Dáil Éireann debate -
Wednesday, 29 Sep 1999

Vol. 508 No. 1

Written Answers. - Health and Employment Levies.

Bernard Allen

Question:

366 Mr. Allen asked the Minister for Finance if he will remove the obligation on pensioners to pay a health contribution levy of 1.25 per cent as well as a training levy of 1 per cent in view of the fact that they are not receiving State pensions other than occupational pensions from their former places of employment. [18332/99]

Minister for Finance (Mr. McCreevy):

Firstly, I would point out that in the 1999 budget announced last December I announced a significant restructuring of the levies. The employment and training levy of 1 per cent was abolished and the health contribution levy was increased from 1.25 per cent to 2 per cent which resulted in a reduction from 2.25 per cent to 2 per cent in the combined levy charge. The threshold under which there is no liability to pay the levy was also increased from £10,750 to £11,250. These changes took effect from 6 April this year.

The health levy is charged at a rate of 2 per cent on a person's total income from all sources with only a few exceptions, e.g. social welfare payments. However, the 1994 budget introduced a low income exemption threshold for the levies of £173 per week or £9,000 per annum which means that where a person's reckonable income is lower than the threshold they are not liable to the levies. However, when a person's income rises above the threshold the levies are payable on the person's total income. Following this year's budget the threshold is now £940 per month or £11,250 per annum. The current threshold ensures that most pensioners on low incomes are exempt from the levies.

While there are no proposals to abolish the levy, I can confirm that the position generally, including the level of the threshold, will continue to be reviewed as are all other taxes or levies in the context of the annual budget.