measure specific application of the zero rate present to announcement of VAT to the supply to, and estimate by Revenue, intra-community cost. extending this acquisition by, the HSE, administrative hospitals and other health measure. care settings of personal protection and specified medical equipment for use in the treatment of patients with Covid-19 Relief from the payment of €5 million Importations EU Commission The Commission import duties and VAT for made from Decision (EU) will review in goods imported to combat 30 January 2020/491 of 3 advance of 31 Covid-19 2020 until April 2020 July, in 31 July 2020 consultation with the Member States. All VRT registration and May have a Until NCT Statutory None required. export appointments in the temporary services Instrument No. National Car Testing cash-flow resume 318 of 1992, Service (NCT) Centres have impact but Vehicle been cancelled from 28 expected Registration March 2020 until further to be cost and Taxation notice. Customers will not neutral Regulations be charged additional VRT overall. 1992, as a penalty at registration if regulation 21. they had an appointment scheduled during the period when the NCT Centres are closed or cannot get an appointment due to the closure and exceed the 30- day period.

Where a Corporation Tax May have a No current Section 849 No current Return (Form CT1) relating temporary deadline— TCA 1997 deadline—this to an accounting period cash-flow the need for administrative ending June 2019 onwards impact but this measure measure will be (and due from 23 March expected will be kept kept under 2020 onwards) is filed late to be cost under review. because of Covid-19 neutral review. circumstances, restrictions overall. on the use of certain reliefs (such as loss relief), which would normally apply where a return is filed late, will not be applied. Where iXBRL accounts No No current Section 849 No current which were due to be filed Exchequer deadline— TCA 1997 deadline— the in March 2020 and are filed cost the need for need for this late because of COVID-19 implication. this measure measure will be restrictions, the application will be kept kept under of a surcharge for the late under review. filing is suspended until review. further notice. The processing of refunds due will continue in the absence, due to the current restrictions, of the iXBRL accounts as part of the CT1 Where an individual is Data are The measure Section 849 Not applicable. present in the State and not applies for TCA 1997 The measure that presence is shown to available at so long as applies for so result from travel present to Covid-19 long as Covid-19 restrictions related to estimate travel travel Covid-19, Revenue will be cost. restrictions restrictions prepared to disregard such continue. continue. presence in the State for corporation tax purposes for a company in relation to which the individual is an employee, director, service provider or agent. In addition, and where relevant, if an individual is present in another jurisdiction as a result of COVID-related travel restrictions, and would otherwise have been present in the State, Revenue will be prepared to disregard such presence outside the State for the same purposes.

The Form IU (3e) “De No The deadline Section 849 An extension Minimis” Election on behalf Exchequer for filing was TCA 1997 would require a of investment undertakings cost extended to specific was due on 31 March implication. 30 June announcement 2020. The deadline for 2020. by Revenue, filing was extended to 30 extending this June 2020. administrative measure. Nine-month extension to May have a No current Section 849 No current the 18-month period (from temporary deadline— TCA 1997 deadline— the the end of an accounting cash-flow the need for need for this period) in which a close impact but this measure measure will be company must make a expected will be kept kept under distribution to avoid close to be cost under review company surcharges under neutral review. TCA sections 440 and 441 overall. on relevant undistributed income. The extension can be requested for accounting periods ending on or after 30 September 2018 to defer distributions due from 31 March 2020 onwards. Where a company is due a May have a Measure Section 849 An extension payable credit in 2020, temporary applies to TCA 1997 would require a Revenue will expedite the cash-flow R&D tax specific payment of any instalment impact but credit announcement of the excess Research and expected instalments by Revenue, Development (R&D) Tax to be cost due to be extending this Credit that is due to be paid neutral paid in administrative in 2020, bringing forward overall. 2020— measure. the payment in advance of the current the date provided by deadline is legislation. 31/12/2020. To accelerate interim May have a No current Section 849 No current refunds of Professional temporary deadline— TCA 1997 deadline— the Services Withholding Tax cash-flow the need for need for this (PSWT) during the Covid-19 impact but this measure measure will be pandemic, Revenue will expected will be kept kept under accept interim refund to be cost under review claims via MyEnquiries neutral review. where legible copies of the overall. original F45 and F50 documents are attached. Where the relevant Form No No current Section 849 No current F45 which details the PSWT Exchequer deadline— TCA 1997 deadline— the withheld cannot be issued cost the need for need for this to the specified person due implication. this measure measure will be solely to Covid-19 will be kept kept under circumstances then, for the under review. purposes of attachment to a review.

MyEnquiries refund claim, a written statement issued by the accountable person to the specified person setting out the required information will be accepted in place of an F45 form

PAYE Dispensation No No current None-- 30-day No current Applications: Exchequer deadline— notification is a deadline— the Revenue will not strictly cost the need for non-statutory need for this enforce the 30-day implication. this measure administrative measure will be notification requirement for will be kept requirement. kept under PAYE dispensations under review. applicable to short term review business travellers from countries with which Ireland has a double taxation treaty who are going to spend in excess of 60 workdays in the State in a tax year. Foreign Employments -- Data are The measure Section 849 Not applicable. Operation of PAYE: not applies for TCA 1997 The measure Revenue will not seek to available at so long as applies for so enforce Irish payroll present to Covid-19 long as Covid-19 obligations for foreign estimate travel travel employers in genuine cases cost. restrictions restrictions where an employee was continue. continue. working abroad for a foreign entity prior to Covid-19 but relocates temporarily to the State as a result of Covid-19 restrictions and performs duties for his or her foreign employer while in the State. Multi-State workers: Data are The measure Section 849 An extension A foreign employer may not applies for TCA 1997 would require a continue to operate Irish available at so long as specific payroll on the basis of a present to Covid-19 announcement non-resident employee’s estimate travel by Revenue, established work pattern cost. restrictions extending this pre-COVID-19 provided continue. administrative certain conditions are met. measure. PAYE Exclusion Order: PAYE Data are The measure Section 849 An extension exclusion orders for not applies for TCA 1997 would require a employees who are working available at so long as specific abroad for a foreign present to Covid-19 announcement employer under an Irish travel by Revenue,

