Barry Cowen (Laois-Offaly, Fianna Fail)
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The budget announced by the Minister for Finance, Deputy Michael Noonan, on 7 December provided for additional taxation receipts from the targeting of pensioners by the Revenue Commissioners, even though the initiative only emerged last week following demand letters being received by pensioners.

Fine Gael and Labour promised the people they would be upfront and honest with them at all times. In this case, the simple truth is that Fine Gael and Labour factored revenue into the budget a month ago from a planned tax compliance initiative aimed at 115,000 pensioners but failed to inform the pensioners of what was in the pipeline in the hope that their party political interests would be protected.

In the budget documents produced alongside the budget last month, the Department of Finance estimated that an extra €45 million would be collected in 2012 and €55 million in a full year arising from additional enforcement and compliance measures by the Revenue. I quote from the summary of the Estimates:

In recent years the Revenue Commissioners have sought and obtained an increase in their ability to obtain information on payments made by Government bodies and others to third parties. In addition, the Commissioners have continuously upgraded and extended the range of information they receive from the Department of Social Protection. This additional compliance activity from these new enhanced information sources allows the Commissioners to improve its collections.

While the Government has sought to hide behind the Revenue since news emerged of this initiative targeted at pensioners, the truth is that the Government factored into its budget a month ago the expected yield from the initiative. The Government made a political choice not to reveal the details of the initiative at budget time and, instead, allowed the Revenue to scare the living daylights out of thousands of pensioners around the country.

While every citizen has a duty to be fully tax compliant, the manner in which this initiative has been handled has caused widespread confusion and unnecessary fear among pensioners. The Government could have put the full information on the compliance initiative in the public domain as part of the budget to allay concerns of pensioners. That would have allowed them to be fully informed. Instead the Government decided pensioners would receive out of the blue an alarming letter from Revenue; it watched their reaction and then hid behind the same Revenue officials. The chairman of the Revenue Commissioners apologised at today's meeting of the finance committee. He acknowledged that many things could have been done differently by Revenue in its correspondence with pensioners. In recent days Revenue has met various representative bodies of those affected. We welcome this and the clarity it has brought to the matter.

It is now time to ask questions of the Government on the matter. Who in the Government thought it would be a good idea to land just after Christmas a letter on the doorsteps of 115,000 pensioners to inform them that they were not tax compliant? This was done without warning or an explanation or clarity on the approach to be taken. Who in the Government knew that this letter was coming and why did they not insist on there being a proper public information campaign before any such letters were issued? At a time when people are already concerned about how they will manage in the year ahead, terrifying them with the label "tax defaulter" shows a complete lack of empathy and understanding. Did the Revenue Commissioners inform the Minister for Finance, Deputy Michael Noonan, that the mailshot was about to be issued? If so, why did he not believe it was necessary to inform those who would be affected and if not, why not?

Deputies:

I am replying on behalf of the Minister for Social Protection, Deputy Joan Burton.

Deputies:

In recent years the Department of Social Protection has been actively engaged in data matching with other Departments and public bodies for control purposes. To this end, an extensive legal structure is in place to support the sharing of data for the purposes of controlling the entitlement to and payment of benefits. The legislative provisions that allow for the specific sharing of data with the Revenue Commissioners and other Departments and agencies are contained in section 261 of the Social Welfare (Consolidation) Act 2005. In exercising these functions the Department also operates in accordance with the relevant data protection legislation.

Deputies:

One of the Department's primary relationships in data sharing is with the Revenue Commissioners. In recent years bilateral liaison with Revenue has been improved through the establishment of a high level group at management board level, the purpose of which is to ensure ongoing collaboration and interaction between the two bodies, including on social welfare fraud and tax non-compliance issues. The two organisations are working together with a view to aligning expertise and information across their operations. In this context, a number of working groups have been established which are looking at a range of specifics issues, including that of social welfare fraud and tax compliance. In this context, it is important to emphasise that data exchange operates on a two-way basis between the Revenue Commissioners and the Department and has been ongoing for many years.

Deputies:

On the information provided by my Department for Revenue, data relating to short-term benefits such as illness benefit, occupational injury benefit and jobseeker's benefit have been provided for some time on a weekly basis. Information on some other long-term schemes, including long-term disability-illness benefit, child benefit, carer's allowance and one-parent family payment, is provided for Revenue on an annual basis.

Deputies:

On foot of a specific data matching exercise carried out by the Department in late 2011, following work done by one of the high level group's sub-groups, as outlined, some 563,800 records of pensioners were provided for the Revenue Commissioners in early December. The data in question related to customers in receipt of five social welfare payments, namely, State pension,contributory State pension, transition State pension, non-contributory State pension, widow's-widower's-surviving civil partner's pension and invalidity pension. The data provided contained the customer's PPS number, name, pension type and rate of payment. Although data in respect of this customer group were provided occasionally in the past, they were not previously given on a bulk basis. However, the development of new technology in the Department has facilitated the provision of this data in a complete and continuous manner.

