Written answers

Tuesday, 16 June 2020

Department of Finance

Covid-19 Pandemic Supports

Photo of Louise O'ReillyLouise O'Reilly (Dublin Fingal, Sinn Fein)
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48. To ask the Minister for Finance the steps he is taking to assist event workers recoup public liability insurance which has been paid to private insurance companies for the purposes of working events which will no longer be taking place; and if he will make a statement on the matter. [11118/20]

Photo of Paschal DonohoePaschal Donohoe (Dublin Central, Fine Gael)
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At the outset, I understand that the Deputy’s question relates to independent contractors, that work at public events, like sound engineers, security staff, etc., and not general employees of businesses that may be operating at such events.The Deputy should note that neither I, nor the Central Bank of Ireland, can interfere in the provision or pricing of insurance products, or their contractual terms, as these matters are of a commercial nature, and are determined by insurance companies based on an assessment of the risks they are willing to accept. This position is reinforced by the EU framework for insurance which expressly prohibits Member States from adopting rules which require insurance companies to obtain prior approval of the pricing or contractual terms and conditions of insurance products.

It is difficult to give a precise answer in relation to the situation mentioned in the Deputy’s question. We are all aware that many events have been cancelled as a result of the COVID-19 pandemic and that this will have a negative financial impact on contractors that would have worked at these events. Government has brought forward a range of general measures to support businesses and individuals in terms of income support as part of a very significant financial aid package.

In terms of the specifics of the case of recouping money paid for such insurance it may well depend on the nature of the contract between the contractor and their insurer. I understand that such insurance contracts may not be related to particular events, but provide cover over a period of time. Therefore in some cases the contractor may benefit from the insurance taken out in terms of working at future events that may be held. In addition, whether a contractor can make a claim in relation to the cancellation of the event against their insurance policy due to COVID-19 will also depend on the specifics of the individual policy. I have repeatedly said  that insurers must treat their customers honestly, fairly and professionally and honour those elements of the policies covered in line with the Central Bank’s Consumer Protection Code. However, it is important to note that neither the Government nor the Central Bank have any role in adjudicating on such matters.

Where a dispute occurs and the policyholder is dissatisfied with the service received by their insurance provider, including in relation to the situation mentioned in this question, then the appropriate channels for resolving the dispute must continue to be followed i.e. use of the Financial Services and Pensions Ombudsman (FSPO). The Deputy will be aware that 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 info@fspo.ieor by telephone at 01-567-7000.

Photo of David CullinaneDavid Cullinane (Waterford, Sinn Fein)
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49. To ask the Minister for Finance if workers being paid through the temporary wage subsidy scheme without the employer top-up to 100% of previous wages are expected to work full or pro rata hours; the mechanisms his Department is employing to monitor this; and if he will make a statement on the matter. [11136/20]

Photo of Paschal DonohoePaschal Donohoe (Dublin Central, Fine Gael)
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Section 28 of the Emergency Measures in the Public Interest (Covid-19) Act 2020 is the legislation underpinning the Temporary Wage Subsidy Scheme (TWSS). The Government’s priority in so far as the 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 purpose of the scheme is to ensure that the relationship between employers and employees is maintained to the greatest extent possible so that businesses can restart operations quickly once that is possible. Eligibility for the scheme can be satisfied by an employer once they meet the relevant criteria.

The TWSS 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 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 for any defined period due to the restrictions brought in by the Government or has continued to trade with employees continuing to work full time or part 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. If the employer makes an additional payment greater than the difference allowed by the scheme, then the subsidy value refundable to the employer will be reduced by this excess amount when the refund reconciliation is performed by Revenue in due course. The scheme is not prescriptive as regards the hours that must be worked.

Revenue published detailed guidance on employer eligibility and supporting proofs for the TWSS and it is available on the Revenue website: .

