Local Government (Charges) Bill 2009 [Seanad]: Committee and Remaining Stages.

Thursday, 9 July 2009

Dáil Eireann Debate
Vol. 687 No. 5

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Amendments Nos. a1 and b1 not moved.

An Ceann Comhairle: Information on John O'Donoghue  Zoom on John O'Donoghue  Amendments Nos. 4 to 6, inclusive, 8, and 13 to 18, inclusive, are related to amendment No. 1 and they may be discussed together.

Deputy Phil Hogan: Information on Philip Hogan  Zoom on Philip Hogan  I move amendment No. 1:

This amendment deals with the administration of the charge collection system. We are effectively creating a new administrative system for the collection of the charge. There are revenue collectors and staff in local authorities but, as Deputy Burke stated, the moratorium on recruitment in local authorities and the general reduction in staff arising from the reduction in local government funds are such that local authorities may not be best equipped or sufficiently equipped administratively to collect the charge. I would have believed that, in order to collect the charge, the Minister would have considered the vehicle used by the Office of the Revenue Commissioners.

Although the Minister stated the local government system is efficiently set up to collect the charge, will he indicate how he can reconcile that with the reduction in staff and the lack of necessary information on private rented accommodation and holiday homes in each local authority area? If the discrepancy has been reconciled, will the Minister assure me that is the case before I comment further?

Minister for the Environment, Heritage and Local Government (Deputy John Gormley): Information on John Gormley  Zoom on John Gormley  I thank Deputy Hogan for his amendment. The central issue concerns the body or organisation within the public service that is best suited to administer the €200 charge. I assume that Fine Gael’s opposition to sections 9, 10 and 11 is based on the principle behind the group of amendments, the purpose of which is to substitute the Revenue Commissioners for local authorities in administering the collection of the charge.

I fully accept that we must administer our public services as best we can. I also accept the Office of the Revenue Commissioners is a very efficient organisation that has made major strides in recent years in facilitating compliant taxpayers to discharge their liabilities with the minimum of fuss and red tape. I have no doubt that had this function been assigned to the Revenue Commissioners, the organisation would have put in place effective management and [105]arrangements to implement the charge. Equally, I am in no doubt that local authorities will do a very efficient job in putting into effect the legislation.

A project board was set up by the local authorities after the 2009 budget to plan for the introduction of the charge. The Local Government Computer Services Board was asked to design a website, similar in concept to the motor tax on-line website, to accept Internet payments. This site will be up and running in time for the liability date of 31 July 2009. Other arrangements continue to be put in place in local authorities to facilitate the smooth and effective implementation of the new charge. I encourage all concerned to use the website to discharge liabilities to pay the charge. This is in everybody’s interest, especially those obliged to pay it. The website is efficient and user friendly and will make life easier and simpler for those who avail of it. For those who cannot or will not use this facility, local authorities will accept payments at their local offices.

There is an inherent logic to paying the charge to local authorities, given that these bodies will retain and deploy the revenue stream that arises. This is a major step forward for local authorities towards securing a genuinely local source of revenue that will reduce their dependency on central government funding.

I await with interest the report of the Commission on Taxation. One of its terms of reference requires it to consider options for the future funding of local government. I have every confidence the commission will do its work thoroughly. It will be very interesting to see the conclusions and recommendations it reaches.

I stated in the Seanad that I have no doubt but that the local authorities will do a very good job collecting the revenue. From 31 July onwards, they will be seeking the revenue and will do so because it will be in their interest. When one provides the local authorities with such an incentive, they generally step up to the plate. While the local authorities are not immune to the cutbacks across all sectors of society, one can be assured the revenue will be collected very efficiently as a result of the changes to the way we operate at local government level.

Deputy Phil Hogan: Information on Philip Hogan  Zoom on Philip Hogan  I tabled the amendments because I do not believe the local authorities will be in a position to collect the money efficiently and effectively, as believed by the Minister. It is bound to take time and money for them to get their new tax collection systems up and running. I would have believed the Revenue Commissioners would have been better placed to collect the tax temporarily. The Minister expects people to admit liability to the tax and pay up. If they do not pay up they will be fined €20, which fine will increase if there are repeat offences.

The data-sharing arrangements mentioned in the Bill will help. I would like to see the charge collected but am worried about the state of local government finances. Given the short run-in period, which commenced on 7 April, on which date the local authorities first received notice, it would have been more appropriate to use an existing revenue collection system this year than to require the setting up of a new administrative system at local government level. This is the motivation behind my amendment. If the Minister is satisfied the system he has put in place is appropriate, that is fair enough. We will judge it at the end of the year.

Deputy Ulick Burke: Information on Ulick Burke  Zoom on Ulick Burke  I support Deputy Hogan’s amendment. It was suggested that local authorities can delegate the collection functions referred to in the Bill to the Local Government Computer Services Board and the Local Government Management Services Board, which can accept electronic payment. The Minister is suggesting it will be possible to pay directly to the local authorities themselves.

Deputy John Gormley: Information on John Gormley  Zoom on John Gormley  Or go to an office.

[106]Deputy Ulick Burke: Information on Ulick Burke  Zoom on Ulick Burke  Or go to an office. However, all of these mechanisms will incur a cost — for example, the cost of employing staff to man the computers or offices through which payments can be made.

Bearing in mind what Deputy Hogan and I stated on Second Stage, there must be a failure to realise that many sections of councils have been depleted of staff. In respect of collecting for water services, the council can cut off the water supply to make people pay up. In this instance there is no such danger apart from the fine of €20 per month for the balance. It is crazy to make the system so complicated given the sum involved, with no definite method by which those charged can pay.

Amendment, by leave, withdrawn.

Section 1 agreed to.

An Ceann Comhairle: Information on John O'Donoghue  Zoom on John O'Donoghue  Amendments Nos. 2 and 3 are related and may be discussed together, by agreement.

Deputy Ciarán Lynch: Information on Ciaran Lynch  Zoom on Ciaran Lynch  I move amendment No. 2:

This matter came to the attention of many Members. A series of tidying up measures have been already taken because of the speed at which the legislation is being passed. In the Seanad it had to be tidied up in respect of mobile homes of granny flats, following Deputy Hogan’s highlighting of the issue last week.

There is a problem concerning self-catering dwellings across the country that are registered with Fáilte Ireland. These are not holiday homes which their owners leave unoccupied. They are let on a lease arrangement for short periods of time. Crucially they are holiday homes that provide a vital stimulus to local economies. According to one representation I received, bookings are 60% down on this time last year. That is in Kerry, one of the premium holiday regions in the country. I hope the Minister will take on board what we propose and allow some scope under the measures in the Bill — we are still undecided on whether this is a charge or a tax. The levy of €200 on each of these buildings has a significant impact on tourism service operators. I urge the Minister to support the amendment.

Deputy Joanna Tuffy: Information on Joanna Tuffy  Zoom on Joanna Tuffy  Has the local authority any scope to reduce rates paid in respect of buildings to allow for the €200 charge? Has the Minister examined that aspect of the charge?

Deputy John Gormley: Information on John Gormley  Zoom on John Gormley  I thank the Deputies from the Labour Party and Fine Gael for their amendments. There is no charge for a person paying commercial rates. Fine Gael has tabled a similar amendment. Should I wait for the Fine Gael Members to speak?

Deputy Phil Hogan: Information on Philip Hogan  Zoom on Philip Hogan  We will wait to hear what the Minister has to say.

