JOINT COMMITTEE ON FINANCE AND THE PUBLIC SERVICE debate -
Wednesday, 29 Jun 2005

Disabled Drivers and Passengers Scheme: Presentation.

Chairman

Item No. 3 on our agenda is a discussion with representatives from the Department of Finance on the disabled drivers and passengers scheme. The committee is joined by Ms Niamh Campbell, Mr. John Burke, and Mr. David O'Sullivan from the Department of Finance, and Mr. Paddy Barrett and Mr. Ciarán Coyle from the Revenue Commissioners.

On behalf of the committee I welcome the witnesses and thank them for attending. I draw attention to the fact that while members of the committee are protected by parliamentary privilege, this privilege does not apply to visitors. Members are also reminded that they should not comment on, criticise or make charges against a person outside the committee or the Houses. We will commence with a presentation from Ms Campbell and this will be followed by an open discussion with committee members.

Ms Niamh Campbell

I thank the joint committee for inviting us to brief you on the disabled drivers and disabled passengers tax concessions scheme. I am head of the indirect tax policy section in the Department of Finance. My colleagues from the Department are Mr. John Burke and Mr. David O'Sullivan, and from the Revenue Commissioners national excise section, Mr. Ciarán Coyle and Mr. Paddy Barrett. I have asked the clerk to circulate my opening statement and some background material to the members.

In my brief opening statement I will outline the background to the development of the current scheme for disabled drivers and passengers, the benefits and operation of the scheme. I will speak on the report of the interdepartmental review group published in June 2004 and I will update the committee on recent developments on the medical board of appeal for this scheme. After the opening statement I will be happy, with the assistance of my colleagues, to answer questions.

The disabled drivers scheme dates back to 1968 when relief from road tax was made available under legislation for persons with a disability meeting specific medical criteria. Since 1968, the scheme has been extended and amended on many occasions. In the background material which I have asked the clerk to circulate to members a table sets out various changes made to the scheme over the years.

In 1969 excise relief on fuel was made available to persons in the scheme. In 1972 VAT relief was introduced and in 1976 VRT relief was included. This brought the total relief available to 50% of the purchase price of a car. Over the years the medical criteria have been broadened to include four additional medical grounds in 1989 and one additional medical ground in 1993. The statutory basis for the current scheme is section 92 of the Finance Act 1989 and supporting regulations were made in 1994, 2004 and 2005.

Access to the scheme is on the basis of medical criteria set out in section 3 of the 1994 regulation and I have included a copy of this in the material circulated by the clerk. A person who qualifies under these criteria is issued with a primary medical certificate by the senior area medical officer of the local section of the Health Service Executive. Possession of this certificate then qualifies the holder to claim the benefits of the scheme as a qualifying driver or a qualifying passenger. The legislation also provides for an appeals procedure where the primary medical certificate is refused, with an independent board of appeal appointed by the Minister for Finance on the nomination of the Minister for Health and Children. The regulations include non-profit organisations involved in transport of persons with disabilities.

The benefits of the scheme for qualifying persons are set out in the legislation. Briefly, they consist of full relief on VAT and vehicle registration tax, VRT, in the year of purchase, subject to the limits detailed in the opening statement, relief from excise duty up to a maximum of 600 gallons per year, and exemption from road tax. The average total annual value of the benefits for people in this scheme is estimated at €5,250 per claimant. In the first year a claimant receives benefits relating to the purchase of the car, in subsequent years the benefits received are fuel relief and road tax.

A practical example of what this means is given in the review group's report. The group took the example of a Ford Mondeo car, with an open market selling price of €21,695. The total benefit in the year of purchase, including VAT, VRT, road tax and excise relief was €9,659. That meant the relief amounted to 44.5% of the purchase price of the car.

The most recent data on the overall scale and scope of the scheme available from the Revenue Commissioners shows the total number of claimants in the system at the end of 2004 was 8,900. This is made up, in rough terms, of approximately 3,500 drivers and 5,500 passengers. The total cost of the scheme, excluding road tax in 2004 was €45 million. When road tax is included, the cost is estimated at approximately €50 million per annum.

In 1998, an interdepartmental group was convened to review the operation of the scheme. The group was chaired by the Department of Justice, Equality and Law Reform and had representatives from the Departments of Finance and Health and Children, the Revenue Commissioners and the Department of Social and Family Affairs.

The terms of reference of the group were to examine the operation of the existing scheme, including the difficulties experienced by the various groups and individuals involved with it and to consider the feasibility of alternative schemes, with a view to assisting the Minister for Finance in determining the future direction of the scheme. The group finalised its report in September 2002. Following consideration by Government, the report was published in July 2004.

I will briefly outline the key issues and recommendations of the report. It sets out in detail the history of the scheme, the current benefits, the Exchequer costs and the requests to broaden the eligibility criteria. It shows the escalating costs of the scheme, which increased from approximately €5 million in 1994 to €36 million in 2003 and to €45 million in 2004. The report shows that similar schemes in other countries are relatively less generous. It deals with the difficulties associated with the medical criteria, the pressure to broaden or extend these criteria and the potential large-scale numbers that would be involved if the scheme were broadened. It states the three main areas of concern are restrictive access to the scheme, insufficient resources for the appeals system and increasing pressure on the passenger side of the scheme.

