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Seanad Éireann debate -
Wednesday, 23 Jun 1999

Vol. 159 No. 19

Adjournment Matters. - Tax Reliefs.

I want to talk about one of the greatest iniquities of our tax system. We talk con stantly about what we are doing for disabled people and encourage them to become more involved in education and the workplace. The Disabled Drivers and Disabled Passengers (Tax Concessions) Regulations will have to be changed and a fairly graded mobility allowance introduced.

Some years ago the Department of Finance instituted a scheme giving tax relief to disabled drivers and passengers. Approximately 5,400 people claim this at present. The scheme has been updated, most frequently in 1994. The provisions are generous. Those considered eligible are entitled to claim exemption from motor tax and a refund or exemption from vehicle registration tax. They can also claim a refund on VAT up to £7,500 where the driver is disabled and up to £12,500 where the disabled person is a passenger. These are very generous allowances.

The cars involved can be up to two litres where the disabled person is the driver, and up to four litres where the person is a passenger. Cars can be sold after two years without any VAT being repaid. A refund of duty paid on petrol or diesel up to a maximum of 600 gallons per year is given. From 1997 there has been a parking permit for people with disabilities and for registered blind people. This permit applies to the person rather than the car, so that a person with a permit can display it whether they are a passenger or a driver. It allows them to park freely in public car parking areas. These are very generous entitlements but they are awarded on an all or nothing basis and the person must be permanently disabled.

The medical criteria under which people can apply for eligibility under this scheme were laid down 30 years ago. They mainly apply to those in wheelchairs. The criteria are as follows: people who can apply are those who are wholly or almost wholly without the use of both legs, in other words, in wheelchairs; persons wholly without the use of one of their legs and almost without the use of the other leg, such that they are severely restricted as to movement of their lower limbs, again wheelchair bound; persons without one or both arms; persons without one or both legs – these are, in general, amputees having lost a leg in an accident or through an operation for diseases such as cancer, arterial disease, diabetes and so on; persons wholly or almost wholly without the use of both hands or arms and wholly or almost wholly without the use of a leg. This must be a very rare group, as is the last group – persons having the medical condition of dwarfism and who have serious difficulties of movement of the lower limbs. They too are probably in wheelchairs.

Perhaps because I am a doctor I have been repeatedly asked by people disappointed by being refused these entitlements to make representations to the appeals board on their behalf. The cases always seem to me to justify help but the appeals board informed me that it cannot stray outside the strict medical criteria. I asked if I could be present at a sitting of the board and the members of the board agreed. With the permission of those coming before the board, I sat in on several cases last week. It was one of the most depressing encounters I have had for some time and it made me determined to try to get the criteria changed and to get a graded mobility scheme introduced.

Men, women and children come before the appeals board with disabilities which obviously make it extremely difficult for them to get about. Blind passengers cannot get the disabled passengers relief. It is obvious that they cannot drive, so they have a severe restriction. Those with strokes are most unlikely to be totally paralysed down one side, but it is very unusual for a stroke victim to be disabled in that way and thus qualify.

I saw a farmer in his early sixties whose son had to give up third level education to look after the family farm. The family felt if the farmer could be driven around the small farm by his wife the son could go back to college. Another young man suffered from a sensory disability which was gradually making one side of his body more and more paralysed, yet he was desperate to stay in employment. Many of the applicants said that all they wanted to do was to try to keep their jobs and get on with their lives. This man's hand and leg were working so he did not succeed with his appeal. His job involved shift work and I did not see how he could possibly have kept it by using public transport. His was one of the most deserving cases I saw but he was not wholly disabled on one side of his body.

Many young people in this position have neurological or muscular conditions which may leave them some residual movement. This means they do not qualify. I saw people who could not walk the length of the Seanad Chamber but they did not qualify because they were deemed perfectly mobile. The doctors making these assessments did not feel this was just. As I say, I heard the words "I am desperate to keep my job" many times.

A girl crippled with rheumatoid arthritis yet desperate to stay in college was being driven 25 miles a day by her mother. If she had a parking permit of her own she could have managed, yet she could not even be given a car sticker. Those with rheumatoid arthritis will never qualify under these criteria, yet those of us who know people with this ailment know that one is severely disabled by it.

Another crazy aspect of this scheme is that amputees are covered by it. I have nothing against amputees, but many of them are very fit people, especially those who have lost limbs in traffic accidents. Many of them run in marathons and do hill walking, yet they can get the mobility allowance. We are now trying to save the legs of those who develop cancer in the long bone of the leg. Instead of amputating, an internal prosthesis is inserted in the bone. The person is immobilised for some time but not permanently. They cannot get the allowance. Has anyone ever heard of anything so bizarre and unjust? Are we seriously saying it would be better if doctors took off limbs so that people would at least get mobility allowances rather than trying the best methods of modern medicine to save a person's limbs?

The plight of parents with severely disabled but not wheelchair bound children is horrific. Parents who have been refused have written to me about such cases as the 22 year old with severe mental handicap and a form of epilepsy which causes her to suffer "drop" attacks frequently during the day. It is impossible to take her on public transport and her parents are not well off. She has to wear a protective helmet to prevent head injuries during these attacks and is confined to a wheelchair much of the time. However, because she is not "wholly without the use of both legs" she is not eligible for the scheme. She is not wholly confined to the wheelchair and has use of her limbs. Her parents cannot afford a car without the help of the mobility allowance and it is impossible to take her on public transport.

I could go on and on with such cases. Our present scheme is manifestly unjust and a new scheme of assessment must be set in place at once, not just a review. We hear about reviews for everything but they take years and this must be changed at once. A graded mobility allowance, permanent or temporary, according to the amount of disability and the circumstance of the person, must be introduced at once. Those are the criteria on which a graded mobility allowance should be given. It may not cost any more than the present scheme, as some people only want stickers to enable them to park in places that would enable them to continue their lives in a normal manner.