An Ceann Comhairle: Information on John O'Donoghue  Zoom on John O'Donoghue  We will not discuss that amendment now. We are discussing amendments Nos. 2 and 3.

[107]Deputy John Gormley: Information on John Gormley  Zoom on John Gormley  The Bill takes as its starting point the introduction of a modest annual charge on the owners of non-principal private residences. An exemption is provided for owners of principal private residences and for certain local authority and social housing that is also used for the purpose of principal residence. These exemptions are provided in recognition of the fact that we all need somewhere to live. Most other dwellings are deployed by their owners for an economic purpose of one kind or another or are available to them to be so deployed. This underpins the charge. It is reasonable to ask the owners of properties that are, or can be, used to generate an economic return to make some contribution to the services that local authorities provide and that are necessary to enable an economic return to be made.

Nobody likes having to pay taxes or charges and nobody particularly likes imposing them either. It would not be reasonable for me to differentiate between rental properties and other non-principal private residences by exempting one type of non-principal private residence from the charge while leaving other such properties liable to it. I accept that self-catering holiday accommodation is a valuable resource from the perspective of our tourism infrastructure. These properties benefit tourists and the local economy alike. I hope they generate a reasonable economic return for the individuals and companies that own them, but accommodation of this kind is in the business of generating a return for its owners, and it usually will. For this reason, I cannot accede to the amendment.

I understand that self-catering accommodation is not normally liable for commercial rates even though it is in competition with other tourism infrastructure that is liable for rates. In these circumstances, the €200 fee is not a large charge when compared with a commercial rates bill. The House should note that section 2(1)(h) provides that in any case where commercial rates liability is incurred the €200 charge will not apply. Deputies can be assured that no self-catering accommodation or any other property will incur a liability for both the charge and commercial rates.

Deputy Olivia Mitchell: Information on Olivia Mitchell  Zoom on Olivia Mitchell  I thank the Minister for his response. I have just spoken on this topic and do not want to repeat what I said. However, I want to convey to the Minister that this is an industry in crisis, haemorrhaging jobs and losing infrastructure. The departure tax has done irreparable damage to hotels and B&Bs and this tax means wipe-out for many people in the self-catering sector. That is no exaggeration. Many feel this is the thin end of the wedge and a €200 charge this year might be €2,000 before we blink. Even if the fee does not increase, this will be the extra cost that drives many businesses over the edge. They are slashing, even halving, their prices to salvage an income out of a maximum 14 weeks season when demand is down to keep any kind of bookings coming in. These businesses are in real trouble.

I plead with the Minister to consider these self-catering holiday homes that are registered with Fáilte Ireland. They already pay €200 to register. This will drive many people into the black market. My main concern is to maintain jobs in the tourism industry. The Minister stated that they will not have to pay the charge if they are paying rates. They are making a local contribution. It may not be rates but they are paying water charges, refuse charges and an additional fee for a building energy rating, BER, certificate for each holiday letting, introduced by the Minister’s Department. They also pay national taxes such as corporate tax, income tax and VAT. Many cannot afford to pay the interest on their debts. We are driving people out of business. Many of them face ruination. They owe money to the banks which will sell their bad debts to the taxpayer. This makes no sense from anybody’s perspective, and the Exchequer will lose more money than it can ever hope to gain from this tax. I ask the Minister to consider these businesses. I understand the total cost would be €2 million if the Minister were to exempt the registered properties.

[108]Deputy Jimmy Deenihan: Information on Jimmy Deenihan  Zoom on Jimmy Deenihan  I, too, have already said what I am going to say now. The revenue loss of €2 million that Deputy Mitchell mentioned represents approximately 10,000 people involved in providing self-catering units. In a year when we all know tourism is doing so poorly, this would be a gesture to the industry to indicate we are concerned about it and sensitive to its current problems.

As Deputy Mitchell said, it costs €200 to be registered and people may decide not to register with Fáilte Ireland as a result of this. The conditions for registration would not hold and this could result in an inferior product. There are now people selling their self-catering units by means of the Internet and doing their own promotion. Such people may get more clients than would through Fáilte Ireland brochures and its marketing process.

As a result of this measure, people may not bother listing with Fáilte Ireland, and its fees will go up anyway. Fewer people will be registered with Fáilte Ireland and, although people will have to pay the €200, we may see an inferior product as a result. The Minister should consider that.

The case was strongly put on Second Stage and again on Committee Stage by both Labour and Fine Gael. I urge the Minister to accept the amendment. Perhaps it could be reviewed in future, but because of what is happening currently in the Irish tourism industry, it is important that these amendments are implemented. Although €200 may not seem much, to the 10,000 people in the sector, it could mean a great deal. As I have stated, it could cause fewer people to register with Fáilte Ireland, leading to an inferior product.

Deputy Denis Naughten: Information on Denis Naughten  Zoom on Denis Naughten  I support the amendment put down by my colleagues Deputies Hogan and Mitchell on this issue. The points have been articulated well by my colleagues, and there is an opportunity to ensure we deal with a sector of the industry that is on its knees. I have correspondence from a constituent who has said bookings are down between 50% and 60% this year alone, and it is mainly families which avail of self-catering accommodation around the country.

The industry has been allocated a great deal of resources by the State, especially Leader funding, in recent years. Many people around the country got their facilities registered with Fáilte Ireland in order to draw down grants from Leader, with facilities brought up to a very high standard for Fáilte Ireland approval. In recent years, as part of the rural development process, the State has encouraged the development of these facilities around the country but we are now putting an additional tax on top of rates, water charges and the Fáilte Ireland registration fees.

There is a concern that this will be only the first step and the €200 charge will be increased in future. The reality is that in many parts of the country, self-catering accommodation is the backbone of the tourism offering. It is a substantial part of tourism in my own constituency in Roscommon and south Leitrim, and this is also the case in other parts of the country. I urge the Minister to accept the amendment, as it would not have a major financial implication on what the Government is trying to do but it would send a clear message that we want to support the development of our tourism industry. This is important from the point of view of the taxpayer and the European Union because of the large capital investment in the sector in recent years. It is vital that we support the industry, rather than imposing additional taxes, now that it is under financial pressure.

Deputy John Gormley: Information on John Gormley  Zoom on John Gormley  Deputy Naughten has repeated an untruth which I have clarified for Deputy Tuffy. The €200 is not on top of rates; we have made it clear that it is separate from rates.

[109]Deputy Olivia Mitchell: Information on Olivia Mitchell  Zoom on Olivia Mitchell  It is on top of other charges.

Deputy Denis Naughten: Information on Denis Naughten  Zoom on Denis Naughten  It is on top of charges and water rates.

Deputy John Gormley: Information on John Gormley  Zoom on John Gormley  Deputy Naughten said it was on top of rates, which is not the case.

Deputy Denis Naughten: Information on Denis Naughten  Zoom on Denis Naughten  It is on top of water rates.

Deputy John Gormley: Information on John Gormley  Zoom on John Gormley  Deputy Mitchell said it is €200 and that it could be €2,000 before we know it, but the legislation is clear.

Deputy Olivia Mitchell: Information on Olivia Mitchell  Zoom on Olivia Mitchell  The legislation can be changed.

Deputy John Gormley: Information on John Gormley  Zoom on John Gormley  That is the point. We would have to introduce new legislation if we wanted to change it. It cannot be introduced by sleight of hand. Deputy Deenihan indicated that €200 is not a significant amount. That is precisely the point. This is a relatively modest charge in the overall scheme. This economy must raise an incredible amount of money and if we cannot act on this modest charge, we may as well throw our hats at it.