The report makes a number of recommendations, divided into short-term immediate recommendations and longer-term recommendations for the future development of the scheme. The immediate recommendations relate to streamlining the appeals process. The longer-term recommendations are not costed, and they include replacing the medical criteria with a mobility focused assessment system, separating the driver and passenger components and converting the passenger scheme to a direct payment system. It also suggests introducing a minimum age limit for beneficiaries, increasing the period for which a vehicle must be held from two to three years, and equalising the reliefs available for drivers and passengers. As set out in the report, the Department of Finance reserved its position on a number of the recommendations in the absence of a full examination of the associated costs and implications and consideration of other options for the most effective use of resources for persons with a disability.

With regard to developments since 2004, as I have already stated, the Government considered the report of the interdepartmental review group in June 2004. It decided to implement the improvements to the appeals process with immediate effect. It also decided that the Minister for Finance would consider the longer-term recommendations on an ongoing basis in the context of the annual budgetary process, having regard to the existing and prospective cost of the scheme.

The priority since then has been to improve and revamp the appeals system, which was one of the three main areas of concern identified by the group. Following the Government decision, the Minister signed regulations in 2004 to expand the number of doctors on the board of appeal from three to five in order to facilitate more frequent meetings of the board. The second amendment to the regulations is technical, and is aimed at discouraging repeat appeals by appellants who do not meet the criteria. This was identified as a logjam in the appeals system by the review group report.

In addition to these changes recommended by the review group, it was decided, having examined the operation of the board of appeal, to put in place new and streamlined arrangements. The purpose of this was to enable the backlog to be cleared as a priority and provide a better service to clients. This involved an additional amount of €300,000 being provided in the Estimates of the Department of Finance for this purpose. A full-time medical consultant was appointed by the Minister in March 2005 in order to oversee the clearing of the backlog. New administrative and IT support systems are also being put in place.

While the board is independent in the exercise of its functions, new reporting arrangements are also being put in place so the Department of Finance can monitor its operation more effectively. A liaison person has been nominated within the Department to deal with the board on operational matters arising. In April 2005, the Minister signed further regulations increasing the number of practitioners on the board to ten. This should ensure that panellists on the board of appeal will always be available to service meetings of the board. These changes enable the board to operate in a much more satisfactory and streamlined manner, to deal with appeals more speedily, to clear the backlog and to provide a better day to day service to clients of the scheme.

The issues raised in the interdepartmental review group's report with regard to the more general future development of the scheme are complex. They raise fundamental issues on the intended scope and purpose of the scheme. Some of the recommendations would extend the scheme while others would constrain it. In line with the Government decision on the report, the Minister will continue to consider the recommendations in an annual budgetary context. In this regard, the key challenge is to seek to ensure that the current scheme is managed effectively and efficiently and that any changes will have the optimum outcome in terms of effective use of resources in promoting access and participation for persons with a disability.

Chairman

I thank Ms Campbell for her opening presentation.

Deputy Nolan

I join the Chairm

an in welcoming the delegation. My personal observations of the scheme, through dealing with clients who have availed of it, are that it is relatively generous. An individual who makes an application that is accepted finds it rewarding to be able to avail of the scheme. I note the delegation states in its contribution that more resources, IT, personnel and funding have been provided for the appeals structure. Is there any indication as to when the backlog of appeals might be cleared?

I understand there may be a wait of up to two years for some recent appeals. Has the Department estimated the cost of implementing all of the recommendations? Ms Campbell mentioned that in 2004 the scheme cost in the order of €45 million and if one takes the concession on car tax into account, the cost was €50 million. What is the estimated cost, including the car tax provision, for 2005? Ms Campbell also touched on the fact that the Irish scheme is very generous in comparison with international schemes. In what way is Ireland more generous than its European neighbours?

Ms Campbell

The Deputy's first question was on the clearing of the backlog. That backlog is one of the main reasons that the board has been put on a more robust footing. My information is that the new board of appeal will meet approximately 30 times per year, which is a major improvement on previous years, when the board only met seven or eight times a year. Approximately ten cases are dealt with at each meeting of the board. The Department will be monitoring progress with the board on an ongoing basis but already applicants are having their appeals dealt with much more speedily and I am confident that the backlog will be cleared. We have made significant inroads into it this year.

Deputy Nolan

What is the estimated timescale?

Ms Campbell

It is difficult to say because the new board has only just been put in place. We will take stock of the situation later this year to determine how many cases are being processed. We will have a clearer idea of progress by the end of this year. The Deputy also asked about the cost of implementing all the review group's recommendations. The review group was unable to cost many of the longer term recommendations because there are many unquantifiable elements therein. The cost of the scheme was approximately €45 million in 2004. According to the review group, the potential number of applicants seeking access to the scheme, on the basis of submissions for numerous organisations, is 95,000. That is ten times the number of current applicants. Therefore, one could say that the cost could be anything from €45 million to €450 million.

The report of the review group, which is published on the Department's website, contains a considerable amount of information on schemes in operation in other countries. The group collected information on schemes in 14 other countries — both EU and non-EU — and summarised the provisions in each. Eight of the 14 countries for which data was obtained give some measure of tax relief on vehicle purchase or cost of adaptations. Ireland has the most favourable rules in terms of the retention time for the vehicle. In Ireland, the rule is two years while in other countries, it is between three and seven years. Austria has a comparable range of subventions but the retention time for the car is five years.

One of the recommendations of the review group was that age limits be introduced. There are no age limits in the Irish scheme at present, although there is obviously a limit in terms of obtaining a driving licence. In Sweden and Portugal, for example, age limits apply. There is a considerable amount of information available and the conclusion of the review group is that the Irish scheme is relatively more generous than comparable schemes abroad. In the United Kingdom, the scheme in operation is totally different to ours, in that it is not a tax relief scheme. The British scheme is called Motability and makes leased or hire purchase cars available to disabled drivers. That scheme is also explained in detail in the report of the review group.