Deputies:

It is important to recognise that this is all part of an ongoing policy to enhance data sharing between the Department of Social Protection and other public service bodies. As technology develops in the Department and elsewhere, it is expected that the exchange of data with other organisations will continue to be improved. The Department has been sharing data with other Departments and agencies for many years. Since 1997 it obtains commencement of employment data from Revenue which are matched against social welfare claims and relevant cases are investigated, where necessary. Information is also received on a daily basis on PRSI collection and, on a more ad hoc basis, certain tax exemptions and other tax heads. Other examples of ongoing co-operation include data matching and sharing of information with the Irish Prison Service which provides data for my Department on a weekly basis; the Department of Education and Skills which provides student data; the Commission on Taxi Regulation which provides data on taxi and hackney licences; the Probate Office; the Private Residential Tenancies Board; and the Health Service Executive.

Deputies:

The taxation of pensioners and all citizens is primarily a matter for the Revenue Commissioners. However, in the case of social welfare payments which are subject to tax, my Department notifies its customers that their payments are taxable and that they should contact their local tax office in this regard. A notice to this effect is contained in the award letter issued by the Department to the customer. The information leaflets for each of the relevant schemes also contain a reference to potential tax liability.

Barry Cowen (Laois-Offaly, Fianna Fail)
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I thank the Minister of State for his response, despite the fact that it does not deal with the substantive question put to him.

Seán Barrett (Dún Laoghaire, Ceann Comhairle)
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I am sorry but the request concerned the transfer of information on pensioners' tax liability from the Department of Social Protection to the Revenue Commissioners.

Barry Cowen (Laois-Offaly, Fianna Fail)
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Yes. There has been an exchange of data between Departments for a number of years and the transfer of information was enhanced in the recent budget. That is what was said, but, unfortunately, it did not go much further and tell us what exactly had been enhanced and for what reason.

The question to which I hoped the Minister of State would respond was related to the fact that 115,000 pensioners had essentially been labelled as tax cheats, despite the fact that the vast majority of them had no idea that their liabilities had been miscalculated. This has caused great distress and confusion for many of the most vulnerable and older people. We acknowledge that the chairman of the Revenue Commissioners appeared before the finance committee today and apologised for Revenue's role and the manner in which people had been notified. What role did the Government play in this fiasco? Who in the Government thought it would be a good idea to land such a letter on the doorsteps of the people concerned immediately after Christmas without giving any warning, an explanation or there being clarity on the approach to be taken? Who in the Government knew that the letters were being sent and why did they not insist on there being a proper public information campaign before the letters were issued? Did the Revenue Commissioners inform the Minister for Finance that the mailshot was about to be issued and, if so, why did he not believe it was necessary to inform those about to be affected and if not, why not?

Seán Barrett (Dún Laoghaire, Ceann Comhairle)
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Thank you, Deputy.

Barry Cowen (Laois-Offaly, Fianna Fail)
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The Taoiseach said yesterday that the approach to be taken by the Revenue Commissioners would have to be improved. What role did he and the Cabinet play? When was the issue discussed and agreed to by the Cabinet? Was it last November? When the budget was announced, the measure on the enhanced transfer of information was sneaked in.

Seán Barrett (Dún Laoghaire, Ceann Comhairle)
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We are over time.

Barry Cowen (Laois-Offaly, Fianna Fail)
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The reality is that it came home to roost in January.

Enda Kenny (Mayo, Fine Gael)
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It was not a Cabinet decision.

Barry Cowen (Laois-Offaly, Fianna Fail)
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If not, why not?

Seán Barrett (Dún Laoghaire, Ceann Comhairle)
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It would be helpful if Deputies were to state clearly the information they are seeking when applying to raise a topical issue. This request related to the transfer of information.

Shane McEntee (Meath East, Fine Gael)
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It has been made clear that in the transfer of information and data there is co-ordination between various institutions and the Department. I have given a reasonable reply to the question asked. Everyone regrets that 115,000 letters were issued without warning, but that is the way it is. I have outlined what happened and the issue has been addressed by way of people apologising earlier today for the manner in which the letters had been sent. The matter had to be dealt with and was dealt with. If the previous Government had been working on such measures and Ministers had been in control of their Departments, there might not have been such a scenario.

Billy Kelleher (Cork North Central, Fianna Fail)
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For how long will the Government blame the previous tenants for the state of its dirty kitchen?