contract of employment will estimate restrictions extending this not be impacted where the cost. continue. administrative employee works more than measure. 30 days in the State due to COVID-19. Local property tax: May have a 21 May None required An extension For property owners who temporary 2020 – would require a opted to pay their LPT for cash-flow administrative specific 2020 by Annual Debit impact but arrangement announcement Instruction or Single Debit expected by Revenue, Authority payment, the to be cost extending this deduction date has been neutral administrative changed from 21 March overall. measure. 2020 to 21 May 2020. Real-time foreign tax credit May have a Applies to all The suspended None required. (FTC) for Restricted Stock temporary relevant deadline was Unit (RSU) cases: In respect cash-flow 2019 Irish part of an of 2019 cases for which real- impact but tax returns administrative time foreign tax credits expected which are arrangement to were provided through the to be cost due to be give FTC relief payroll, the 31 March 2020 neutral filed by 31 to taxpayers filing deadline will be overall. October earlier. suspended and will revert 2020 or the to the standard income tax extended filing date filing deadline as appropriate. Share scheme filing No Applies to all Section 849 An extension obligations: The filing Exchequer 2019 share TCA 1997 would require a deadline for all 2019 share cost scheme specific scheme returns is being implication. returns. announcement extended from 31 March by Revenue, 2020 to 30 June 2020. extending this administrative measure. Transborder workers relief: No Applies for Section 849 An extension If employees are required to Exchequer the period TCA 1997 would require a work from home in the cost of the specific State due to Covid-19, such implication. COVID-19 announcement days spent in the State restrictions by Revenue, working at home will not extending this preclude an individual from administrative being entitled to claim this measure. relief, provided all other conditions are met. Residence rules – Force No Applies for None. None required. Majeure circumstances: Exchequer the period Interpretation Interpretation Where a departure from the cost of the matter. matter. State is prevented due to implication. COVID-19 Covid-19, Revenue will restrictions consider this ‘force

majeure’ for the purpose of establishing an individual's tax residence position. No benefit-in-kind on Data are Applies for Section 849 No current reimbursements by an not the period TCA 1997 deadline— the employer to an employee available at of the need for this regarding holiday/flight present to COVID-19 measure will be cancellations or in relation estimate restrictions kept under to costs of assisting cost. review employees returning to the State subject to conditions being met Where an employee has an Data are Applies for Section 849 No current employer-provided car or not the period TCA 1997 deadline— the van and limited business available at of the need for this mileage is undertaken present to COVID-19 measure will be during the Covid-19 crisis estimate restrictions. kept under and limited personal cost. review mileage is undertaken, the amount of business mileage travelled in January 2020 may be used as a base month for the purposes of calculating the amount of benefit-in-kind due. During the COVID-19 crisis, Data are Applies for Section 849 No current employees working in the not the period TCA 1997 deadline— the motor industry who have available at of the need for this availed of the special cash present to COVID-19 measure will be equivalents for calculating estimate restrictions. kept under benefit-in-kind on company cost. review. cars from January 2020 and who, due to current restrictions, are unable to change their vehicle within the required timeframe may continue to utilise the cash equivalents. Where an employer pays Data are Applies for Section 849 No current for a taxi to transport an not the period TCA 1997 deadline— the employee to or from work available at of the need for this due to health and safety present to COVID-19 measure will be concerns, benefit-in-kind estimate restrictions. kept under will not apply for the cost. review. duration of the COVID-19 period only. Section 112B of the Taxes Data are Applies for Section 849 No current Consolidation Act 1997 not the period TCA 1997 deadline— the allows one voucher per year available at of the need for this up to the value of €500 to present to COVID-19 measure will be be given to an employee by restrictions.

his or her employer tax free. estimate kept under Section 112B (1) (d) which cost. review. restricts the award to one voucher per year is concessionally waived for the 2020 tax year, where the additional award is related to an employee's exceptional efforts during the Covid19 crisis. Due to health and safety Data are Applies for Section 849 No current concerns arising from not the period TCA 1997 deadline— the Covid-19, an employee may available at of the need for this be provided with present to COVID-19 measure will be temporary accommodation estimate restrictions. kept under by his or her employer to cost. review. mitigate against potential transmission risks. Revenue are prepared to accept that no charge to benefit-in-kind will arise during the period of the COVID-19 crisis on employer-provided temporary accommodation in certain circumstances. The 90-day employer filing No Applies in Section 849 An extension obligation, which is a Exchequer respect of TCA 1997 would require a requirement for an cost employer specific employee to be eligible to implication. filing announcement benefit from SARP (Special obligations by Revenue, Assignee Relief Programme) for the extending this relief, is extended for a period of administrative further 60 days. It is the COVID- measure. anticipated that such an 19 extension should provide restrictions. sufficient time for employers to file the required return, but exceptional cases may be submitted to Revenue for consideration on a case by case basis. Where an employer pays No Applies for Section 849 An extension the cost of retraining an Exchequer the period TCA 1997 would require a employee as part of a cost of the specific redundancy package, the implication. COVID-19 announcement cost of retraining up to a restrictions. by Revenue, maximum of €5,000 is extending this exempt from income tax administrative provided a number of measure. conditions are satisfied.