Deputy P. McGrath

I welcome the delegation. It is the first time since I have been in the Oireachtas that I have had the opportunity to discuss this scheme with a relevant body. The scheme is very worthwhile.

As politicians, we are only aware of applications that are turned down or that enter the appeals process. Disgruntled people who have failed at the first hurdle are more likely to contact us, which may mean that we have a slightly slanted view of the scheme and how it operates. I am sure there are many people who make their applications, are processed at local health board level and who proceed with no difficulties.

I recognise the fact that a ceiling was placed on the size of the engine in an eligible vehicle in 1992. At that time it was highlighted in newspapers that an individual bought a Jaguar SJ6 on a disabled scheme and sold it two years later at considerable profit. It was because of such cases that the restrictions were introduced.

However, as with any scheme that has definite restrictions and cut-off points, difficulties arise for some people. For example, a severely disabled man in my constituency, who is over six feet tall and weighs approximately 20 stone was using a motorised wheelchair. He was approved for the disabled vehicle scheme but he needed a vehicle that could accommodate him and his wheelchair and such a vehicle would have an engine size greater than the 2 litres allowed under the scheme. He appealed and won when an individual in the Revenue Commissioners took a sympathetic view and agreed that his was a special case.

A degree of flexibility should be allowed for cases like the one to which I have just referred. In such circumstances, where an individual gets a specially adapted vehicle, he or she is not likely to change it in two or three years. It is more likely that the vehicle will be maintained for as long as possible — probably a minimum of ten years. In that way, I believe the scheme is overly restrictive. On the other hand, I can understand the issue regarding those who are not severely disabled, who could buy a flashy car with funding from the scheme and then make money by selling it.

The reality of the scheme is that if people are in a position to buy a new car and avail of the primary medical certificate, they can change their car every two years, free of charge. The reduction in tax obtained on the cost of the car means that when it is traded in after two years, it is worth the same as a new car.

Ms Campbell noted that 8,900 claimants were within the system at the end of 2004. Does that mean that 8,900 people made claims for a new vehicle in 2004 or does this figure represent new entrants or the total number of people in the scheme? Some may have availed of the scheme some years ago and possess the same vehicle.

On the appeals mechanism, Ms Campbell mentioned that the review group made recommendations and that a new body has been established. Within the past ten days, I spoke to somebody in the appeals office regarding a constituent. The message I received was that many months would pass before the appeal is addressed. Can Ms Campbell countenance a situation where somebody who was formerly mobile but lost movement due to a stroke is recovering and requires an adapted vehicle? The application for a primary medical certificate is initially rejected by the health board, which appears to be a standard procedure, and is appealed. Can Ms Campbell imagine having to wait six to 12 months until somebody decides to process the case? The person is uncertain whether he or she will become mobile. In human terms, is it not terrible that somebody who has been suddenly disabled must wait to learn whether he or she may regain mobility? I believe Ms Campbell will agree that it is unacceptable.

It is important that we pull out all the stops to ensure that the backlog is cleared and that people are dealt with in a reasonable period. I suggest that 30 days would represent such a period. Let us put ourselves in the situation of waiting for something. The Chairman and I have dealt with our colleagues for a long time in various guises. People can be impatient. Is it not ridiculous that the appeals take so long? I hope I made my point with sufficient strength. I find it difficult to countenance that only 300 cases will be resolved within the next 12 months. Ms Campbell might tell us the number of cases which are before the appeals board at present. That will give us a better indication of the speed with which they will be resolved.

My final point concerns the issue of passengers in cars for whom the primary medical certificate and the necessary reduction in the cost of the vehicle have been obtained. Will Ms Campbell explain the nuances of that scheme? I used to believe that, in order to avail of the scheme, a passenger in a car had to be travelling to work. He or she needed to be driven to work. Is that the current situation? The people most likely to avail of this are stroke victims. I have recently seen that the family of somebody who suffered a stroke can get a modified car. What are the criteria in terms of qualifying for this scheme? Is it work related or does it involve transporting people or giving them an occasional break? Is qualification entirely based upon medical criteria?

Standards appear to vary. Newspapers occasionally report that, despite the loss of a foot, a victim did not qualify for the scheme. One does not qualify for the scheme through the loss of one foot or arm, yet one may qualify by losing an arm and a leg. Combinations such as these can bring the system into discredit. Is it not important that somebody with the use of one arm rather than one leg should have a specially modified car?

Ms Campbell

The first comment by the Deputy was on the ceiling on engine sizes. The introduction of this scheme was not to facilitate the purchase of luxury cars. The engine size restriction applies to the driver's side of the scheme. In terms of the passenger side of the scheme, the engine size is 4,000 cc in recognition of the fact that a bigger car may be required where the qualified individual is a passenger. Flexibility was permitted in the case with which the Deputy was involved. The report notes that 85% of claimants change cars every two years. The engine size control is therefore seen as an important part of the scheme.

On the breakdown of the 8,900 people in the system at the end of 2004, this figure represents all the people to have made a claim in 2004. Some of these claimed for excise relief and others claimed VAT and VRT on new cars. This is an accurate picture of the numbers involved in the scheme. My colleagues from the Revenue Commissioners may be able to supply further details.