Deputy Olivia Mitchell: Information on Olivia Mitchell  Zoom on Olivia Mitchell  People will be put out of business.

An Ceann Comhairle: Information on John O'Donoghue  Zoom on John O'Donoghue  How stands amendment No. 2?

Deputy Ciarán Lynch: Information on Ciaran Lynch  Zoom on Ciaran Lynch  I would like to withdraw amendment No. 2 in favour of the Fine Gael amendment, which is better in scope in that it refers to Fáilte Ireland-registered properties, which sets a standard and ensures such a standard into the future.

Amendment, by leave, withdrawn.

Deputy Ciarán Lynch: Information on Ciaran Lynch  Zoom on Ciaran Lynch  I move amendment No. 2a:

This amendment sets out to allow exemptions for heritage-type properties which are unoccupied pending the making of an application for them to become approved properties under the 1997 Act. This could occur where a property is not yet in a fit state to be rented out by the Landmark Trust, for example, or some other agency similar in scope to the Landmark Trust, but which will be at some future point.

It seems unfair to charge a tax in the meantime if the property remains vacant, and there are properties in this category around the country. It would be unfortunate if such properties were to fall to rack and ruin in a similar way to the magnificent properties in the State which fell to rack and ruin in the 1920s because a tax or charge would be implemented. There are currently applications with the Landmark Trust to have buildings transferred and that trust does not have the financial fluidity which it had a number of years ago. This cost could jeopardise the transfer of such properties.

[110]Deputy John Gormley: Information on John Gormley  Zoom on John Gormley  I thank the Deputy for putting down this amendment. Section 482 of the Taxes Consolidation Act 1997 deals with certain tax reliefs for buildings of significant scientific, historical or aesthetic merit. Deputies will note that I provided for an exemption from the charge for such buildings that had been approved for the purposes of this section by the Revenue Commissioners.

Few such buildings will qualify under the provision of the Bill in section 2(1)(a) as most of them are likely to be used as principal private residences. Nonetheless, it seemed prudent to include the provision in the Bill, both for its own sake, especially as I have a role relating to heritage generally, and for consistency with the provision of the tax code operated by the Revenue Commissioners.

I regret I cannot accede to the amendment. If I provided an exemption for any person who indicated it was his or her bone fide intention to use a residential property as a principal private residence, the entire yield from the charge could dry up. Our corpus of legislation deals with reality as it exists, not as it might be or as some people intend it to be. For this reason, I cannot accede to the amendment sought.

If people genuinely believe they are entitled to relief under section 482 of the Taxes Consolidation Act 1997, they should apply to the Revenue without delay. They should do so because they may be entitled to such relief but also because there is a possible exemption from the €200 charge if a property qualifies under section 482.

Deputy Olivia Mitchell: Information on Olivia Mitchell  Zoom on Olivia Mitchell  Does the charge qualify to be set against tax in the same way domestic refuse charges so qualify? Will businesses be able to set it against tax?

Deputy John Gormley: Information on John Gormley  Zoom on John Gormley  As I understand it, they can set it against their expenses for business purposes.

Deputy Jimmy Deenihan: Information on Jimmy Deenihan  Zoom on Jimmy Deenihan  Is there a register of houses that are listed as being of value from a heritage point of view? Is there an overall figure in this regard?

Deputy John Gormley: Information on John Gormley  Zoom on John Gormley  Yes. We published details of the houses that are listed. I seem to recall that the Deputy was present when I launched the document relating to those properties in Kerry.

Deputy Jimmy Deenihan: Information on Jimmy Deenihan  Zoom on Jimmy Deenihan  I was just wondering if there is an overall figure in respect of the number of houses listed. I presume castles in which people live, etc., are included.

Deputy John Gormley: Information on John Gormley  Zoom on John Gormley  Castles, thatched cottages and so on are included.

Deputy Jimmy Deenihan: Information on Jimmy Deenihan  Zoom on Jimmy Deenihan  I presume some of them are very famous houses which attracted attention when the scheme was introduced some years ago. It will be stated that those who rent out their properties as self-catering holiday homes will be penalised, while some very wealthy individuals will be exempt. However, that is the way it is dealt with in the legislation.

Deputy Olivia Mitchell: Information on Olivia Mitchell  Zoom on Olivia Mitchell  It shows where the priorities lie.

An Ceann Comhairle: Information on John O'Donoghue  Zoom on John O'Donoghue  On the last occasion on which Deputy Deenihan referred to thatched cottages at a meeting of Kerry County Council, a Deputy who was present stated that if the colour of the thatch was anything like the colour of the thatch on some of those attending the meeting he would have nothing to do with it.

[111]Deputy Jimmy Deenihan: Information on Jimmy Deenihan  Zoom on Jimmy Deenihan  Yes, but we saved quite a few houses on that occasion.

Deputy Phil Hogan: Information on Philip Hogan  Zoom on Philip Hogan  And the Deputy is still around.

  7 o’clock

Deputy Ciarán Lynch: Information on Ciaran Lynch  Zoom on Ciaran Lynch  The amendment does not relate to castles, moats or Georgian or Victorian mansions. There are a number of small cottages and dwellings which would have come into people’s possession by means of inheritance or whatever and which, in light of the level of refurbishment they require, could not be regarded as habitable. If they were to be refurbished to modern standards, their natural heritage value might be destroyed. A number of these properties incorporate unique design and architectural features that can be peculiar to the localities in which they are to be found. Is there a possibility that, by means of secondary legislation, further direction might be given in respect of including matters that are not currently contemplated in the Bill?

Deputy John Gormley: Information on John Gormley  Zoom on John Gormley  No, that possibility does not exist. However, in the interest of clarifying certain matters, I will issue guidance to local authorities. I made it clear earlier that people will either be part of this or they will not. It is not possible to legislate for situations where a person intends something to happen. I cannot operate in that way.

Amendment, by leave, withdrawn.

Deputy Phil Hogan: Information on Philip Hogan  Zoom on Philip Hogan  I move amendment No. 3:

Amendment put.

The Committee divided: Tá, 62; Níl, 70.