One such condition is that the retraining is completed within 6 months of the termination of employment. Having regard to Covid-19 restrictions, Revenue is willing to extend this exemption once the retraining takes place within 6 months of the required course/training becoming available following the end of the Covid-19 crisis. The collection of stamp duty May have a 1 July 2020 Section 124 of None required on credit cards has been temporary Stamp duties deferred until 1 July 2020. cash-flow Consolidation Generally, financial impact but Act, 1999. institutions collect the expected stamp duty from credit card to be cost accounts on 1 April each neutral year. The stamp duty due overall. on credit cards is €30 per year per credit card account.

Refocused Ireland Strategic No No Not required Not required Investment Fund (ISIF) Exchequer deadlines Investment Policy to cost establish a €2 billion implication Pandemic Stabilisation and as using Recovery Fund to provide existing ISIF investment in Medium and funds. Large Enterprises.

I would also advise the Deputy that my Department has been active in other areas, for instance the insurance sector, where it has prompted industry to take a number of initiatives to benefit policyholders.

In addition, I requested that the banking industry increase the limit on contactless payments from €30 to €50. The new limit of €50 is the maximum allowed under the revised Payment Services Directive. There was no legislative change required to introduce the increased limit.

Finally, and as regards measures taken within my Department itself, the Deputy may wish to note that circa 90-95% of staff are working or otherwise at home on any given day. The small number of staff attending the office do so on an “as needed” basis only. My Department also released 39 members of staff for redeployment to assist other Departments and organisations with the COVID- 19 crisis

Topic – Measures Introduced

FIN/COVID/5.702/20 by Michael McGrathT.D. To ask the Minister for Finance to outline the total number of Covid-19 measures in tabular form, the expected cost to the Exchequer for each measure and if he will make a statement on the matter

The Government published its Draft Stability Programme Update (SPU) on 21st April. This set out an updated economic and fiscal scenario, for this year and next, incorporating the impact of the Covid-19 pandemic and the adopted policy responses to support households and employees. Table 1 in the Draft SPU listed the main policy measures responses listed by sector, to the value of €6.8 billion. The final version of the SPU was formally submitted to the European Commission and the European Council on 30th April, in line with legislative requirements.

On 2nd May the Government adopted a further suite of measures focused on the business sector. Some of these measures will require legislation to be enacted, which will be a matter for the next Government. The total value of these additional business support measures is €6.5 billion.

The measures announced by Government to-date encompass a whole suite of supports, including inter alia direct Exchequer funding; loan guarantees; tax deferrals; waivers; and equity investment. A list of the main policy measures introduced by Government is available on the Department of Finance website.

The table below lists in tabular form the supports that have a direct Exchequer cost.

Table: Covid-19 response measures, Exchequer cost, € billion

Date Measures € billion

1. employee supports^ 4.5

09-Mar Self-isolation unemployment benefit; sick pay for self-isolation

24-Mar Wage subsidy scheme; pandemic unemployment benefit

2. business supports 09/03/2020 Liquidity funding for affected businesses ^^ 0.25 09/04/2020 02-May Arrangements for Accumulated Tax Liabilities (legislation required) ^^^ 2 02-May Increased Credit Guarantee Scheme (legislation required) ^^^^ tbd 02-May Waiving of commercial rates for businesses closed due to public health requirements (3 months) 0.26

02-May Reconnection Fund for micro and small businesses 0.25

3. health sector supports 2

09-Mar Improving capacity, increasing staffing, overtime

25-Mar Securing capacity of private hospitals

07-Apr Additional funding (Covid-19 Action Plan) and supports for nursing homes

Total Exchequer cost (2020) 9.3

^ Estimated level of expenditure across all schemes over the 12-week period beginning on March 26th ^^ Exchequer funding of c. €¼ billion will support liquidity measures of approximately €1 billion ^^^ The warehousing of tax liabilities represents a 2020 Exchequer cost only. Warehoused liabilities will be payable in 2021 ^^^^ The CGS will provide up to €2 billion in funding for eligible businesses. The ultimate cost to the Exchequer will be dependent on take-up and operation of the scheme Rounding may affect totals. Source: calculations by Departments of Finance and Public Expenditure and Reform

Topic – Measures Introduced

FIN/COVID/5.701/20 by Michael McGrathT.D. To ask the Minister for Finance the expected cost to the Exchequer of all the initiatives announced on 2 May 2020, the updated figures for the General Government Balance (both as a percentage and in monetary terms), National Debt, Debt to GDP and other metrics as a consequence of these measures and if he will make a statement on the matter

The Government published its Draft Stability Programme Update (SPU) on 21 April. This set out an updated economic and fiscal scenario, for this year and next, incorporating the impact of the Covid- 19 pandemic and the adopted policy responses to support households and employees.

The final version of the SPU was formally submitted to the European Commission and the European Council on 30th April, in line with legislative requirements.

On 2nd May the Government adopted a further suite of measures focussed on the business sector. Some of these measures will require legislation to be enacted, which will be a matter for the next Government. The total amount of these additional business support measures is €6.5 billion.

From a statistical perspective some of these measures will be subject to accrual and others will be financial transactions, therefore the impact on the general government balance will differ. The Credit Guarantee Scheme will be a contingent liability rather than an actual liability. The table below sets out the potential impact of these measures in nominal terms.