Mr. Ciarán Coyle

In 2004 there were 8,900 active people in the scheme. This figure is comprised of people who made a claim for VRT, VAT or fuel. Of these, 4,301 made claims for VAT, VRT or emissions in 2004. The latter figure includes 1,776 drivers who claimed a total of €13.2 million and 2,525 passengers for a total of €24.6 million. Additional claims were made by qualifying organisations in respect of 190 vehicles for a total repayment of €3 million.

Deputy P. McGrath

Can Mr. Coyle explain the difference between the driver and the passenger? Does a different rate of refund apply? I apologise for being ignorant of the matter.

Mr. Coyle

The car size limit for a passenger with a primary medical certificate is 2,000 cc. A maximum refund of €9,525 is allowable. A minimum number of modifications must be made to the car, which could consist of as little as putting a knob on the steering wheel, and the vehicle must be retained for two years.

Deputy P. McGrath

Is that for the driver?

Mr. Coyle

Yes. The car size for a passenger within the scheme is 4,000 cc and the maximum allowable refund is €15,875. The cost of the modifications must be equal to or exceed 10% of the value of the car and the vehicle must be retained for two years.

Chairman

Is that the open market value?

Mr. Coyle

The open market selling price.

Deputy P. McGrath

Am I mistaken in saying I have seen cars where the passenger qualified but there is only a swivel seat in the passenger side?

Mr. Coyle

That is possible.

Deputy P. McGrath

That could not have cost 10% of the value of the car.

Mr. Coyle

It may well have done. A swivel seat may appear to be the only modification but there may be others. The Revenue Commissioners take a broad view of the modifications and any made for the comfort of passengers qualify. Revenue staff are not experts in determining what modifications in the car will satisfy the conditions. If we have prima facie evidence, such as an invoice from a garage, that a car has been modified at a cost of 10% of its market value we would normally accept that.

Deputy P. McGrath

Can a Mercedes costing €60,000 with a swivel seat in the front qualify?

Mr. Coyle

It can, subject to the maximum refund. Where the car is a Mercedes costing €60,000, however, our suspicions may be raised. In that case a Revenue auditor will visit the garage that did the work, or the owner's house, to examine whether the modifications satisfy the requirements of the law.

Chairman

Have there been many such inspections?

Mr. Coyle

Yes. We inspect approximately 10% of vehicles but over the years abuses have been found to be rare.

Deputy P. McGrath

Can I have an answer to my question on the backlog in the appeals system?

Ms Campbell

There have been difficulties with the appeal board and a backlog has built up. This is covered at length in the report of the interdepartmental review group. There are currently some 600 cases in the system. As I said, however, a significant number of measures have been put in place to address the backlog. The number of doctors available to attend meetings of the review group was increased from three to five and has now been increased again. There is provision for ten and seven have already been appointed.

One of the problems was that doctors were not available so the appeal board was not able to meet often enough. There is a full time medical consultant whose job is both to chair the meetings of the board and to oversee the operation of the whole system. A sum of €300,000 has been provided for in the Department of Finance Estimates for the running of the board of appeal. A new full time secretary has been appointed and a new IT system installed. A much more solid infrastructure is in place and we expect to be able to make significant inroads into the backlog during the course of the year.

Deputy P. McGrath

Did Ms Campbell say earlier that there would be 30 meetings in a year dealing with ten cases each?

Ms Campbell

They are dealing with approximately ten cases per session and they expect to meet 30 times in a year.

Deputy P. McGrath

Perhaps I am a slow learner but 30 meetings in a year multiplied by ten cases is 300 cases. There are 600 outstanding cases so it will take two years to clear those, in addition to the new cases that arise. The case I am dealing with, which was submitted last week, will not be looked at for two years. It is not reasonable that people who have had strokes or who have other injuries have to wait two years to have their case heard. It is not the fault of Ms Campbell as she can only work with the resources provided by the Department. With the Chairman's agreement, however, I suggest the joint committee issues a strong statement to the effect that it is not acceptable.

Deputy Burton

I apologise for being late but it is difficult to attend when meetings coincide with the Order of Business, as Deputies Bruton and Ó Caoláin have also found. I had an opportunity to get hold of the papers, however.

I wish to put a number of points to the representatives from the Revenue Commissioners and the Department of Finance. Do they agree that they should not be administering this scheme as they do not have the skills or the resources to do so? A bureaucratic nightmare has developed for disabled people and their families that puts one in mind of a game of snakes and ladders, where people have to make a number of moves and qualification depends on how clever those moves were.

The administration of this scheme should be taken away from the Department of Finance and given to the Department of Social and Family Affairs or an agency which has experience of assessing persons with particular needs and of dealing with a large volume of cases. It is extraordinary that the Revenue Commissioners and the Department of Finance can hand away billions of euro every year in property-related tax breaks with very little scrutiny but monitor these schemes in minute detail even though their scale is tiny by comparison in the context of the public finances. Has the Department of Finance examined the opportunity cost of the way it has administered this scheme over a long period of time?

The increase in the number of medical referees and in the frequency of board meetings expands the bureaucracy of the scheme but, as Deputy McGrath said, it will take decades to get through them all. If people become disabled, suffer a stroke or are born with a disability the best national and international practice is to enable them as a priority to become as self-supporting and active as is possible within the limits of their physical disability. This requires access to all mechanical aids and devices to assist them to become independent either on their own or with the support of their family. I have been a director and patron for a long time of the Centre for Independent Living, which was formed in the early 1990s and which has enabled people who were born with serious disabilities to achieve independence who would previously have had to go into the Cheshire home at the age of 17 or 18 because they had no means to get around independently.