Information on Bernard Allen  Zoom on Bernard Allen  Allen, Bernard. Information on James Bannon  Zoom on James Bannon  Bannon, James.
Information on Seán Barrett  Zoom on Seán Barrett  Barrett, Seán. Information on Pat Breen  Zoom on Pat Breen  Breen, Pat.
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Information on Bernard Durkan  Zoom on Bernard Durkan  Durkan, Bernard J. Information on Olwyn Enright  Zoom on Olwyn Enright  Enright, Olwyn.
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Information on Tom Hayes  Zoom on Tom Hayes  Hayes, Tom. Information on Philip Hogan  Zoom on Philip Hogan  Hogan, Phil.
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Níl
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Information on Martin Cullen  Zoom on Martin Cullen  Cullen, Martin. Information on John Curran  Zoom on John Curran  Curran, John.
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Information on Michael Finneran  Zoom on Michael Finneran  Finneran, Michael. Information on Michael Fitzpatrick  Zoom on Michael Fitzpatrick  Fitzpatrick, Michael.
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Information on Michael Kitt  Zoom on Michael Kitt  Kitt, Michael P. Information on Tom Kitt  Zoom on Tom Kitt  Kitt, Tom.
Information on Brian Joseph Lenihan  Zoom on Brian Joseph Lenihan  Lenihan, Brian. Information on Conor Lenihan  Zoom on Conor Lenihan  Lenihan, Conor.
Information on Michael Lowry  Zoom on Michael Lowry  Lowry, Michael. Information on Tom McEllistrim  Zoom on Tom McEllistrim  McEllistrim, Thomas.
Information on Finian McGrath  Zoom on Finian McGrath  McGrath, Finian. Information on Mattie McGrath  Zoom on Mattie McGrath  McGrath, Mattie.
Information on Michael McGrath  Zoom on Michael McGrath  McGrath, Michael. Information on John McGuinness  Zoom on John McGuinness  McGuinness, John.
Information on John Moloney  Zoom on John Moloney  Moloney, John. Information on Michael Mulcahy  Zoom on Michael Mulcahy  Mulcahy, Michael.
Information on M. J. Nolan  Zoom on M. J. Nolan  Nolan, M. J. Information on Seán Ó Fearghaíl  Zoom on Seán Ó Fearghaíl  Ó Fearghaíl, Seán.
Information on Charlie O'Connor  Zoom on Charlie O'Connor  O’Connor, Charlie. Information on Willie O'Dea  Zoom on Willie O'Dea  O’Dea, Willie.
Information on Noel O'Flynn  Zoom on Noel O'Flynn  O’Flynn, Noel. Information on Rory O'Hanlon  Zoom on Rory O'Hanlon  O’Hanlon, Rory.
Information on Ned O'Keeffe  Zoom on Ned O'Keeffe  O’Keeffe, Edward. Information on Mary O'Rourke  Zoom on Mary O'Rourke  O’Rourke, Mary.
Information on Christy O'Sullivan  Zoom on Christy O'Sullivan  O’Sullivan, Christy. Information on Seán Power  Zoom on Seán Power  Power, Seán.
Information on Eamon Ryan  Zoom on Eamon Ryan  Ryan, Eamon. Information on Trevor Sargent  Zoom on Trevor Sargent  Sargent, Trevor.
Information on Eamon Scanlon  Zoom on Eamon Scanlon  Scanlon, Eamon. Information on Brendan Smith  Zoom on Brendan Smith  Smith, Brendan.
Information on Noel Treacy  Zoom on Noel Treacy  Treacy, Noel. Information on Mary Wallace  Zoom on Mary Wallace  Wallace, Mary.
Information on Mary Alexandra White  Zoom on Mary Alexandra White  White, Mary Alexandra. Information on Michael J. Woods  Zoom on Michael J. Woods  Woods, Michael.

Tellers: Tá, Deputies Paul Kehoe and David Stanton; Níl, Deputies Pat Carey and John Cregan.

Amendment declared lost.

Section 2 agreed to.

Amendments Nos. 4 and 5 not moved.

Deputy Aengus Ó Snodaigh: Information on Aengus O Snodaigh  Zoom on Aengus O Snodaigh  I move amendment No. 5a:

Deputy John Gormley: Information on John Gormley  Zoom on John Gormley  I thank Deputies Ferris and Ó Snodaigh. From my speech on Second Stage the House will be aware that I have considerable sympathy with the view that the determination of the charge should be devolved to local authorities in the future. I see this power [113]being exercised as a reserve function within certain limits that the Minister for the Environment, Heritage and Local Government would determine. For 2009, local authorities will concentrate on securing the maximum yield from the charge, not to mind embarking on a process of considering the level of the charge. I have made it clear that I may revisit the basis on which the charge operates but I want to consult Members and see what the Commission on Taxation has to say on the future of financing local government before making any further decisions. I made that clear on Second Stage. For these reasons I am not disposed to devolve powers to local authorities to determine the level of the charge at this time but I will keep the matter under review.

Amendment, by leave, withdrawn.

Amendment No. 6 not moved.

Deputy Phil Hogan: Information on Philip Hogan  Zoom on Philip Hogan  I move amendment No. 7:

I tabled this amendment because the €200 levy is not unduly onerous on rented accommodation or apartments but could have a significant impact on low cost social housing for single people who may not be able to buy a house of their own. Many houses have been converted into five, six or seven units, depending on the size of the house. Each unit could be subject to the €200 charge. On top of that, the owner must pay a registration charge to the Private Residential Tenancies Board. It could amount to a great deal of money when we want to provide good quality accommodation, particularly for single people with low incomes. I ask the Minister to cap the charge at a particular amount without letting it run to €3,000, depending on the number of units in the house. I suggest it be capped at €600. There is a precedent for this.

Deputy John Gormley: Information on John Gormley  Zoom on John Gormley  I thank Deputy Hogan although I cannot accept his amendment. The definitions in the Bill are relevant to this amendment. The policy parameters of the Bill arise, as well as considerations of equity and fairness.

Let us consider the definitions of “building” and “dwelling” in section 1 and “residential property” in section 2. These are the building blocks that define the scope of the Bill. Section 1 provides that the definition of a building includes part of a building so that the argument cannot be made that an apartment block within which multiple living units are contained is simply one building and liable to only one charge. In the case of the definition of “dwelling” in section 1, it is clear that it includes a separate dwelling, whether other facilities in common areas are shared. This concept of a separate dwelling is reinforced in the definition of “residential property” in section 2, where it is made clear that maisonettes, flats, apartments and bedsits constitute residential property. Section 3(1) and 3(2) apply the charge to residential property. It is clear that each separate dwelling incurs a charge unless its owner is exempt. This is as it should be.

The Bill does not rely on a valuation component but we all know that many apartments are worth more than many houses. Furthermore, many apartments generate more rent for their owners than do houses. There are examples of multiple apartments owned by a single person. I cannot accept that the owner of multiple apartments in a substantial apartment block should have his or her liability restricted to €600 or to any figure other than the multiple of €200 the number of separate residential properties gives rise to. I cannot see how a restriction of the [114]kind proposed in the amendment could be regarded as progressive or fair. The impact of the amendment is to reduce the average cost or charge per dwelling, incrementally, in proportion to the number of dwellings the person owns. The more one owns, the less one pays. This is unreasonable, unfair, not progressive and unsuitable for the Bill before us. For these reasons I ask Deputy Hogan to consider withdrawing the amendment.

Deputy Phil Hogan: Information on Philip Hogan  Zoom on Philip Hogan  The Minister has completely misinterpreted the motivation behind the amendment. I explained that I was concerned about low income people, particularly single people, with social housing requirements and the case of a large dwelling that is converted into various units, each of which is subject to the €200 charge. I do not advocate the charge being exempt for the case of the multi-unit apartment blocks to which the Minister referred. Nor am I proposing a regressive measure.

Those who have rented or leased HSE assisted dwellings, including those with disabilities, are exempt. Are they exempt altogether? What is the duration of the lease or rent required in that instance to be exempt under the meaning of “residential property” in section 2?

Deputy John Gormley: Information on John Gormley  Zoom on John Gormley  HSE contracted buildings are exempt. Deputy Hogan should remember that we are talking about the owners of the properties, not those renting.

Deputy Phil Hogan: Information on Philip Hogan  Zoom on Philip Hogan  Why did not the Minister include the rental accommodation scheme?

Deputy John Gormley: Information on John Gormley  Zoom on John Gormley  We are trying to encourage the rental accommodation scheme. Deputy Hogan is asking questions back and forth; I will respond when he is finished.