Table: business supports announced on 2 May, € billion

amount cost ggb ggd

Pandemic Stabilisation and Recovery Fund, within the 2.0 0 0 0 Ireland Strategic Investment Fund^ Covid-19 Credit Guarantee Scheme^^ 2.0 tbd 0 0 Warehousing of tax liabilities^^^ 2.0 0 0 up to 2.0 Commercial rates waiver (3 months)^^^^ 0.26 0.26 -0.26 up to 0.26 Restart grants for micro and small businesses^^^^^ 0.25 0.25 -0.25 up to 0.25

^ This will make use of ISIF’s readily available capital and invest on a commercial basis. ^^ No immediate general government impact, however this will represent a contingent liability. Costs will be dependent on the particulars of the loan originations – risk profile, term length. ^^^ Deferral of tax liabilities will create an initial Exchequer shortfall this year which would be expected to be made up next year as payments resume. In effect the State is lending €2 billion to affected businesses. As general government is on an accrual basis this should have no impact on the ggb either this year or next. There may be a debt impact to the extent that the cash shortfall to the Exchequer requires funding. ^^^^ Waiving of commercial rates results in lower gg revenue. As the Exchequer will meet the shortfall additional borrowing may be required in the absence of off-setting savings elsewhere. ^^^^^ Grants will be counted as general government expenditure. Any additional borrowing required to fund this will increase the general government debt. Source: calculations by Departments of Finance and Public Expenditure and Reform

Should the full amount of the last three measures in the table above require debt issuance, the debt to GDP ratio would increase by approximately 0.8 percentage points.

Topic – Pandemic Stabilisation and Recovery Fund

FIN/COVID/5.681/20 by Pearse Doherty T.D.

To ask the Minister for Finance the interest rates that will apply to loans approved and drawn down under the €2 billion Pandemic Stabilisation and Recovery Fund, and if he will make a statement on the matter;

FIN/COVID/5.689/20 by Pearse Doherty T.D. The interest rates that will apply to loans approved and drawn down under the €2 billion Pandemic Stabilisation and Recovery Fund, and if he will make a statement on the matter;

Consistent with the ISIF mandate to deliver a commercial return and economic impact, any loans made under the Pandemic Stabilisation and Recovery Fund (PSRF) will be priced at commercial market rates, as appropriate to the risk of the loan being offered.

The PSRF will be able to offer a range of investment products, not just loans, as best suits the needs of the underlying business. Each situation will be assessed on its own merits, and the decision as to whether debt, equity or some hybrid instrument is most appropriate, along with pricing of the capital, will be determined based on the specific details of each situation.

Topic – Temporary Wage Subsidy Scheme

FIN/COVID/5.262/20 by Marc Ó Cathasaigh T.D. To ask the Minister for Finance if he can clarify whether a business must be closed in order to be eligible for the payment in the case of workers who has been offered a monthly ‘top-up’ on their Temporary Wage Subsidy Scheme payment if they continue to work in the company concerned

The position is that it is not a requirement that businesses must be closed in order to avail of the TWSS but they do need to be able to demonstrate that their business is suffering significant negative economic impact due to the pandemic.

The Government’s priority in so far as the Temporary Wages Subsidy Scheme (TWSS) is concerned was and is to ensure that all employers experiencing significant negative economic disruption from COVID-19 can register for and start to receive payment quickly. The overarching ambition of the scheme is to ensure that the key relationship between employers and employees is maintained to the greatest extent possible so that businesses can restart operations quickly once the crisis has passed. Furthermore, the scheme is available to eligible employers across all sectors, excluding the Public Service and Non-Commercial Semi-State Sector. This includes businesses that have closed due to the Covid-19 restrictions and those that continue to operate and employ their workforce.

In the context of the compelling need for immediate implementation of the TWSS, the scheme necessarily had to build on data returned to Revenue through its real-time PAYE system. The key conditions of the scheme, as prescribed in the underlying law, 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, in general, 15 March 2020, but extended recently to 31 March 2020.

Topic – Licences for Pubic Houses

FIN/COVID/5.228/20 by Sean Fleming T.D. To ask the Minister for Finance outline the situation regarding licences for pubic houses to be extended that are due to expire in August 2020 in view of the fact that they have been closed for a considerable period of time and if the Minister will make a statement on the matter

I am advised by Revenue that its function in relation to liquor licences, including pub licences, is limited to the issue of the annual licence on presentation of the appropriate court authorisation, tax clearance and payment of the duty on the licence. A policy decision to extend the current licensing period or not to require a current licence for a period after 30 September in respect of a premises licenced up to 30 September is primarily a matter for the Department of Justice and Equality and enforcement of such a decision would be a matter for An Garda Siochana. The Deputy will be aware that An Garda Siochana and the public may object to the renewal of a licence and the extension of the licensing period would delay this possibility.

Revenue will issue licences for the next licensing year whenever that commences; at present the next licensing year is scheduled to commence on 1 October 2020

Topic – Temporary Wage Support Scheme

FIN/COVID/5.226/20 by Paul Murphy T.D. To ask the Minister for Finance if he will instruct the Revenue to provide a helpline for employees who are being paid under the Covid-19 Temporary Wage Support Scheme – to explain differences in pay and the manner in which employers are deciding on pay; and to accept enquiries as to whether employers are eligible to claim the TWSS.

As the Deputy is aware I am not in a position to instruct Revenue in how it runs its operations. I am advised by Revenue that it is not possible to operate its Employees National Helpline at this time due to the COVID-19 restrictions.

