I move:
That Seanad Éireann approves the following regulations in draft—
Health Contributions (Yearly Reckonable Income) (Variation) Regulations, 1983
a copy of which regulations in draft was laid before the House on 10th March, 1983.
Health Contributions: Motion.
It is provided in subsection (3) of section 9 of the Health Contributions Act, 1979, that the Minister for Health may, by regulations, vary the rate at which health contributions are payable. Subsection (5) of section 9 of that Act provides that a draft of any such proposed regulations shall be laid before each House of the Oireachtas and that the regulations shall not be made until a resolution approving of the draft has been passed by each House. The draft regulations now before the House deal with the income ceiling. It is not proposed to vary the rate figure which has remained at 1 per cent since 6 April 1979.
The income ceiling is at present £9,500 and the proposal is to raise this to £11,000. The Act specifies that a new income ceiling figure will take effect from the beginning of the contribution year following that in which the regulations are made. Accordingly, the new ceiling figure of £11,000 will apply with effect from 6 April 1983. The effect of the increased ceiling is to increase the maximum contribution payable from £95 to £110, an increase of £15 per annum. The increase will fall to be paid only by those persons whose income exceeds £9,500. The increase will be collected from most contributors towards the end of the 1983-84 contribution year, that is, in the first quarter of 1984. While the total estimated annual additional yield is £3 million approximately only about £300,000 extra will be realised in the current financial year ending 31 December 1983. The balance of £2.7 million will come in the first quarter of 1984.
The Health Contributions Act, 1979, provides that when setting a new ceiling figure the Minister shall take into account any changes in the average earnings of workers in the transportable goods industries as recorded by the Central Statistics Office since the date by reference to which the ceiling figure was last determinded. The latest recorded information on average weekly earnings in those industries relates to June 1982. The average weekly earning figure increased from £112.75 per week in June 1981 to £129.33 by June 1982. This represents an increase of 14.71 per cent. When this is applied to the current ceiling of £9,500, a new ceiling of £10,897 or say £11,000 per annum emerges.
I should mention that I also propose to raise the income limit for free hospital consultant services to £11,000. This higher income limit will operate with effect from 1 June 1983 and will relate to income for the year ending 5 April 1983. Here I should explain that the reason for the later effective date of 1 June for eligibility purposes is simply to facilitate people claiming entitlement to those services. It is usual to require that persons claiming entitlement produce evidence of income. The usual evidence accepted is the form P.60 which is issued by employers. This is not usually available until some weeks after the end of the income tax year on 5 April. However, Members of the House will appreciate that such a time leg is to the advantage of the general public since, in the period 6 April 1983 to 31 May 1983, eligibility will be determined by income earned in the year ended 5 April 1982. The eligibility limit will be covered by separate regulations which will be made later. I mention the issue now simply to inform Senators of my intentions in this area.
I should also mention difficulties which arose during the course of last year regarding the collection of health contributions from farmers. Health boards are responsible for the collection of these contributions from approximately 100,000 farmers and they used a notional system, RV and a multiplier, to determine farm income for this purpose. In July 1982 the High Court ruled that the use of farm RV and a multiplier to determine farm income was contrary to the Constitution. To deal with this situation I have recently, with the consent of the Minister for Finance, made regulations which provide that farmers' income will be assessed on a factual basis as in the case of self-employed persons. This means that farmers will be assessed on the basis of the profits or gains from farming activities, less any expenses incurred in earning these profits and less any superannuation contributions which they may have paid. This would seem to meet the case made by farmers for a proper assessment of income for health contribution purposes. I am hopeful, therefore, that as a result of the changed basis of assessment there will be a significant improvement in the collection rate.
However, the purpose of the motion today is simply to raise the ceiling level for health contributions from the current figure of £9,500 to a new figure of £11,000. I now ask the House to approve of the regulations now before it in draft form.
Question put and agreed to.