Access to vehicles is essential for people in this situation, who range from those with severe restrictions to those with extremely severe restrictions in their movement. The severity of the restrictions in movement of this particular group of wheelchair users means that most, with the help of Government supports introduced in the early 1990s, have access to personal assistants who often act as translators as well as helping the wheelchair users move around. I was involved in the introduction of these Government supports along with a former Minister for Social Welfare, Michael Woods.

Most of these people need large-scale vehicles, like a van, with a swivel chair because they need to use their wheelchair all the time. They also need a ramp to enter and exit the vehicle while still in the wheelchair. Often they need a driver in addition to the personal assistant. The reality of this type of scheme is that it is very bureaucratic. Deputy Paul McGrath stated that the Department of Finance did not conjure this up but that the Minister decided it should continue like this. Has anybody thought outside the box? Could the scheme be moved from the remit of the Department of Finance and moved to a Department that is used to assessing people and doing so within a reasonable timeframe for large numbers of people?

With regard to the cost issue raised by Deputy Paul McGrath, the way the scheme is administered is similar to the scheme for disabled bathrooms. A licence is being created for operators and garages to charge enormous amounts and increase prices for modifications so that the 10% threshold is reached. There is no point applying unless the threshold for modifications is reached. I know the threshold was introduced to stop possible abuse but the reality is that another barrier has been created. As a result, the cost of adapting vehicles in Ireland is three times the average price on the European mainland. Deputies have heard this recently in discussing the fitting of safety belts to bus seats following the awful bus crash in Meath. Relatively low prices were quoted per safety belt for the job in England, but the price in Ireland would have been roughly ten times that price. The way this scheme is designed is increasing the adaptation cost to ludicrous levels in many cases. This is another reason the scheme as it stands must be radically changed.

I have dealt with a long-standing case where a person with a very severe disability requires a personal assistant and a driver. This person nonetheless lives an independent life in an adapted house, albeit with enormous difficulty. This person requires a large van. It should be remembered that some people must bring oxygen bottles etc. with them. The person I have dealt with bought a second-hand van about seven years ago. The cost of adapting the van was higher than the purchase cost of the vehicle because of the rules of the scheme. Within a period of two to three years the van was almost at the end of its service life and had to be replaced with a new van. To this day the person is in debt to a lending agency, at high rates of interest, to the tune of around €40,000 or €50,000. This money was borrowed to meet needs for mobility, to try to qualify for this scheme and to deal with its bureaucracy and administration.

A number of disabled people have found themselves in such financial difficulty. The blame is not particularly with people from the Revenue Commissioners who receive a scheme that they are told to administer. When the manner in which the scheme is dealt with is compared with the billions given in property-based tax breaks, a nitpicking attitude is evident which makes adapting a van or a car both expensive and very bureaucratic. The issue should be examined to see where the scheme could be best put and administered, like many social welfare schemes, in a way that is clear, efficient and fair to people that require it. Ultimately, if these people can be given the chance to be mobile and live in their own home and community, the result of reducing costs to the State will be fantastic, even if one speaks in economic terms in the Department of Finance.

Ms Campbell

The first question asked by Deputy Burton was whether the Department of Finance agreed with the proposition that it and the Revenue Commissioners should not administer this scheme. The answer is recorded in the report of the review group following its consideration of converting the passenger side of the scheme from a tax-based system to a direct payment system and expenditure scheme, which I believe the Deputy was referring to. The Department of Finance did not endorse this recommendation and referred to operational and control issues arising from it. In so far as the Department has a position on this issue, it is recorded in the review group report. I refer the Deputy to the fact that in eight of 14 countries considered, tax-based systems were in place.

With regard to the question on the medical criteria, I am aware from parliamentary questions and representations that many people who seek access to this scheme do not qualify. The report of the review group mentions a potential number of 95,000 people who could seek access to the scheme. The medical criteria are set down in the regulations, and extending them would have implications, not least of which would be cost. Any change in the criteria would obviously be a matter for the Minister. While it is stated that cost implications would be associated, the question also exists of what the best use of these resources would be in terms of promoting opportunities for persons with a disability.

I cannot comment on the cost of adaptation as it is not an issue that has surfaced in our engagement with the scheme or the review group report. Perhaps the Revenue Commissioners are aware of the issue.

Deputy Burton

Has the Department carried out any opportunity cost examination of enabling disabled people to be out and about in the community? Members here often get the argument with property-based tax breaks that the economic benefit of such breaks justifies the billions in tax forgone on them. At some level in the Department somebody must look at opportunity costs, but has it been carried out on this scheme?

Ms Campbell

Can the Deputy clarify exactly what she means?

Deputy P. McGrath

A cost-benefit analysis.

Deputy Burton

Yes, a cost-benefit analysis. Disabled people, whether born with the disability or having a severe disease, used to and still leave their homes and go into institutional care much sooner than they would otherwise have to if they had plenty of support and adaptation assistance available. With modern technology and adapted vehicles etc. these people can have a very high and productive quality of life. This means their burden in medical and associated care costs to the State is lessened.

Ms Campbell

I am not aware the Department of Finance has done this, certainly in respect of the disabled driver's scheme. It has not been done in my area of responsibility. The Department is involved with the cost of disability working group which is examining the additional costs associated with disability in a wider context. The aforementioned has not been done in the excise unit of the Department.

Deputy C. Murphy

I welcome the delegates and appreciate the opportunity to ask some questions. I was aware that the interdepartmental group had started its work in 1998 and concluded in 2002. The report was published two years later.