Revenue is, however, providing a full service for employees, including in respect of the Temporary Wage Subsidy Scheme (TWSS), through its MyEnquiries service, which is available at link; www.ros.ie/myaccount-web/sign_in.html?execution=e1s1. I am assured that this service is operating very efficiently and is prompt in responding to queries from employees. Revenue has also published detailed information for employees regarding the TWSS on its website at link: www.revenue.ie/en/corporate/communications/documents/twss-guidance-for-paye- employees.pdf and this guidance is updated as the scheme evolves.

Revenue has confirmed to me that it will shortly provide employees with an online lookup facility through its MyAccount service that will allow them to view the TWSS amounts that were paid to employers on their behalf. This will give additional assurance to employees, in addition to the statutory requirement for employers to provide the TWSS related payment information on payslips, that the scheme is being operated correctly in respect of their individual entitlements.

It is also important to note that the subsidy scheme provides a subsidy to an employer based on the level of pre-pandemic wages as reported to Revenue through the PAYE system and the level of pay, if any, by the employer during the crisis. Revenue has no role in relation to the level of pay paid by the employer or the terms and conditions applicable to the employment.

Revenue has also published very detailed information regarding the TWSS on its website at link; www.revenue.ie/en/corporate/communications/covid19/temporary-covid-19-wage-subsidy- scheme.aspx. This information includes guidance on the eligibility criteria for the scheme and a comprehensive set of Frequently Asked Questions (FAQ), that are regularly updated as the TWSS evolves.

Finally, I wish to commend Revenue for the speed at which the TWSS was implemented to assist Government in providing the necessary supports to employers and employees during the current pandemic.

Topic – Temporary Wage Subsidy Scheme (TWSS)

FIN/COVID/5.025/20 by Michael McGrath T.D. To ask the Minister for Finance resolve the deeply discriminatory exclusion of women returning from maternity leave from the Temporary Wage Subsidy Scheme?

FIN/COVID/5.025a/20 by Gary Gannon T.D. To ask the Minister for Finance to resolve the deeply discriminatory exclusion of women returning from maternity leave from the Temporary Wage Subsidy Scheme?

I propose to take Question Nos 5.025/20 and 5.025A/20 together. The Temporary Wage Subsidy Scheme (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 were developed quickly, having regard to the 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. It must be accepted that the TWSS simply cannot be adapted to meet the particular circumstances of individual employers or employees.

The latter two conditions were particularly designed with a view to preventing abuse of the scheme. 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, conditions and entitlements of the employment are concerned.

Accordingly, it follows 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, or returned to the payroll of his or her employer after that date following a period of unpaid leave, whether maternity leave or otherwise, he or she does not meet the eligibility criteria with the employer as he or she would not have been on the employer’s payroll at that date.

The question of an individual’s entitlements in an employment context following his or her resumption of duty after a period of unpaid leave, and the question of what wages an employer may or may not be in a position to pay such an employee in the light of the impact of the Covid-19 pandemic on the employer’s business, are matters that are outside the remit of the TWSS. Those employees who are laid off following such a resumption of duty would be entitled to claim the Pandemic Unemployment Payment from the Department of Employment Affairs and Social Protection

Topic – Temporary Wage Subsidy Scheme (TWSS)

FIN/COVID/5.655/20 by Ruairi O’Murchu T.D. To ask the Minister for Finance if he is aware of an apparent anomaly where a female worker on maternity leave on February 29 2020 (details supplied) is not entitled to avail of the Temporary Wage Subsidy Scheme, despite the updated guidelines in V8 of the scheme, paragraph 4.6 which states: “What if an employee was not paid their usual pay in January or February 2020? There can be cases where an employee was in employment but who did not receive normal pay in January or February 2020, such as reduced pay, maternity leave, illness benefit or off-pay leave. In such cases the employer can either operate the scheme based on Average Revenue Net Weekly Pay or pay the employee the appropriate wages without receiving a subsidy refund

The Temporary Wage Subsidy Scheme (TWSS) was legislated for in section 28 of the recently enacted Emergency Measures in the Public Interest (Covid-19) Act 2020. Of necessity, the underlying legislation and the scheme itself were developed quickly, having regard to the 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. It must be accepted that the TWSS simply cannot be adapted to meet the particular circumstances of individual employers or employees.

The wage subsidy per employee is calculated based on the net pay reported for January and February 2020. The scheme has no role in relation to the employer/employee relationship in so far as terms, conditions and entitlements of the employment are concerned.

Revenue guidance highlights that there can be situations where an employee did not receive normal pay in January or February 2020 whereby, he or she may have been on maternity leave, reduced pay, illness benefit or even off-pay for some of that period. The guidance further explains that in such cases the employer can operate the TWSS based on the Average Revenue Net Weekly Pay (ARNWP). For clarity, I confirmed in my recent determination letter to Revenue, that for the purposes of the operation of the scheme, the ARNWP is the employee’s Average Net Weekly Pay for January and February 2020 based on payroll submissions made to the Revenue Commissioners by the employer.

The Deputy will be aware that I cannot comment on any specific employee that may have been mentioned in information supplied with a question. However, 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, or returned to the payroll of his or her employer after that date following a period of unpaid leave, whether maternity leave or otherwise, he or she does not meet the eligibility criteria with the employer as he or she would not have been on the employer’s payroll at that date.

Topic – Temporary Wage Subsidy Scheme (TWSS)

FIN/COVID/5.088/20 by Sean Haughey T.D. To ask the Minister for Finance if he will request that the Revenue Commissioners pay the Covid-19 Wage Subsidy Scheme to a business (details supplied); if the decision not to pay this benefit on the basis of a technical amendment been made to salaries by this business in March 2020 can be reconsidered; and if he will make a statement on the matter.