I welcome the opportunity to explain to Members the background to the Disabled Drivers and Disabled Passengers (Tax Concessions) Regulations, 1994. In my response I will try to explain why further extension of this costly scheme to additional categories poses difficulties.

The level of interest in participating in the tax free benefits of the scheme can be gauged by the interest of Senators tonight and the vast amount of letters of representations which the Minister for Finance receives seeking the extension of the scheme to new categories of claimants with varying forms and degrees of disability. There have also been 30 or so parliamentary questions put down in the Dáil so far this year relating to demands to extend the scheme, an Adjournment Debate in the Dáil and a discussion on the scheme on Committee Stage of this year's Finance Act. I recognise the genuine concern of Members of both Houses in raising this issue.

The Government appreciates the sensitivity of this issue and our aim would be to help those groups most in need within the limits of a reasonably resourced scheme. To this end, a number of reviews have been carried out of the scheme and there is a review currently in progress which is seeking input from the various groups affected. As with all such schemes, choices have to be made on those who will qualify and this invariably creates disappointment for those who do not succeed in benefiting.

It might be helpful to the House to outline the background to the scheme and the considerations involved in trying to balance the acknowledged competing demands for resources. The current scheme had its origins in section 43 of the Finance Act, 1968, which introduced an exemption from the payment of road tax on vehicles specially adapted or constructed for and used by disabled persons who, in the main, would have been confined to wheelchairs.

The initial scheme was extended on a number of occasions and a new consolidated scheme of reliefs was provided for under section 92 of the Finance Act, 1989. That section enabled the Minister for Finance to make regulations providing for the refund on road tax, excise duty – later vehicle registration tax – as well as VAT on the purchase of a vehicle used by certain disabled persons and for the repayment of the excise duty on petrol or diesel used in the vehicle. The resultant Disabled Drivers (Tax Concessions) Regulations, 1989, came into effect on 21 December 1989. In practice, the scheme allows participants tax free cars and tax free petrol subject to certain limits. For beneficiaries, very substantial tax benefits arise which help to generate demand to widen the scope. I am happy to hear Senator Henry acknowledge that the scheme is quite generous to those who qualify.

A comprehensive review of the workings of the provisions of the scheme was carried out in 1993-94, involving wide-ranging consultations with the Departments of Health and Children, the Environment and Local Government and Justice, Equality and Law Reform, the disabled drivers medical board of appeal, the Revenue Commissioners, relevant organisations catering for the disabled and Opposition spokespersons. In the course of the review, detailed consideration was given to the qualifying medical criteria for entry to the scheme, bearing in mind the various representations which had been received seeking the extension of the benefits of the scheme to many additional categories of disabled individuals. It was decided that the scheme should continue to focus on persons with the most severe mobility restrictions. Six different types of disablement are listed under the regulations drawn up following that review, and a qualifying person must satisfy one or more of them. It is the nature and extent of the disability which determines a person's eligibility under the scheme rather than the circumstances which have given rise to that disability. The current regulations, the Disabled Drivers and Disabled Passengers (Tax Concessions) Regulations, came into effect on 1 December 1994.

Naturally, the Minister for Finance has no role in determining whether a person satisfies the medical criteria laid down in the regulations. That is a matter for the senior area medical officer in the local health board. Where the issue of such a certificate is refused, the person concerned may appeal that decision to the disabled drivers medical board of appeal, an independent board whose decision is final.

A current review of the scheme is being undertaken by an interdepartmental group under the chairmanship of the Department of Justice, Equality and Law Reform with a view to determining what modifications, if any, might be proposed to the scheme. The existing medical criteria for qualification may be among the items examined by the group. In addition, the Revenue Commissioners have carried out a wide-ranging technical review of the operation of the scheme and their report is also awaited. However, this review is much narrower in scope, in that it addresses problems in the present scheme and makes recommendations on how to make it operate in a more effective and cost-efficient manner for its present target group.

While I am most sympathetic to people with disabilities, a particular difficulty with this scheme relates to its increasing cost in giving very generous tax benefits. The need has been to focus its substantial benefits on those most affected by lack of mobility due to physical disability. The total cost to the Exchequer for 1998 was £14.4 million and it is estimated that the cost will rise to at least £16.5 million in this year. This does not include the costs of the exemption from the payment of road tax.

A variety of requests have been made for the medical criteria to be relaxed – and very eloquently by Senator Henry this evening – so as to extend the range of qualifying disabilities to include other categories and those suffering from other ailments. In addition, there are requests to allow persons not fully meeting the current criteria relating to the loss of limbs to be admitted. The number of potential beneficiaries is unclear but according to groups representing the disabled, there are as many as 350,000 persons in Ireland who could be regarded as disabled to some degree. Clearly, a scheme which attempted to meet all these needs would involve a radical overhaul of the basis of the relief.

There is no easy solution to this issue. The scheme provides significant benefits to those who currently qualify. Extending the scheme will escalate the cost. This could require a rethink on the scale of existing benefits which would create concern among existing holders of the current reliefs. The issue would also arise as to whether those costly reliefs might be better delivered in a more equitable manner on a means related basis. The proper course is to complete the review I mentioned and to consider the options which arise. We will, needless to say, be sensitive in examining these options and I hope the House will acknowledge that.

I thank the Minister for his reply but I must emphasise the lack of justice in the scheme. I will pursue the matter with the Department of Justice, Equality and Law Reform. While it would be difficult to take the very generous allowances from those who have them, perhaps new people coming onto the scheme could do so at a different level.

The Seanad adjourned at 8.25 p.m. until 10.30 a.m. on Thursday, 24 June 1999.

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