Photo of Cathal CroweCathal Crowe (Clare, Fianna Fail)
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51. To ask the Minister for Finance if he will give consideration to introducing a 0% VAT rate as an interim measure for the tourism and recreation sectors to give them a much needed boost post Covid-19 restrictions. [11150/20]

Photo of Denis NaughtenDenis Naughten (Roscommon-Galway, Independent)
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108. To ask the Minister for Finance if he will reduce the VAT rate to zero for the hospitality sector to assist with the Covid-19 recovery of the economy; and if he will make a statement on the matter. [11369/20]

Photo of Paschal DonohoePaschal Donohoe (Dublin Central, Fine Gael)
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I propose to take Questions Nos. 51 and 108 together.

I am advised by Revenue that the VAT rating of goods and services is subject to EU VAT law, with which Irish VAT law must comply. In general, the Directive provides that all goods and services are liable to VAT at the standard rate unless they fall within Annex III of the Directive, in respect of which Member States may apply either one or two reduced rates of VAT. Ireland currently operates two reduced rates of VAT, 13.5% and 9%, as permitted by the Directive. Specific services relating to the tourism and recreational sector are listed in Annex III of the Directive and therefore can be reduced to 9%. However, there is no discretion under the Directive to zero rate these supplies.

Photo of David CullinaneDavid Cullinane (Waterford, Sinn Fein)
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52. To ask the Minister for Finance the reason there has not been flexibility in accommodating businesses that were unable to meet the payroll submission deadline in March 2020 and which can demonstrate their legitimate need to access the temporary wage subsidy scheme; if new applications are being accepted for businesses that require access to the scheme to retain and rehire employees in the coming weeks and months; and if he will make a statement on the matter. [11312/20]

Photo of Paschal DonohoePaschal Donohoe (Dublin Central, Fine Gael)
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The Temporary Wage Subsidy Scheme (TWSS) is an emergency measure to deal with the impact of the Covid-19 pandemic on the economy. The scheme builds on data returned to Revenue through its real-time PAYE system.

It must be accepted that the underlying legislation and the scheme itself cannot be tailored to meet every individual unique set of circumstances for either employers or employees. The core principles of the scheme, as prescribed in the underlying law, are that the business is suffering significant negative economic impact due to the pandemic, that the employees were on the payroll at 29 February 2020 and that the employer had fulfilled its PAYE reporting obligations for February 2020 before, in general, 15 March 2020. The latter two requirements in particular were critical safeguards against abuse and exploitation of the scheme.

As the Deputy may be aware, I announced an extension of the TWSS until the end of August 2020 and thus, where the employer meets the eligibility conditions for the TWSS, new applications will continue to be accepted by Revenue for businesses that require access to the scheme to retain and rehire employees in the coming weeks and months.

I have been advised by Revenue that following a review of cases since the TWSS commenced, it became apparent that a number of employers had 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 are otherwise tax compliant. Given the purpose and objective of the scheme, Revenue announced on 24 April 2020, under its care and management provisions, that it would 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 scheme under the revised criteria and makes the necessary declaration that it is significantly impacted by the Covid-19 crisis, 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. These revised arrangements cannot be made retrospective.

Where a business fails to meet the revised qualifying criteria for TWSS but wishes to further engage with Revenue on the matter, it must provide supporting evidence setting out the rationale for why it should be included in the scheme. This supporting documentation should be provided via Revenue’s myEnquiries system.

Revenue advises that it does not propose to make any further concessions in relation to compliance with those reporting requirements for the purposes of qualification for the scheme.

Photo of Cormac DevlinCormac Devlin (Dún Laoghaire, Fianna Fail)
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54. To ask the Minister for Finance the estimated cost of increasing by €250,000 the threshold at which businesses must use the invoice system as opposed to cash receipts system for VAT; and if he will make a statement on the matter. [10515/20]

Photo of Paschal DonohoePaschal Donohoe (Dublin Central, Fine Gael)
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Increasing the allowable threshold for accounting for VAT on a monies received basis would generate a once-off cash-flow cost to the Exchequer.

I am advised by Revenue that, based on 2019 VAT returns, increasing the threshold from €2.0m to €2.25m could have a cash-flow cost in the region of €27m in the year in which the change is made.

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