Thursday, 24 October 2013

Questions (75)

Caoimhghín Ó Caoláin

Question:

75. Deputy Caoimhghín Ó Caoláin asked the Minister for Finance the tax forgone by the Exchequer as a result of taxation expenditures in respect of private health insurance in each year since 2007. [45498/13]

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Written answers (Question to Finance)

I am informed by the Revenue Commissioners that the cost to the Exchequer of tax relief allowed through the tax relief at source (TRS) system for medical insurance premia from 2007 to 2012 and the estimated costs for 2013 are set out in column two of the table below. The figures in column two do not include further costs to the Exchequer of age-related tax relief at source, which was established by the Health Insurance (Miscellaneous Provisions) Act 2009. Those costs are shown separately in column three of the table. The cost of the age-related tax credit is offset by a stamp duty on health insurance policies. The age-related tax credit and stamp duty were part of an interim scheme of risk equalisation, which was introduced in order to provide direct support to community rating in the private health insurance market and is intended to be revenue neutral over its duration. This interim scheme expired on 31 December 2012 and was replaced from 1 January 2013 by a permanent risk equalisation scheme, provided for in the Health Insurance (Amendment) Act 2012.

Tax Year

Cost €m (excluding cost of the Age-Related Tax Credit)

Cost of Age-Related Tax Credit €m

2007

300

Not applicable

2008

321

Not applicable

2009

373

216

2010

390

308

2011

404

333

2012

448

436

2013 (estimates)

500

115

Figures shown in table are rounded to the nearest million.