It is extraordinary a backlog was allowed to build up, given that the number considering appeals was clearly deficient in meeting demand. An administrative deficiency was the primary reason for such a big backlog. Why did the Department not notice this and take action without requiring the publication of a report by the review group? There was a scheme in place and people were entitled to feel it should be administered properly.

From my reading of the published report, I note the core recommendations concern the emergence of an entirely different scheme that would be more mobility than revenue-based. People feel very aggrieved and have a reason to feel that way because the medical criteria for the scheme are incredibly restrictive. I know there have been only four or five changes to it since its inception.

A stroke tends to affect one side of one's body. Many are excluded from the scheme by virtue of the fact that their disability does not satisfy the criteria. They are unlikely to be included if an arm and a leg on only one side of their bodies are affected. The appeals mechanism is concerned only with whether one satisfies the criteria and does not allow one to qualify on the basis of a broader range of medical grounds. Another group with a very justifiable reason to feel aggrieved comprises those with multiple sclerosis, a progressive disease.

The scheme totally denies people with disabilities an opportunity to have an independent means of earning a living. It is fundamentally flawed. Given that it excludes a range of people who should be included in any scheme dealing with persons who have a disability, I am not sure transferring responsibility therefor from one Department to another will make any difference whatsoever. What is the Department doing to try to reduce the backlog apart from changes made regarding appeals and adding to the number who will hear the appeals?

The other two fundamental recommendations made in the report concerned the criteria pertaining to the scheme. What is happening in the Department in this regard? Are there discussions, costing proposals or plans to address the problem?

On the point made about the cost-benefit analysis, all too often one thinks only of the cost when addressing the issue of disability. We do not recognise the benefit whereby someone who is dependent becomes independent or semi-independent. Instead of being dependent on social welfare, one might become independent by becoming a taxpayer. There are many criteria that could be included in the scheme which would allow one consider the benefits rather than merely the cost. We seem to be dealing with one dimension only. This is completely unsatisfactory.

Will the delegates expand a little on the thinking on differentiating between the passenger-related and driver-related aspects of the scheme? Is any measure being considered to expand the latter? There are schemes on offer that support people in the home or in moving to a care location but they do not afford a person the independence that should be provided by a proper mobility scheme.

Ms Campbell

The Deputy asked several questions but I am not sure if I kept track of them all. Perhaps she will bear with me as I try to answer them. Perhaps the easiest one to answer concerns the differences between the driver and passenger components of the scheme.

Deputy C. Murphy

I want to know the thinking in the Department in recommending a change to these components. I refer to the figures for the number who apply as drivers and those who apply to carry a passenger. The recommendations suggest that this matter could be examined.

Ms Campbell

The review group recommended separating the two components of the scheme and converting the passenger component to a direct payment system. It is outlined in the report that the Department of Finance did not endorse this recommendation. It stated there were operational and control issues associated with the recommendation and that, given the escalation on the passenger side of the scheme, there were unquantifiable associated costs. That is the position of the Department on the recommendation.

On the question on the board of appeal, I am aware that the appeals backlog is a serious issue. I do not know for how long it was building up but I am aware it was doing so over a period of years. Solving the issue has been very complex. There are a number of reasons for the backlog. I have mentioned the lack of medical practitioners to enable the scheduling of frequent meetings of the board. It has also been difficult to find practitioners to serve as members of the board. This issue has taken up considerable time and effort. A decision was made to appoint a full-time medical consultant. This is an indication of how seriously the matter was taken. There were also changes to the regulations.

One of the reasons for the backlog, as outlined in some detail in the report, was the very high volume of repeat appeals. I cannot remember the exact figure but it was clear to the review group that many people were appealing even when there was no change in their eligibility under the criteria. A legislative mechanism was found to discourage repeat appeals. The legislative changes, along with the practical appointment of practitioners and a medical consultant and the making available of funds, took time.

This is an area where significant effort has been made and this will begin to bear fruit in the near future. The new appeal board has already met five times, a significant improvement on the previous frequency of meetings. I fully acknowledge that there were problems with the board of appeal. While the resolution of these was complex, much effort was put into it. As I stated to Deputy Burton, I am aware from the number of parliamentary questions and representations received from the review group that many people seeking access to the scheme's benefits do not qualify under the current medical criteria. The current medical criteria is one particular approach. There will always be people who do and do not qualify. Extending and changing the criteria or moving to a system of mobility assessment will involve extra cost. Depending on how this was done, the costs could be significant from €45 million to ten times that figure. The changing of the criteria is a matter for decision by the Minister.

In considering the report, the Government's decision was made in two parts. First, it decided to implement the recommendations relating to the appeal board with immediate effect. I have outlined what has been done in this area. With regard to the other recommendations in the report, some of which included the criteria, the driver-passenger issues, age limits and vehicle retention time, the Government decided that these should be considered by the Minister for Finance on an annual basis in the context of the budget. While no changes were made to the scheme in this year's budget, it contained a significant disability package which was identified as a priority area by the Minister for Finance.

Deputy McHugh

There is a discriminatory nature to the scheme. While it purports to deal with people with disabilities, in effect it only deals with those with physical disabilities and not those with intellectual disabilities. The scheme is in place to deal with extra costs associated with transport costs incurred by people with physical disabilities. However, for a person with an intellectual disability, extra costs are also involved in transportation. For that reason, the scheme discriminates against people with intellectual disabilities. The passenger element of the scheme must be organised in such a way as to cater for people with intellectual disabilities.