I am advised by Revenue that the business in question could not previously access the Temporary Wage Subsidy Scheme (TWSS) because it did not complete a payroll submission for February 2020 before the 15 March 2020 deadline in accordance with the legislation that governs the scheme. However, the company can now access the scheme under revised criteria, which were recently introduced by Revenue under its care and management provisions.

Revenue has also advised me that in making an application for TWSS payments, the business should ensure eligible employees are set to the J9 PRSI class on future payroll submissions. The revised concessions are not available on a retrospective basis for previous payroll periods.

Topic – Temporary Wage Subsidy Scheme (TWSS)

FIN/COVID/5.259/20 by Marc Ó CathasaighT.D. To ask the Minister for Finance in relation to the Covid-19 Wage Subsidy scheme whether he intends to ensure that people who started a new job in the first week of March (and therefore were employed during January and February but with a different organisation) and are on their organisation's payroll before the 15th March deadline for payroll submission to Revenue referenced in the guidelines are covered under the scheme, given that this is effectively penalising someone who has been in continuous employment or changing jobs during a very small window;

The Temporary Wage Subsidy Scheme (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 were developed very quickly, having regard to the 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. 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.

Accordingly, it follows 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 employer as he or she would not have been on the employer’s payroll at that date

Topic – Temporary Wage Subsidy Scheme (TWSS)

FIN/COVID/5.094/20 by Imelda Munster T.D.

To ask the Minister for Finance, I have been contacted by a constituent who was being paid 70% of his wages through the Temporary Wage Subsidy Scheme and 10% by his employer when he was laid off at lockdown because of Covid-19.

However he is now back at work but is still being paid through the temporary wage subsidy scheme and I would be obliged if you could advise what the protocol is for when an employee returns to work who was being paid through this scheme

The Temporary Wages Subsidy Scheme (TWSS) is designed to ensure that the key relationship between employers and employees is maintained to the greatest extent possible so that businesses can restart operations quickly once the crisis has passed. The scheme is available to eligible employers across all sectors, excluding the Public Service and Non-Commercial Semi-State Sector. This includes businesses that have closed due to the Covid-19 restrictions and those that continue to operate and employ their workforce.

The TWSS can only operate in respect of an employee, whether full-time or part-time, who was on the payroll of the relevant employer as at 29 February 2020. The subsidy is calculated based on the net pay reported for January and February 2020 and there is no requirement for employers to pro rata the subsidy based on whether the employee is temporarily laid off or working full or part time. Therefore, when an eligible employee returns to work after a period of being laid-off, he or she will continue to receive the wage subsidy payment as calculated based on the net pay reported for January and February.

Topic – Tax Liabilities

FIN/COVID/5.370/20 by Michael McGrath T.D. To ask the Minister for Finance in respect of the announcement regarding the possible warehousing of certain liabilities, to set out the tax heads that this will apply to; to confirm when it will come into effect; and if he will make a statement on the matter

FIN/COVID/5.707/20 by Michael McGrath T.D. To ask the Minister for Finance when the 'warehousing' of tax liabilities will be up and running, whether it requires primary legislation to establish it, the expected cost to the Exchequer, whether this measure requires State Aid approval and if he will make a statement on the matter

I propose answering questions 5.370/20 and 5.707/20 together.

I am advised by Revenue that the effective “warehousing” of VAT and PAYE (Employer) liabilities is currently operational. In March this year, Revenue announced that it was suspending debt collection and the charging of interest on late payment for the January/February and March/April 2020 VAT periods and the February, March and April 2020 PAYE (Employer) periods. On 7 May 2020, Revenue announced the extension of these arrangements to include the May/June 2020 VAT period and May and June 2020 PAYE (Employer) liabilities.

The warehousing scheme is available to businesses severely impacted by Covid-19 who have experienced a significant drop in turnover and been unable to pay their VAT and employer PAYE liabilities in part or in full.

These measures are being operated by Revenue on an administrative basis under the care and management provisions of the Taxes Consolidation Act 1997. However, primary legislation will be required to put the measures on a statutory footing and to provide for the appropriate rate of interest to be changed on the warehoused debts, namely:

• 0% for the “Covid-19 restricted trading phase”, the period when the business is unable to trade due to the Covid-19 related restrictions, and including the first two months after the business resumes “normal” trading; • 0% for the “zero interest” phase, which last for 12 months after the end of the first phase; • 3% per annum for the “reduced interest phase”, which begins after the end of the second phase.

The necessary legislative amendments to the PAYE provisions of the Taxes Consolidation Act and the Value Added Tax Consolidation Act 2010 will be brought forward in due course.

The expected total cost of the introduction of these measures is currently unknown. Deferred payments of €800 million in March and €460 million in April have already been recorded by Revenue under the tax forbearance arrangements mentioned above. The warehousing of tax debts will enable companies to stay in business and individuals to remain in employment. The measures will therefore assist in the generation of tax revenues which the State would not receive if the measures were not introduced, as businesses would inevitably close with resultant significant loss of employment.

I am advised that as the warehousing of deferred tax debts is a measure applicable to all undertakings regarding tax forbearance and therefore comes under those measures set out by the European Commission in “Communication from the Commission: Amendment to the Temporary Framework for State aid measures to support the economy in the current Covid-19 outbreak” [C(2020) 2015], published on 3 April 2020, as deemed to be compatible with the internal market and therefore fall outside the scope of state aid.