An Leas-Cheann Comhairle: Information on Brendan Howlin  Zoom on Brendan Howlin  Exactly.

Deputy Phil Hogan: Information on Philip Hogan  Zoom on Philip Hogan  In line with the scenario presented in respect of HSE assisted people, the same principle applies to those under the rental accommodation scheme but the Minister has exempted them. I am interested in the reason.

Deputy John Gormley: Information on John Gormley  Zoom on John Gormley  I have explained this in this House and in the Seanad. We try to encourage the rental accommodation scheme and move towards it. We have less and less money to build property. We are trying to move more people to the rented sector. We can get better value for money and that is why we made the exemption.

The RAS system is working well.

Amendment, by leave, withdrawn.

Section 3 agreed to.

Amendment No. 8 not moved.

An Leas-Cheann Comhairle: Information on Brendan Howlin  Zoom on Brendan Howlin  Amendments Nos. 9 and 10 are related and may be discussed together.

Deputy Ciarán Lynch: Information on Ciaran Lynch  Zoom on Ciaran Lynch  I move amendment No. 9:

[115]As it stands, the section fails to recognise separation agreements and seems to put a premium on a court order or judicial separation. The Labour Party believes this is discrimination against people who are separated by agreement and that view travels well beyond the Labour Party. In legal definitions, this section would be seen to discriminate against that group. The Minister’s reply to the Seanad when this issue was debated there defies logic. He stated:

Excuse me, but this does not add up. “Separation agreement” has a clear legal meaning and the phrase is used in section 49 of the Family Law Act 1996 and sections 22(2) and 24(1)(b) of the Criminal Evidence Act 1992, and in amendment No. 10 we use the definition included in section 20 of that Act. The Minister should accept this amendment. What he proposes creates a shortfall and we will end up with a test case on this matter and the legislation will be found to be legally flawed as it does not take into its scope one type of separation. If the Minister has received legal advice on this I would like him to quote it in the House because what he is proposing is at variance with the Statute Book.

Deputy John Gormley: Information on John Gormley  Zoom on John Gormley  I thank Deputies Ciarán Lynch and Joanna Tuffy for tabling amendments Nos. 9 and 10. Section 4 provides that where a decree of divorce or a decree of judicial separation has been granted in respect of a marriage, a residential property in which a spouse retains an interest but which is occupied by the other spouse as his or her sole or main residence will not attract a liability for the charge in respect of the spouse who does not reside there. This provision is inserted to cater for the relatively common outcome of a divorce or separation agreement where one party continues to reside in the family home but the other, although retaining a financial interest in the property, does not.

Amendments Nos. 9 and 10 seem to seek to give the same status to a separation agreement as is given to a decree granted by a court. Deputy Lynch is correct to state that I made the point in the Seanad that I have considerable sympathy with the objective of these amendments but, as before, I regret to state that I cannot accede to them. While the Labour Party amendments go further than those put forward in the Seanad in attempting to define what is a separation agreement, there remains a crucial difference between what the amendments propose and what is provided for in the Bill.

A decree of judicial separation and a decree of divorce, as referred to in the Bill, must be granted by a court but this is not the case with regard to the type of separation agreement proposed in the amendments we are discussing. As such, we would not know whether either or both parties to the separation agreement had the benefit of legal advice or whether due process generally was followed in arriving at the terms of the agreement. It seems that a court has a vital role to play in ensuring a separation agreement was entered into with the full consent of both parties and ensuring that the parties had been properly advised as part of the legal process.

I assure the Deputies that I am not opposing their amendments on the grounds that there would be a loss in revenue yield. The breakdown of a marriage is a very serious matter and one which generally brings with it a difficult and complicated process during which the parties, among other things, must disentangle their financial affairs. I do not wish to grant a form of legal recognition to this process where there is an insufficient guarantee that it has been carried [116]out properly and with adequate regard to the principles of natural justice and any relevant legal requirements.

The drafting of section 4(4) of the Bill is grounded in precedent. I refer the Deputies to section 13 of the Finance (No. 2) Act 2000 which deals with broadly similar circumstances, but which confines itself to actual decrees of divorce and separation granted under the same statutes as referred to in section 4(4)(b). Bearing in mind this and taking account of the points I have made with regard to the uncertainty surrounding a separation agreement, I regret I cannot accede to the amendments under discussion.

I want, however, to be as helpful as possible to the Deputies and I refer them to the definition of “owner” in the Bill which is set out in section 1. Essentially, an owner is a person who is entitled to receive the rent from a property. If, as part of a separation agreement, one of the parties to the marriage will not be entitled to occupy the residential property in question or to receive any rent in respect of it , I am prepared to advise local authorities that the person should not be regarded as an owner for the purposes of the Bill. It follows, therefore, that the person would not be required to pay the charge in respect of the property in which he or she retains some financial interest but in which he or she is not either residing or receiving rent as part of the separation agreement. I will do this as part of the guidance, to which I referred previously, I intend to issue to local authorities to assist them to carry this legislation into effect.

I hope it will be of benefit to the Deputies proposing the amendments if I also undertake to contact my colleague, the Minister for Justice, Equality and Law Reform, to advise him of the Deputies’ views in this matter, as this branch of law is primarily something in which his Department has the requisite expertise. As I pointed out, the provision included in the Local Government (Charges) Bill follows precedent in other legislation. Depending on my colleague’s advice, I would be happy in the future to address these concerns in a suitable legislative vehicle if this is necessary or appropriate in light of what I have already undertaken to do.

Deputy Joanna Tuffy: Information on Joanna Tuffy  Zoom on Joanna Tuffy  The Minister made a point on precedent and I presume this precedent relates to the first time buyer’s exemption on stamp duty because when that exemption was introduced a separated person was eligible for it under certain conditions. If this is not the precedent to which the Minister referred, I ask him to clarify it.

Surely the majority of separations are by way of separation agreement, not court proceedings. The point is that the two spouses no longer live together. The situation envisaged here is that one of the spouses will be living in the property and the other will live somewhere else, but under the separation agreement both names could remain on the title deeds and both could have a legal and beneficial interest in the property. Merely because a separation agreement is mediated through negotiation with a solicitor or between the spouses they must pay the €200 tax. However, those who go through adversarial proceedings in court will not. This is not right.

Thousands of couples have had separation agreements for years and the Minister is stating he will give guidance to local authorities if there is a provision in the agreement which states the person is not entitled to receive rent from the property. How will people retrospectively provide for this in their separation agreements? The Minister has opened up a minefield by stating what he did. The Labour Party amendments would deal with the problem once and for all. A separation agreement is a legal document recognised by the State and its institutions. The idea that this is considered inferior because the people did not go to court is nonsense. I do not know what the exemption is under the Finance (No. 2) Act 2000 but it is not the same.

This is obviously an anomaly with which the Minister should deal. There is provision in the legislation for those with a decree of divorce or separation decree, but it should also apply in the case of those with separation agreements. Otherwise, the whole family law issue must be [117]open to question, particularly if, somehow, a separation agreement is not a separation agreement and not a legal document. Of course it is.

An Leas-Cheann Comhairle: Information on Brendan Howlin  Zoom on Brendan Howlin  Does the Minister wish to respond?

Deputy John Gormley: Information on John Gormley  Zoom on John Gormley  Is there a need to go through it all again?

An Leas-Cheann Comhairle: Information on Brendan Howlin  Zoom on Brendan Howlin  That is a matter for the Minister.