I am not referring to the adaptation of a vehicle to suit a person. Obviously, that would fall under the existing criteria. However, those who transport persons with intellectual disabilities should be accommodated under exemptions for motor tax or refunds in excise duty. These people must be transported to wherever they must go. Even if a person with an intellectual disability is within walking distance of a place, he or she may not be allowed to walk there alone.

The scheme only refers to individuals whose mobility is restricted. If an individual has a physical disability that cannot be seen by everyone, that does not mean his or her mobility is not restricted. The mobility of persons with intellectual disabilities is restricted. This cannot be just about costs but also about fairness. It is inequitable because it discriminates between categories of people with disabilities. No State scheme should be discriminatory in that manner.

Ms Campbell

The Deputy is referring to the restrictive nature of the medical criteria, particularly disabilities that are not covered by them. Deputy McHugh will appreciate that I am not a medical person. I am aware that there are groups of persons not covered by the criteria. We received submissions for the report from organisations representing persons with intellectual disabilities that are seeking access to the scheme. What I have said to other members about the extending of the criteria would apply. Extension of the criteria is a matter for the Minister because there are cost implications involved. I accept that this matter is not just about costs. There is an important issue in terms of the most effective use of resources in the area of facilitating access and mobility for persons with a disability.

Deputy McHugh

It should be equitable. I accept that Ms Campbell cannot comment on this aspect.

Chairman

The Deputy is making a political point.

Deputy McHugh

No, it is not a political point. It is a human issue, irrespective of a person's politics.

Chairman

I meant to say a policy point.

Senator J. Phelan

While in recent months I have had some dealings with the scheme, I am not too familiar with the passenger end of it. Who qualifies for this part of the scheme? Does it have to be an immediate family member, such as a parent or child, or can it be an immobile elderly neighbour or relative?

I have difficulties with the tightness of the regulations in terms of who qualifies. A farmer in the locality lost an upper limb in a horrific accident but he still does not qualify for the scheme. As well as devastating on a personal basis, it is the end of his enterprise as a dairy farmer. If he had lost a leg, however, he would qualify for the scheme. Nevertheless, it would not have been as serious in terms of his enterprise as a farmer. He would certainly have had mobility problems but he would have been able to continue with his farming. He cannot do so now because he has lost his hand, and he does not qualify for this scheme. I am not saying that officials do not sympathise in such a case, but the scheme, while generous, excludes a great many people with legitimate claims from being included.

A number of other changes discussed earlier could usefully be introduced. Extending the minimum number of years for which the vehicle must be held from two to three or four should have the potential to free up an amount of money. I would have no problem with that change. Ms Campbell noted a number of other countries with longer times for holding the vehicle. If such a change is needed to include in the scheme more people who are on the margins and who deserve to be included, the change should be made.

The cases we come across are the hardship cases, the people who are refused though they almost qualify. I agree with Deputy Paul McGrath and others who have spoken. Two weeks ago, I received a letter about a case in Kilkenny with which I am dealing and which has gone to the appeals board. I thought the matter would be sorted quickly, although I was given no such indication. No doubt I should have been wiser. The possibility of a two-year wait is ridiculous. I know that a new appeals board has been established, but anything approaching a two-year delay is shocking. Efforts should be made to reduce the waiting time.

Ms Campbell

I note Senator Phelan's comments on the criteria and on extending the period for retention of the vehicle. He asked for further explanation of the passenger side of the scheme and I will ask my colleagues from the Revenue Commissioners to expand on that. Basically, the same criteria apply for a qualifying passenger as for a qualifying driver. The Senator asked what the relationship of the passenger must be with the driver.

Mr. Coyle

As regards a family member, the direct relationship between the driver and the disabled person is not defined in law, and the Revenue Commissioners would take quite a broad approach to that. There is also a requirement that the disabled passenger must have residency with the relation. Following the report by the Ombudsman at the end of 2001, the Revenue Commissioners have also taken a broad approach to that matter so that, currently, a disabled passenger can qualify even if not living full-time or under the same roof with the relation. The passenger might even be in a nursing home provided the nursing home manager or matron certifies that the family member takes the disabled person out regularly for medical or social reasons.

Senator Mansergh

I welcome the delegation. I have memories of five years' discussion of this scheme in the tax strategy group. It is one of those very complex issues. I have some sympathies with the view expressed by Deputy Burton that it is to all intents and purposes a social welfare scheme so that some consideration should perhaps be given to transferring it to the Department of Social and Family Affairs.

Regarding the history of the scheme, I could not help but note that this was yet another caring social measure introduced by one Charles J. Haughey when he was Minister for Finance in 1968. I know his record fairly well but I had not previously spotted this measure.

Ms Campbell made the point that the scheme is generous, which it is to the recipients. Listening to the presentation, it occurred to me whether in one respect it should have been made less generous because I cannot see the objective justification, particularly when there are modifications of cars, for allowing people to renew their vehicles every two years. That seems quite unnecessary. One of the options the Minister might have would be to increase — obviously for new beneficiaries — the length of time a vehicle is held. I see nothing wrong with a five-year period. I speak as someone who has had my present car for 12 years. Modern vehicles of the mainstream variety are pretty solid and reliable, so the area referred to is perhaps one of unnecessary generosity.

On the other hand, scope should be left for extending the eligibility of beneficiaries. Our eligibility rules are quite restrictive. I understand the headache of devising administrative rules which cannot be abused. All of us who hold clinics or call at doorsteps come across people who are on disability benefit, for example, but who to all appearances have their limbs intact and look like normal people. At the other extreme there are people suffering the most severe disabilities.