Further information is available on Revenue’s website at https://www.revenue.ie/en/corporate/press-office/press-releases/2020/pr-020520-revenue- confirms-warehousing-of-covid-19-related-tax-debt-for-businesses.aspx

Topic – VAT

FIN/COVID/5.304/20 by Michael McGrath T.D. To ask the Minister for Finance if he has any plans to introduce a zero rate of Vat on the supply of Personal Protective Equipment associated with the battle against Covid-19 for a defined period of time and if he will make a statement on the matter

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. There is no discretion under the Directive for Ireland to apply a general zero rate of VAT to the supply of Personal Protective Equipment.

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 the delivery of COVID-19 related health care services to their patients. Revenue agreed to administer such a relief and has published guidance on the Revenue website outlining this temporary concessionary measure. It is envisaged that this concessional treatment will apply up to 31 July 2020, subject to review

Topic – Temporary Wages Subsidy Scheme (TWSS)

FIN/COVID/5.075/20 by Michael McGrath T.D.

To ask the Minister for Finance if he will address a matter raised in correspondence (details supplied) in relation to the Temporary Wage Subsidy Scheme associated with Covid-19 and if he will make a statement on the matter.

Details: Despite not being a Fianna Fail voter you have always struck me as a decent and fair politician and I urge you to raise this issue as soon as possible and give you my full permission to do so.

I am a marketing manager that has just been furloughed. My employer will not top up the payment so next month I will receive 1,500 Eur. I currently pay rent of 1,900 Eur and have two small children. My wife and her mother live with us also but are not employed.

Previously I earned 47,000 Eur per year, (about 3,200 Eur net per month), and that was just enough to pay rent, bills and provide for my family. As you can imagine due to high rents and bills I don't have any savings despite being fully employed continuously for years. I have all but given up hope of saving for a house but consoled myself that at the least I could provide for my family, and hopefully get my kids to University if I worked until 65, I am now 42.

Please explain how I am supposed to survive on 1,500 Eur. Someone else at my company was also furloughed. He is in his late twenties, has no children and lives with his parents. He will be receiving 1,900 as a furlough payment. Why is someone with considerably less expenses than me getting more?

The wage subsidy scheme tiered payments make little sense to me, those earning more get less of a subsidy and thus face a much bigger gap in income. Those earning more, who have paid plenty of tax in recent years, tend to have higher rents and expenses. The squeezed middle is being punished once again. Even just today KBC bank's April consumer sentiment survey demonstrated that those in the 35 - 54 age group were less able to cope with financial shocks due to our already considerable financial commitments. What bright spark decided that those earning more than 586Eur net per week should get less? So already having giving up hope of ever buying a house I now have to worry about homelessness and putting my 5 year old and 3 year old in god knows where, all this despite working full-time in continuous employment for the last 7 years. It is an absolute and total disgrace.

I am pretty outraged by the level of payment I will receive - please do everything you can to find out from Minister Donoghue why situations like this occur. I genuinely have no idea what I am supposed to do now to provide for my family.

The Temporary Wages Subsidy Scheme (TWSS) was legislated for in section 28 of the recently enacted Emergency Measures in the Public Interest (Covid-19) Act 2020 (The Act).

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.

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 (which date was recently extended to 31 March 2020 by Revenue concession and subject to conditions).

The TWSS is predicated on the employer wanting to keep the employees on the payroll and to retain them until business picks up. The amount of the subsidy for each employee is calculated based on the average net weekly pay reported for January and February 2020. There is no distinction made regarding the subsidy amount based on whether the business has closed due to the restrictions brought in by the Government or has continued to trade with employees continuing to work part- time or work full time with similar hours as before the Covid-19 pandemic.

The employer is expected to make best efforts to maintain the employee’s net income reflected in the average net weekly payment for January and February 2020, for the duration of the TWSS. 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.

The Act makes provision for the Minister for Finance to determine the amount of the temporary wage subsidy, with the consent of the Minister for Employment Affairs and Social Protection, given with the concurrence of the Minister for Public Expenditure and Reform, and different amounts of temporary wage subsidies may be so determined in relation to different classes of employee. On 15 April 2020, I, as Minister for Finance, announced further updates to the TWSS.

Included in those updates were changes to the scheme in the case of employees earning in excess of €586 net per week. In such cases, a tiered approach to the calculation of the wage subsidy will apply. The maximum subsidy payable is €350 per week with the tiered approach taking into account both the amount paid by the employer and the level of reduction in pay borne by the employee. The details are as follows: • A subsidy of €350 per week is payable to employees with average net weekly pay greater than €586, where the employer pays sufficient gross salary which equates to an amount up to 60% of the employee’s net weekly earnings. • A subsidy of €205 per week is payable to employees with average net weekly pay greater than €586, where the employer pays sufficient gross salary which equates to an amount that is more than 60%, but not more than 80%, of the employee’s net weekly earnings. • No subsidy is payable to employees with average net weekly pay greater than €586, where the employer pays sufficient gross salary which equates to an amount that is more than 80% of the employee’s net weekly earnings.

Revenue has confirmed that the new subsidy rates and the relevant tapering will become fully operational for payroll submissions made on or after 4 May 2020, with a pay date on or after that same date. Until 4 May 2020, the current transitional arrangements apply whereby eligible employers will receive a refund of the maximum subsidy of €410 in respect of each eligible employee, regardless of the employee’s income. However, for administrative purposes and to allow for future reconciliation of subsidy payments made, it has been recommended that employers only pay an amount equivalent to the likely final subsidy to each employee when running their payroll.

The changes announced allow the concentration of resources to protect incomes, in a proportionate way having regard to available resources, employer contribution and the broader suite of related supports put in place by the Government to support those who have been negatively impacted by the restrictions that have had to be introduced to stop the spread of the COVID-19 virus.