Deputy John Gormley: Information on John Gormley  Zoom on John Gormley  We have gone through it.

Deputy Ciarán Lynch: Information on Ciaran Lynch  Zoom on Ciaran Lynch  In response to the Minister’s comments on the issue, it appears he is saying people should pay either the €200 or the court costs. The notion of somebody having to go through an expensive court process to receive an exemption they should have been granted in the legislation is bizarre. The same is true with regard to the fact that the Minister says he will give guidance to local authorities. What he should be doing is providing them with clear direction through legislation. Failure to do this is a missed opportunity for the Minister to take leadership on this substantive issue — a separation agreement — which is something that is recognised in Ireland today. That the Minister is determining discriminating levels of status for people who are separated — as Deputy Tuffy pointed out — is nonsense. A separation agreement is an agreement reached by various means — through mediation, solicitors or personal agreement — which de facto states that two people no longer live together. They may have a second home, what was once a holiday home, where one of the partners now resides. This Bill in all common sense should provide that the exemption applies in that situation. On those grounds, the Labour Party will press the amendment.

Amendment put.

The Dáil divided: Tá, 63; Níl, 70.

Information on Bernard Allen  Zoom on Bernard Allen  Allen, Bernard. Information on James Bannon  Zoom on James Bannon  Bannon, James.
Information on Seán Barrett  Zoom on Seán Barrett  Barrett, Seán. Information on Pat Breen  Zoom on Pat Breen  Breen, Pat.
Information on Thomas P. Broughan  Zoom on Thomas P. Broughan  Broughan, Thomas P. Information on Richard Bruton  Zoom on Richard Bruton  Bruton, Richard.
Information on Ulick Burke  Zoom on Ulick Burke  Burke, Ulick. Information on Catherine Byrne  Zoom on Catherine Byrne  Byrne, Catherine.
Information on Joe Carey  Zoom on Joe Carey  Carey, Joe. Information on Paul Connaughton  Zoom on Paul Connaughton  Connaughton, Paul.
Information on Noel Coonan  Zoom on Noel Coonan  Coonan, Noel J. Information on Joe Costello  Zoom on Joe Costello  Costello, Joe.
Information on Seymour Crawford  Zoom on Seymour Crawford  Crawford, Seymour. Information on Michael Creed  Zoom on Michael Creed  Creed, Michael.
Information on Lucinda Creighton  Zoom on Lucinda Creighton  Creighton, Lucinda. Information on Michael D'Arcy  Zoom on Michael D'Arcy  D’Arcy, Michael.
Information on Jimmy Deenihan  Zoom on Jimmy Deenihan  Deenihan, Jimmy. Information on Andrew Doyle  Zoom on Andrew Doyle  Doyle, Andrew.
Information on Bernard Durkan  Zoom on Bernard Durkan  Durkan, Bernard J. Information on Olwyn Enright  Zoom on Olwyn Enright  Enright, Olwyn.
Information on Frank Feighan  Zoom on Frank Feighan  Feighan, Frank. Information on Martin Ferris  Zoom on Martin Ferris  Ferris, Martin.
Information on Charles Flanagan  Zoom on Charles Flanagan  Flanagan, Charles. Information on Terence Flanagan  Zoom on Terence Flanagan  Flanagan, Terence.
Information on Eamon Gilmore  Zoom on Eamon Gilmore  Gilmore, Eamon. Information on Tom Hayes  Zoom on Tom Hayes  Hayes, Tom.
Information on Philip Hogan  Zoom on Philip Hogan  Hogan, Phil. Information on Brendan Howlin  Zoom on Brendan Howlin  Howlin, Brendan.
Information on Paul Kehoe  Zoom on Paul Kehoe  Kehoe, Paul. Information on Enda Kenny  Zoom on Enda Kenny  Kenny, Enda.
Zoom on George Lee  Lee, George. Information on Ciaran Lynch  Zoom on Ciaran Lynch  Lynch, Ciarán.
Information on Kathleen Lynch  Zoom on Kathleen Lynch  Lynch, Kathleen. Information on Pádraic McCormack  Zoom on Pádraic McCormack  McCormack, Pádraic.
Information on Finian McGrath  Zoom on Finian McGrath  McGrath, Finian. Information on Joe McHugh  Zoom on Joe McHugh  McHugh, Joe.
Information on Liz McManus  Zoom on Liz McManus  McManus, Liz. Information on Olivia Mitchell  Zoom on Olivia Mitchell  Mitchell, Olivia.
Information on Denis Naughten  Zoom on Denis Naughten  Naughten, Denis. Information on Dan Neville  Zoom on Dan Neville  Neville, Dan.
Information on Caoimhghín Ó Caoláin  Zoom on Caoimhghín Ó Caoláin  Ó Caoláin, Caoimhghín. Information on Aengus O Snodaigh  Zoom on Aengus O Snodaigh  Ó Snodaigh, Aengus.
Information on Kieran O'Donnell  Zoom on Kieran O'Donnell  O’Donnell, Kieran. Information on Fergus O'Dowd  Zoom on Fergus O'Dowd  O’Dowd, Fergus.
Information on Jim O'Keeffe  Zoom on Jim O'Keeffe  O’Keeffe, Jim. Information on Brian O'Shea  Zoom on Brian O'Shea  O’Shea, Brian.
Information on Jan O'Sullivan  Zoom on Jan O'Sullivan  O’Sullivan, Jan. Information on Maureen O'Sullivan  Zoom on Maureen O'Sullivan  O’Sullivan, Maureen.
Information on John Perry  Zoom on John Perry  Perry, John. Information on Ruairí Quinn  Zoom on Ruairí Quinn  Quinn, Ruairí.
Information on Pat Rabbitte  Zoom on Pat Rabbitte  Rabbitte, Pat. Information on Dr James Reilly  Zoom on Dr James Reilly  Reilly, James.
Information on Tom Sheahan  Zoom on Tom Sheahan  Sheahan, Tom. Information on P. J. Sheehan  Zoom on P. J. Sheehan  Sheehan, P.J.
Information on Sean Sherlock  Zoom on Sean Sherlock  Sherlock, Seán. Information on Róisín Shortall  Zoom on Róisín Shortall  Shortall, Róisín.
Information on Emmet Stagg  Zoom on Emmet Stagg  Stagg, Emmet. Information on David Stanton  Zoom on David Stanton  Stanton, David.
Information on Billy Timmins  Zoom on Billy Timmins  Timmins, Billy. Information on Joanna Tuffy  Zoom on Joanna Tuffy  Tuffy, Joanna.
Information on Mary Upton  Zoom on Mary Upton  Upton, Mary. Information on Leo Varadkar  Zoom on Leo Varadkar  Varadkar, Leo.
Information on Jack Wall  Zoom on Jack Wall  Wall, Jack.  


