Thursday, 24 October 2013

Questions (53)

Terence Flanagan

Question:

53. Deputy Terence Flanagan asked the Minister for Finance the position regarding a VHI premium in respect of a person (details supplied) in Dublin 5; and if he will make a statement on the matter. [45370/13]

View answer

Written answers (Question to Finance)

The position is that from 16 October 2013, tax relief for medical insurance premiums will be restricted to the first €1,000 per adult and the first €500 per child insured. Any portion of premium paid in excess of these ceilings will no longer qualify for tax relief. The new ceilings will ensure continuing support via the tax system for those who purchase standard policies, while reducing Exchequer exposure to more expensive policies. Pricing of insurance premiums is a matter for insurers.

For the purposes of calculations it has been assumed that the €2,400 quoted in the details supplied is the actual current net premium cost, which is split equally between the individual in question and his wife. On that basis, the family will pay an additional €200 towards their medical insurance cover as result of Budget 2014, which is set in calculation below.

Previous Renewal or Policy Commencement

Medical Insurance

Cost of medical insurance cover:

€3,000

Less tax relief at source (€3,000@20%) =

(€600)

Cost of medical insurance cover after tax relief at source:

€2,400

Next Renewal

Medical Insurance

Cost of medical insurance cover:

€3,000

Less tax relief at source (€2,000@20%) =

(€400)

Cost of medical insurance cover after tax relief at source:

€2,600