Topic – VAT

FIN/COVID/5.319/20 by Eamon O Cuiv T.D.

To ask the Minister for Finance why dentists were not included in the list of professions for which certain goods including PPE were temporarily zero VAT rated because of the need for these good in relation to Covid-19 in order to facilitate dental treatment and stop the spread of Covid-19; and if he will make a statement on the matter.

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 the delivery of COVID-19 related health care services to their patients. Revenue have agreed to administer such a relief and has published guidance on the Revenue website outlining this temporary concessionary measure. It is envisaged that this concessional treatment will apply up to 31 July 2020, subject to review.

The scope of the relief corresponds with the relief specified in the Commission Decision. The extension of zero rating to supplies of PPE to Dentists and indeed other sectors and businesses would require a change in legislation to define the scope of, and provide a legal basis for, the desired zero rating

Topic – Temporary Wages Subsidy Scheme (TWSS)

FIN/COVID/5.033/20 by Mick Barry T.D. To ask the Minister for Finance if measures will be taken to ensure that the 54 managers in (details supplied) who were placed on the Covid-19 Wage subsidy scheme on 31 March will be paid the funds due to them; and to make a statement on the matter.

I am advised by Revenue that by virtue of its confidentiality obligations under Section 851A of the Taxes Consolidation Act, it is precluded from commenting on the tax affairs of any particular business or taxpayer.

I am advised by Revenue that under the Temporary Wage Subsidy Scheme (TWSS) an employer is required to provide the employee with a payslip which separately identifies details of the amount of the TWSS payment.

In that context, therefore, the employees to whom the Deputy refers in his question should be able to confirm the position as regards the payments made to them.

Finally, I should mention that penalties will apply to any abuse of the subsidy scheme, including a situation where an employer does not provide the subsidy funds to the employees.

Topic – VAT

FIN/COVID/5.577/20 by Sean Crowe T.D. To ask the Minister for Finance if has he discussed with his EU colleagues any proposals to extend beyond July the temporary zero tax on importation on vital PPE

The European Commission adopted Decision C(2020)2146 on 3 April 2020, authorising Member States to grant relief to state organisations, charities and philanthropic organisations from import duties and VAT exemption on importation for goods needed to combat the effects of the COVID- 19 outbreak. The relief is scheduled to end on 31 July 2020 but there is provision for an extension if this is required following a review and consultation with Member States.

Topic – Temporary Wage Subsidy Scheme (TWSS)

FIN/COVID/5.513/20 by Mary Lou McDonald T.D. To ask the Minister for Finance if following the Revenue Commissioners announcement of the 24 April 2020 allowing access to Temporary Wage Subsidy Scheme for certain employers who missed 15 March payroll deadline if those businesses granted access to the scheme will be paid retrospectively in respect of wages paid in the intervening period of the scheme opening and their access to it

The Temporary Wage Subsidy Scheme (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.

I have been advised by Revenue that following a review of cases since the TWSS commenced, it became apparent that a number of employers have been unable to access the scheme because they failed the 15 March 2020 rule but had qualified under all other conditions of the scheme and were otherwise tax compliant. Given the overarching purpose and objective of the scheme, Revenue has decided, under its care and management provisions, to allow such employers access the scheme provided:

· the employees in respect of whom the wage subsidy is claimed were included on the employer’s payroll on 29 February 2020, · the February 2020 payroll submissions were submitted to Revenue before 1 April 2020, and · the payroll submissions for all previous months were submitted to Revenue before 15 March 2020.

Where a business qualifies for the TWSS under the revised criteria, the wage subsidies under the scheme will be payable for eligible employees in respect of payroll submissions made on or after 24 April 2020, with a pay date on or after 24 April 2020, and is not retrospective

Topic – Regional Film Development

FIN/COVID/5.367/20 by Eamon Ó Cuiv T.D. To ask the Minister for Finance whether in view of the Covid-19 pandemic he intends extending the Section 481 Regional Film Development Uplift to 2021 and beyond and if he will make a statement on the matter.

Section 481 of the Taxes Consolidation Act 1997 provides relief in the form of a corporation tax credit related to the cost of production of certain films. The scheme is intended to act as a stimulus to the creation of an indigenous film industry in the State, creating quality employment opportunities and supporting the expression of the Irish culture.

Finance Act 2018 amended the relief to provide for a short-term, tapered regional uplift for productions being made in areas designated under the State aid regional guidelines. The regional uplift will be phased out on a tiered basis with 5% available in year 1 (2019) and year 2 (2020), 3% in year 3 (2021), 2% in year 4 (2022), and reducing to 0% from year 5 on. The purpose of the regional uplift is to support the development of new, local pools of talent in areas outside the current main production hubs, to support the geographic spread of the audio-visual sector.

The Government is fully aware of the unprecedented impact that the coronavirus is having not only on the audiovisual sector, but the wider economy. In this regard a range of measures have been

introduced to provide supports to those who need it. Measures taken by the Government to support the cultural sector have focused on bringing forward the payment of grants awarded this year to ensure financial commitments can be met, waiving eligibility requirements which no longer apply due to the COVID-19 crisis and an initiative to support artistic and creative life during the COVID-19 crisis. Details of these measures may be found at the following link: https://www.chg.gov.ie/covid19-supports-for-artists/

In addition to the current supports in place, my officials are examining a range of possible measures to ensure that the economy is in a position to recover while maintaining a stable tax base, including the Deputy’s proposal for amendments to the regional uplift. In this regard the Deputy should note that, as film relief is an approved State-aid, any amendments to the scheme would require approval from the European Commission.

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