I was visited last week by my mother-in-law who lives in the west of Scotland. She is in her early 80s and has become a good deal less mobile. It is interesting what benefits she receives from being classified as mobility-impaired. The benefits include free parking and tax-free benefits relating to vehicles.

Like so much else in national life, our scheme originated at a time when we were a poor country with relatively few resources. We had to live frugally and our schemes were tailored accordingly. I know that to devise a more generous scheme from the point of view of eligibility would require major administrative ingenuity to close off abuse because if one were not careful, the scheme would be wide open to abuse. Nobody would dispute that. However, if a more generous scheme could be devised, I would not begrudge spending at least double the amount of money currently being spent.

I urge those who deal and grapple with the issue and who are likely to continue doing so — the Minister for Finance will always receive representations on the matter — to consider three points. First, would it be better if the scheme were formally a social welfare scheme? Second, is the two-year period unnecessarily generous? Third, if one were less generous in that area, would that allow more scope to extend the eligibility to more obvious deserving cases? However, I do not exclude the fact that the scheme, which costs €40 million or so, is not, as social welfare schemes go, large in the context of today's budgets and revenues. We could afford to be more generous. I know that in the final analysis it is a political decision. I am equally aware, however, that officials of various Departments and agencies engage in much study and preparation and, in many cases, they make political decisions possible.

Chairman

I wish to put three points arising from what has been said. Organisations that can avail of this scheme were mentioned. Approximately how many are included? I presume that the Irish Wheelchair Association and other such bodies are among them. In view of the number of appeals, the primary medical certificate must be issued by the senior area medical officer. Is there any consistency in the pattern of granting those certificates throughout the country? Are 90% approved in all regions or is there quite a disparity, with some regions given 100% approval and other regions 60%? Is there any information in that regard?

A comment was made regarding the 2001 Ombudsman's report. What were the headlines in that? They were mentioned in passing. There is the issue of a two-year delay. Our next meeting will deal with the Ombudsman and I do not believe she would accept that. If she were aware of the current two-year delay, she might wish to update the previous report. I do not know what the latter was about. Perhaps the most appropriate witness might provide some information on those points.

Ms Campbell

I will be relying on my colleagues to assist me but the Revenue has advised that over 1,000 organisations are registered. That does not necessarily mean they are getting the benefits of the scheme but those are the ones registered for exemptions from VRT under the scheme. My colleagues will explain that in more detail.

Regarding the consistency of primary medical certificates, the first point is that under the law the medical certificates are dealt with. The process of certification is a matter for the health services. It is not something in which we are involved. It seems to me, as an amateur, that the medical criteria are fairly well defined in the legislation. The review group report mentions whether there is consistency across the country in the certificates. The view there is that training of those doing this is important. The Ombudsman's report relates to the residency requirement for passengers. I am sure Mr. Coyle can explain that.

Mr. Coyle

Up until the Ombudsman's report at the end of 2001, the Revenue Commissioners took a fairly hardline approach to the residency rule. In most cases, they only allowed concessions for a disabled passenger if the applicant was living with the disabled driver. There were exceptional cases in which the Revenue ruled otherwise. Several cases came before the Ombudsman, who examined them. She found that it was sometimes difficult to determine much difference between a case allowed by the Revenue and one not allowed. She suggested that the Revenue Commissioners should relax their interpretation regarding residency, which it subsequently did, allowing residency to apply to people who might have been living in a nursing home or quite close to the individual with another family member, particularly in rural areas, where they might live in another house on the same farm. Thereafter, the number of passengers increased. The Revenue Commissioners relaxed their interpretation as a result of that report.

Chairman

Was that a special investigation by the Ombudsman or simply a comment in the annual report?

Mr. Coyle

Four cases involving residency only were taken to the Ombudsman.

Chairman

Mr. Coyle mentioned the organisations. Perhaps he might provide a breakdown. Does every local branch of the Irish Wheelchair Association add up to 1,000?

Mr. Coyle

It would be looser than that. One could have organisations such as the Friends of Castlebar Hospital and there may be several people who build a loose organisation to cater for a single individual who is a hardship case. At the higher end of the scale would be the Irish Wheelchair Association.

Chairman

Will Mr. Coyle explain the last point? I am trying to speculate here. When he mentions individuals, does that mean that someone's family could not afford to help and that a group of people conducted a charity collection to buy a specially adapted vehicle?

Mr. Coyle

Almost exactly. The scheme does not allow an organisation to purchase a car on behalf of an individual but it could make a contribution to the individual who could then purchase the vehicle.

Chairman

I wanted to tease out that point. Everyone seems to have had their questions answered at this stage. On behalf of the committee, I thank Ms Campbell, Mr. John Burke, Mr. David O'Sullivan, Mr. Paddy Barrett and Mr. Ciarán Coyle for their attendance and for the information they supplied. People have an interest in this topic.

Under any other business, is it agreed that we change the schedules of our meetings for 20 and 27 July? I want to swap them around. On 20 July, I would like to deal with the strategy statement for the Department of the Taoiseach and I would like to put finance back to 27 July, since we want to take the National Economic and Social Development Office Bill 2002 on Committee Stage, which will be brought forward.

Senator Mansergh

That will be a select committee?

Chairman

Yes, it will be a select committee issue but I want people to be aware of that fact.

The joint committee adjourned at 1.58 p.m. until 11 a.m. on Wednesday, 13 July 2005.