Dáil Éireann debate -
Tuesday, 2 Nov 1999

Vol. 509 No. 6

Written Answers. - Higher Education Grants.

Richard Bruton

Question:

611 Mr. R. Bruton asked the Minister for Education and Science the reason capital allowances and finance leases are no longer deductible in computing reckonable income for higher education grant purposes; the estimated saving in grant payments as a result of this changed rule; and if he will make a statement on the matter. [21434/99]

Dan Neville

Question:

612 Mr. Neville asked the Minister for Education and Science if he will alter the stipulation which disallows the inclusion of financial leasing for the purchase of farm machinery when determining entitlement to a higher education grant. [21435/99]

Minister for Education and Science (Mr. Martin)

It is proposed to take Questions Nos. 611 and 612 together.

The assessment of means under the third level student support schemes maintenance grants scheme is based on gross income with certain deductions for specified social welfare and health board payments. When assessing income from self-employment-farming the amount assessed is the adjusted profit-loss for income tax purposes from all self-employment activities – both Irish and foreign – whether they are exempted or relieved from Irish income tax. Capital allowances and other capital related costs, such as interest on borrowings used to purchase fixed assets, are not deductible from the adjusted profit in computing reckonable income for grant pur poses. These means test arrangements have been in operation since 1983 and are of general application.

Finance lease arrangements are an alternative method of funding the acquisition of fixed assets. The lease payments are comprised of two elements, repayment of the "purchase outright" cost of the asset and finance charges levied by the lease company. As these two elements are directly related to capital additions, the expenditure is not deductible for higher education grants purposes.

However, expenditure relating to operating leases is deductible in calculating reckonable income for the purposes of the grant.

As already stated, these means test arrangements have been in operation since 1983 and I have no plans to alter the method of computing reckonable income for the purposes of the student support schemes.