Níl
Information on Dermot Ahern  Zoom on Dermot Ahern  Ahern, Dermot. Information on Michael Ahern  Zoom on Michael Ahern  Ahern, Michael.
Information on Noel Ahern  Zoom on Noel Ahern  Ahern, Noel. Information on Barry Andrews  Zoom on Barry Andrews  Andrews, Barry.
Information on Chris Andrews  Zoom on Chris Andrews  Andrews, Chris. Information on Seán Ardagh  Zoom on Seán Ardagh  Ardagh, Seán.
Information on Bobby Aylward  Zoom on Bobby Aylward  Aylward, Bobby. Information on Joe Behan  Zoom on Joe Behan  Behan, Joe.
Information on Niall Blaney  Zoom on Niall Blaney  Blaney, Niall. Information on Aine Brady  Zoom on Aine Brady  Brady, Áine.
Information on Cyprian Brady  Zoom on Cyprian Brady  Brady, Cyprian. Information on Johnny Brady  Zoom on Johnny Brady  Brady, Johnny.
Information on John Browne  Zoom on John Browne  Browne, John. Information on Thomas Byrne  Zoom on Thomas Byrne  Byrne, Thomas.
Information on Pat Carey  Zoom on Pat Carey  Carey, Pat. Information on Niall Collins  Zoom on Niall Collins  Collins, Niall.
Information on Margaret Conlon  Zoom on Margaret Conlon  Conlon, Margaret. Information on Sean Connick  Zoom on Sean Connick  Connick, Seán.
Information on Mary Coughlan  Zoom on Mary Coughlan  Coughlan, Mary. Information on John Cregan  Zoom on John Cregan  Cregan, John.
Information on Ciaran Cuffe  Zoom on Ciaran Cuffe  Cuffe, Ciarán. Information on Martin Cullen  Zoom on Martin Cullen  Cullen, Martin.
Information on John Curran  Zoom on John Curran  Curran, John. Information on Noel Dempsey  Zoom on Noel Dempsey  Dempsey, Noel.
Information on Jimmy Devins  Zoom on Jimmy Devins  Devins, Jimmy. Information on Tim Dooley  Zoom on Tim Dooley  Dooley, Timmy.
Information on Frank Fahey  Zoom on Frank Fahey  Fahey, Frank. Information on Michael Finneran  Zoom on Michael Finneran  Finneran, Michael.
Information on Michael Fitzpatrick  Zoom on Michael Fitzpatrick  Fitzpatrick, Michael. Information on Seán Fleming  Zoom on Seán Fleming  Fleming, Seán.
Information on Beverley Cooper-Flynn  Zoom on Beverley Cooper-Flynn  Flynn, Beverley. Information on Paul Nicholas Gogarty  Zoom on Paul Nicholas Gogarty  Gogarty, Paul.
Information on John Gormley  Zoom on John Gormley  Gormley, John. Information on Noel Grealish  Zoom on Noel Grealish  Grealish, Noel.
Information on Seán Haughey  Zoom on Seán Haughey  Haughey, Seán. Information on Máire Hoctor  Zoom on Máire Hoctor  Hoctor, Máire.
Information on Peter Kelly  Zoom on Peter Kelly  Kelly, Peter. Information on Brendan Kenneally  Zoom on Brendan Kenneally  Kenneally, Brendan.
Information on Michael Kennedy  Zoom on Michael Kennedy  Kennedy, Michael. Information on Tony Killeen  Zoom on Tony Killeen  Killeen, Tony.
Information on Seamus Kirk  Zoom on Seamus Kirk  Kirk, Seamus. Information on Michael Kitt  Zoom on Michael Kitt  Kitt, Michael P.
Information on Tom Kitt  Zoom on Tom Kitt  Kitt, Tom. Information on Brian Joseph Lenihan  Zoom on Brian Joseph Lenihan  Lenihan, Brian.
Information on Conor Lenihan  Zoom on Conor Lenihan  Lenihan, Conor. Information on Michael Lowry  Zoom on Michael Lowry  Lowry, Michael.
Information on Tom McEllistrim  Zoom on Tom McEllistrim  McEllistrim, Thomas. Information on Mattie McGrath  Zoom on Mattie McGrath  McGrath, Mattie.
Information on Michael McGrath  Zoom on Michael McGrath  McGrath, Michael. Information on John McGuinness  Zoom on John McGuinness  McGuinness, John.
Information on John Moloney  Zoom on John Moloney  Moloney, John. Information on Michael Mulcahy  Zoom on Michael Mulcahy  Mulcahy, Michael.
Information on M. J. Nolan  Zoom on M. J. Nolan  Nolan, M.J. Information on Seán Ó Fearghaíl  Zoom on Seán Ó Fearghaíl  Ó Fearghaíl, Seán.
Information on Charlie O'Connor  Zoom on Charlie O'Connor  O’Connor, Charlie. Information on Willie O'Dea  Zoom on Willie O'Dea  O’Dea, Willie.
Information on Noel O'Flynn  Zoom on Noel O'Flynn  O’Flynn, Noel. Information on Rory O'Hanlon  Zoom on Rory O'Hanlon  O’Hanlon, Rory.
Information on Ned O'Keeffe  Zoom on Ned O'Keeffe  O’Keeffe, Edward. Information on Mary O'Rourke  Zoom on Mary O'Rourke  O’Rourke, Mary.
Information on Christy O'Sullivan  Zoom on Christy O'Sullivan  O’Sullivan, Christy. Information on Seán Power  Zoom on Seán Power  Power, Seán.
Information on Eamon Ryan  Zoom on Eamon Ryan  Ryan, Eamon. Information on Trevor Sargent  Zoom on Trevor Sargent  Sargent, Trevor.
Information on Eamon Scanlon  Zoom on Eamon Scanlon  Scanlon, Eamon. Information on Brendan Smith  Zoom on Brendan Smith  Smith, Brendan.
Information on Noel Treacy  Zoom on Noel Treacy  Treacy, Noel. Information on Mary Wallace  Zoom on Mary Wallace  Wallace, Mary.
Information on Mary Alexandra White  Zoom on Mary Alexandra White  White, Mary Alexandra. Information on Michael J. Woods  Zoom on Michael J. Woods  Woods, Michael.

Tellers: Tá: Deputies Emmet Stagg and Paul Kehoe; Níl: Deputies Pat Carey and John Cregan.

Amendment declared lost.

Deputy Ciarán Lynch: Information on Ciaran Lynch  Zoom on Ciaran Lynch  I move amendment No. 10:

Amendment put and declared lost.

An Leas-Cheann Comhairle: Information on Brendan Howlin  Zoom on Brendan Howlin  We move to amendment No. 11. Amendment No. 12 is an alternative and the two amendments may be discussed together.

Deputy John Gormley: Information on John Gormley  Zoom on John Gormley  I move amendment No. 11:

[119]

The amendment inserts two new subsections into section 4 of the Bill. Subsection (5) caters for a situation where a person who owns a principle private residence vacates the dwelling in question because he or she is long-term incapacitated as a result of physical or mental illness. Although the dwelling in question would no longer be used by the person concerned as a principle private residence, a liability to pay the charge could arise. I accept there is an issue here in regard to whether it would be reasonable in these circumstances for the person concerned to incur this liability, notwithstanding the fact the charge is set at a very modest level. I am, therefore, tabling this amendment before the House.

The amendment provides that a number of criteria must be satisfied for the exemption to have effect. In the first instance, the incapacity must be long-term and due to mental or physical illness. Typically, I would expect the incapacity to be brought about by infirmity due to old age or perhaps a form of senile dementia, but other forms of illness could also result in incapacitation. Either way the essential point is that the person concerned is incapable of independent living at the time and in future.

The residence vacated must be the person’s principal residence and if the person does not own the residence in which he or she lives, no charge would arise in any case. If the dwelling vacated prior to entering long-term care were not the person’s principal residence, it is difficult to see why an exemption should be granted in respect of that property because, presumably, it would have been put to some form of economic use. The person concerned must not own the property in which he or she will reside in future. In such a case the person would be the owner of at least two properties and an exemption from a modest charge of €200 would not seem to be required in respect of the property vacated.

