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Property Taxation Collection – Topical Issue Debate Thursday 25th September

Deputy Anthony Lawlor: I welcome the Minister of State and congratulate him on his new role. I sat beside Deputy Humphreys on many occasions and engaged in good banter with him on the backbenches. I am delighted to see someone who was up here with me – where the pigeons cannot fly – being elevated to a lower level in the Dáil Chamber. I wish him the best of luck in his new role and hope that he will be able to help me today.

A number of constituents have approached me about this issue and I will relay the story of one such constituent to the Minister of State. This concerns a person who wants to pay the local property tax on a weekly basis. She, like many other citizens, wanted to set up a standing order or have the payment deducted from her social welfare payment. She receives a social welfare payment of €188 per week and her local property tax works out at roughly €4 per week. The Department of Social Protection will not allow her to take the payment out on a weekly basis because her income will then drop below the critical threshold of €186.

This is a person who is budgeting on limited funds. She has been asked why she does not pay it on a weekly basis. If she pays it on a weekly basis in cash through the post office, she will be charged a service provider charge of €1, which is an additional €52 per year.

This is a person who would find it difficult to put money aside, as has been suggested. Come the end of the year, in particular last year when only €2 was taken off her on a weekly basis, she has to come up with an additional amount. She gets an additional living alone allowance of €7, which brings her total payment up to €195. If she is allowed pay the €4 off that, she would be above the threshold of €186.

These are situations where recipients are trying to do their best to live within their means and they do not want to be a burden on the State with regard to the local property tax. It is an anomaly within the system. What we should look at is the total payment being given to this person and other such individuals which would bring them way above the threshold of €186 so that they could have a deduction taken directly out of their social welfare payment. They pay their ESB bill and gas bill by direct debit when they come in where none of this seems to come into effect, but social welfare has dictated the €186 threshold. Claimants receive a living alone allowance which brings them way above it. We should look at the total payment from a social welfare perspective that they receive rather than the individual payment that may put them in the difficulty that they are in at present. The Minister should allow that supplementary payments be taken into consideration when calculating the supplementary welfare allowance which, in this and other cases, would allow them to pay directly their local property tax from their social welfare payment without having to make alternative arrangements.

   Minister of State at the Department of Social Protection (Deputy Kevin Humphreys): I thank Deputy Lawlor for his kind words. I am sure we will see him down in these low elevations as well at some stage.

The Deputy will be aware that the Finance (Local Property Tax) Bill 2012 allows for a person who is liable for the local property tax, and who is in receipt of certain social protection payments, to have local property tax deducted from their payments. The Revenue Commissioners have agreed with the Department of Social Protection a number of schemes from which the deduction at source facility for this tax can be made.

Deductions of local property tax, LPT, from social protection payments commenced in July 2013. With effect from 5 September 2014, there are 23,562 customers having deductions for local property tax from social protection schemes.

In order to maintain statutory minimum incomes and in order to ensure that a customer is left with enough resources to live on, the Finance (Local Property Tax) Act 2012 provides that deductions from social welfare payments in relation to the local property tax will not breach the statutory minimum income guarantee as set out in the Social Welfare Consolidation Act 2005. That rate is currently set at €186 per week. The maximum personal rate of pension for someone under age 66 on a widow’s, widower’s or surviving civil partner’s (contributory) pension is currently €193.50, thus only €7.50 per week can legally be taken from this payment in order not to bring the recipient below the basic social assistance personal rate of €186 per week. For those aged 66 and above, with a maximum pension of €230.30 per week, the total amount that can be deducted is €44.30. This amount is calculated after any deduction is made for recovery of any existing court orders or social protection overpayments and is based on the primary personal rate only.

Secondary payments which cover specific benefits are not taken into account in determining whether a claimant’s scheme payment is greater or less than €186 per week. This is provided for in section 92(2) of the Finance (Local Property Tax) Act 2012. Where a customer is not eligible for the deduction at source facility or where the deduction level allowable will not meet the customers LPT liability in full, he or she will be contacted by the Revenue Commissioners so that an alternative payment arrangement can be made from the payment options available.

The Minister for Social Protection appreciates the convenience for social welfare recipients of having the deduction facility in place but her overriding obligation is to have safeguards which ensure that a customer is not left without sufficient income. The Minister is reviewing the implications of allowing customers to have deductions made from their welfare payment on a voluntary basis which has the effect of bringing their payment below the basic rate in some clearly defined instances. This is a complex area with intertwined policy and legal implications and it requires careful consideration before any final decision is made in this regard.

   Deputy Anthony Lawlor: I thank the Minister of State for his response. I reiterate the basic payment that this person and others receive is €188 and from the perspective of the €186 threshold, they are snookered.

I take comfort from a sentence of the Minister of State’s reply that, “The Minister is reviewing the implications of allowing customers to have deductions made from their welfare payment on a voluntary basis.” If they were allowed do it on a voluntary basis, and go into the Department of Social Protection and make the case, whether through me or themselves, would the Minister accept that being taken into consideration instead of having to go through legislation? It is commonsense. Where someone goes in there voluntarily to make the payment, would the Minister take that into consideration?

   Deputy Kevin Humphreys: I thank Deputy Lawlor. I am happy to engage further with him on this after the debate to see can we come to some resolution. As I outlined in the reply, it is quite complex and there are clear guidelines in relation to it. We will have to look at it extremely carefully because we do not want to push recipients below a minimum rate.

As I stated, the Minister indicated that she will review this. I will certainly take Deputy Lawlor’s concerns and suggestions to the Minister and I will talk to him further after the debate to see can we work out a satisfactory resolution. In saying that, I am not making any promises because, as I outlined in the reply, this is extremely complex. I am happy to take this to a further discussion with Deputy Lawlor and I hope he will be happy with that.

ENDS