Clare Daly (Dublin North, United Left)
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23. To ask the Minister for Finance if the rules in place for the application of tax relief at source unfairly discriminate against persons who are unable to meet their mortgage repayments, particularly given the ongoing mortgage crisis; and if he will make a statement on the matter. [1274/16]

Michael Noonan (Limerick City, Fine Gael)
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The statutory position in regard to mortgage interest relief entitlement is that individuals can avail of the relief in respect of qualifying interest paid in a tax year, as provided for by Section 244 of the Taxes Consolidation Act 1997.

Initially, for ease of administration, Revenue agreed with lenders to allow the relief on the basis of either 'interest charged' or 'interest paid'.  A key part of the agreement required the lenders to inform Revenue of the exceptional cases where cumulative arrears built up over an 18 month period. All such cases were reviewed on a case by case basis and the relief was withdrawn where appropriate. The 18 month 'review period' was reduced to 6 months in September 2012 in light of the increasing numbers of mortgage arrears cases.

As the number of arrears cases continued to increase post September 2012, Revenue was left with no alternative but to instruct lenders to apply the statutory position with effect from 1 January 2014, i.e. to only allow the relief on the basis of the interest paid by the borrower.

The revised arrangements have no impact for borrowers who pay the correct mortgage amount on time, in accordance with the terms of their loan, or on those who make partial payment of the amount due equal to or exceeding the interest due for the relevant period.

In instances where borrowers do not make payments, or pay less than the amount of interest due, then the TRS amount is reduced to reflect the actual amount of interest paid.