[120]Clearly a person who is incapacitated due to long-term illness will require long-term care and this is often, but not always, secured through a nursing home or care centre. In such cases, the Revenue Commissioners will permit the person’s income to be offset against the cost of residing in the nursing home or care centre. It is often the case that the property which was the person’s principal private residence is let out to defray in part the costs of long-term residential care. In bringing forward this amendment I am disinclined to require the person in care to pay the charge in these circumstances. Sometimes the person incapacitated goes to live with or is looked after by someone else, normally a relative. In these circumstances, I am also disinclined to provide that a charge should be paid on what used to be the incapacitated person’s principal private residence. The relative who has taken the incapacitated person under his or her care has probably relieved the State, at least partially, of the cost that otherwise would have been associated with institutional care of one kind or another. I am not inclined to impose a charge in these circumstances even if the dwelling concerned is rented out. In this respect the amendment I propose goes further than that tabled by Deputy Hogan, which referred specifically to a nursing home.

I refer to subsection (6) of the amendment which addresses the issue of what are sometimes referred to as granny flats. In general the Local Government (Charges) Bill does not apply the €200 charge to dwellings that are not separate dwellings. A granny flat that constitutes an integral part of the residence in question will not be liable for any charge, assuming the overall building of which it is part is a principal private residence. Nor will a granny flat be liable for a charge where it is owned by the person or persons who reside there if it is their principal private residence.

The question at issue, therefore, relates only to instances in which a granny flat constitutes a separate dwelling and is owned by someone other than the resident. The amendment is designed to cater for a person who owns the primary residential property of which the granny flat forms a part or is otherwise associated with. I accept a valid case has been made for exempting such properties from the charge. Such accommodation is usually provided by sons and daughters to enable them to look after their parents and in circumstances in which the parents, understandably, wish to retain a measure of independent living for as long as possible. However, it is very much secondary to the consideration to which I referred earlier. In addition, the costs to the State are likely to be a good deal less in cases in which people are being cared for by relatives rather than in long-term care.

I have dealt with the issues and although there is a good deal more I could say I will allow other Deputies speak.

Deputy Phil Hogan: Information on Philip Hogan  Zoom on Philip Hogan  The Minister, Deputy Gormley, stated his amendment went further than the Fine Gael amendment, demonstrating a great hypocrisy. The Minister published legislation which allowed people in long-term care and those with granny flats attached to their homes to be subject to the charge. He accused Fine Gael and the media of being mischievous when we raised the issue, but he now praises himself for introducing an amendment that is better than the Fine Gael amendment. That represents a great political hypocrisy and double standards and it is difficult to take the Minister seriously when he debases politics by making such spurious comments. I welcome the amendment, which had to be dragged out of the Minister through the airwaves on RTE radio 1, as was the case with the mobile home amendment on Joe Duffy’s show. The Minister had to be dragged into reality concerning the category of people included in the charge. He now, however, praises himself for excluding these people.

The family is very important in any community. The Minister sought to impose on families a charge for attaching a granny flat to a principal private residence but such families would be [121]exempt if a mobile home were in the back garden. This represents a lack of joined-up thinking and I have no idea what took place at the Cabinet meeting at which the Minister initially introduced the Bill. I do not understand how it was not spotted in the context of observations from other Ministers on the Fianna Fáil side, of which there are not many here tonight to support the Minister. Nevertheless, I welcome the fact that the Minister has carried out another U-turn with this amendment and that he has put forward an acceptable definition. However, I seek clarification on two aspects. What does he mean by “long-term” in the legislation? How long is “long-term” in terms of mental or physical infirmity in subsection (5)(a)? What is the definition of a relation in subsection 6(b)? It states that, for the purposes of paragraph (a) , a “relative” includes a relation of the spouse or partner of the owner. What is meant by “relation”?

Deputy Joanna Tuffy: Information on Joanna Tuffy  Zoom on Joanna Tuffy  I wish to put a question about the second part of the amendment which would exclude a relative, but the term “granny flat” was mentioned by the Minister. What is the position if someone uses the same unit or property to house an au pair for example? Might someone in that situation get caught for the charge?

Deputy John Gormley: Information on John Gormley  Zoom on John Gormley  An au pair is not a relative. I will revert to the earlier points made by the Deputy. A relative is someone who is a relative, it is as simple as that. It could be a brother or whatever.

Deputy Phil Hogan: Information on Philip Hogan  Zoom on Philip Hogan  In the broadest extent of the term.

Deputy John Gormley: Information on John Gormley  Zoom on John Gormley  This amendment did not have to be dragged out of me.

Deputy Phil Hogan: Information on Philip Hogan  Zoom on Philip Hogan  It did, absolutely.

Deputy John Gormley: Information on John Gormley  Zoom on John Gormley  It certainly did not and if the Deputy spoke to his colleagues in the Seanad or if he read the Seanad debate he would find they were pleased to praise the way in which I conducted the debate. I conducted it in a non-partisan way and I was pleased in an unprecedented way to go outside and to allow them to——

Deputy Phil Hogan: Information on Philip Hogan  Zoom on Philip Hogan  To bring forward an amendment.

Deputy John Gormley: Information on John Gormley  Zoom on John Gormley  ——be briefed thoroughly by my officials. We considered the issue and I could not believe that, while we were conducting those discussions in a most civilised way, the Deputy issued a press release which was mischievous. I stand by my description in that regard. We have examined all the issues and listened at all times to what people have had to say. If the Deputy wishes, we could close our ears to any of the points he tries to make, but I try to be as accommodating as I can and that is what I have done in this case. The result is better quality legislation.

I have stated previously that any of these issues can be considered from the guidance document point of view. We can consider this matter in this way in discussions with the local authorities. I would be pleased to do so in any case but it is appropriate to have a belt and braces approach. I am not here to praise myself, to use the Deputy’s words. I sought to broaden the scope of the legislation. The Deputy chose a certain wording but I believe the wording I have proposed captures a greater number of circumstances. I accept we do not have the opportunity to go through the matter in as much detail as he would wish but I believe our proposals on these two issues are comprehensive and deal with the outstanding issues.

Deputy Phil Hogan: Information on Philip Hogan  Zoom on Philip Hogan  What about the definition of “long-term”?

[122]Deputy John Gormley: Information on John Gormley  Zoom on John Gormley  The Deputy and I discussed the matter outside. Originally the wording was permanent, which was not flexible enough. On the meaning of “long-term”, someone who is residing in a nursing home is often regarded as someone having long-term incapacity and that is the best way to describe it. This is a description that has been used in other legislation so we were of the view that “long-term” was a better way of describing it.

An Leas-Cheann Comhairle: Information on Brendan Howlin  Zoom on Brendan Howlin  As it is now 8 p.m. I am required to put the following question in accordance with an order of the Dáil of this day: “That the amendments set down by the Minister for the Environment, Heritage and Local Government for Committee Stage and not disposed of are hereby made to the Bill, in respect of each of the sections not disposed of, the section, or as appropriate, the section, as amended, is hereby agreed in Committee, that the Title is hereby agreed in Committee, that the Bill, as amended, is accordingly reported to the House, that Fourth Stage is hereby completed and the Bill is hereby passed.”

Question put and agreed to.


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