asked the Minister for Education the reason her Department will not allow legitimate farm expenses, i.e. interest on borrowed money, in the calculation of disposable farm income for the purpose of a third level education grant; if her attention has been drawn to the fact that normal accounting practice as accepted by the Revenue Commissioners is not allowed by her Department; and if she will make a statement on the matter.
Written Answers. - Third Level Education Grant.
72.
The income to be reckoned for higher education grant purposes in the case of self-employed persons is the profits from business or farming activities (including lettings of land, equipment etc.) after deducting expenses incurred in earning these profits, such as rent, rates, wages paid out, repairs to machinery and equipment, purchases of seeds, fertilisers, business interest and stock relief.
When reckoning expenses which may be taken into account as expenses incurred in earning profits no amount should be included in respect of depreciation (including capital allowances such as on plant or equipment), expenditure on the construction of fences, roadways, holding yards, drains or land reclamation, expenditure on construction of farmhouses, farm buildings or business premises.
The amount included for business interest may not be allowable in total as a deduction. Local authorities may therefore require applicants to distinguish between interest payable on loans in respect of items which may be taken into account as deductible expenses and items which are not so allowable. Local authorities are not obliged to accept assessments by the Revenue Commissioners as the sole criterion for determining eligibility for higher education grants.
It is possible to have different criteria when assessing for the purpose of income tax on the one hand and when assessing for the purpose of allocating scarce Exchequer resources for the purposes of providing higher education on the other. Tax documentation may not on occasions be suitable for use in determining eligibility for services.