Tax Reliefs Application

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]

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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

Insurance Costs

Questions (54)

Terence Flanagan

Question:

54. Deputy Terence Flanagan asked the Minister for Finance his plans to review the cost of insurance for young females (details supplied); and if he will make a statement on the matter. [45375/13]

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Written answers (Question to Finance)

At the outset, I would point out that the calculation of annual premium rates is a commercial decision for the insurance company in question. Neither I, as Minister for Finance, nor the Central Bank of Ireland, can require a company to change its rates or prohibit a company from doing so. The primary purpose of the 2012 amendment to the Equal Status Acts is to provide in Irish law for the mandatory introduction within the EU of unisex premiums and benefits in insurance. As a result of the ruling, insurers have to change how they price risk.

While the exact movement in premiums is difficult to predict, the European Commission has indicated that it intends to monitor the evolution of the insurance market and of overall price levels post the removal of the insurance derogation in December 2012.

Tax Reliefs Application

Questions (55)

Terence Flanagan

Question:

55. Deputy Terence Flanagan asked the Minister for Finance his plans to review the new health insurance tax relief restrictions announced in budget 2014 (details supplied); and if he will make a statement on the matter. [45377/13]

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Written answers (Question to Finance)

The position is as I stated in Budget day speech, 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 some continuing support via the tax system for those who purchase medical insurance policies, while reducing Exchequer exposure to more expensive policies. I have no plans to review this decision.

Furthermore, I am informed by the Revenue Commissioners that, as the annual returns received from health insurers are not required to provide an individualised breakdown of the premium payments applying to individuals covered by health insurance policies, there is no basis on which an estimate of the impact of the Budget measure on older people could be separately identified.

Health Insurance Prices

Questions (56)

Michael Healy-Rae

Question:

56. Deputy Michael Healy-Rae asked the Minister for Finance if persons paying more than €800 for a private health plan will see a price rise following on from the recent changes announced in budget 2014; and if he will make a statement on the matter. [45418/13]

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Written answers (Question to Finance)

The position is that from 16 October 2013, tax relief for gross medical insurance premiums will be restricted to the first €1,000 per adult and the first €500 per child insured. Some insurers currently quote prices that are net of tax relief at source, i.e. the tax relief available is deducted from the gross premium to leave a net payable amount. Ultimately, pricing of insurance premiums is a matter for insurers. Any portion of premium paid in excess of the new ceilings will no longer qualify for tax relief.

The new ceilings will ensure some continuing support via the tax system for those who purchase medical insurance policies, while reducing Exchequer exposure to more expensive policies.

Health Insurance Prices

Questions (57)

Michael Healy-Rae

Question:

57. Deputy Michael Healy-Rae asked the Minister for Finance with regard to figures regarding persons in possession of private health plans, if 90% of policy holders will be affected by recent changes in budget 2014; and if he will make a statement on the matter. [45419/13]

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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 some continuing support via the tax system for those who purchase medical insurance policies, while reducing Exchequer exposure to more expensive policies. I am advised by the Revenue Commissioners that based on 2012 data, the most up to date data available, it is estimated that up to 577,000 policy holders, which equates to just under 53% of all policies, may be affected by this measure.

However, I should point out that many will only be affected marginally, depending on the cost of the policies that individuals purchase. In addition, individuals can of course opt for less expensive policies and therefore avoid the impact of this measure entirely.

Tax Credits

Questions (58)

Robert Troy

Question:

58. Deputy Robert Troy asked the Minister for Finance if he will consider making adjustments to the single parent tax credit to allow an element of tax planning whereby the spouses could elect which spouse claims the credit or the credit could be split in the most tax efficient way by the Revenue Commissioners (details supplied). [45469/13]

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Written answers (Question to Finance)

Neither the Revenue Commissioners nor my Department would ever provide advice to facilitate tax planning. I assume the Deputy is referring to the changes announced in Budget 2014 to the One-Parent Family Tax Credit. The position is that the One-Parent Family Tax Credit is being replaced with a new Single Person Child Carer Tax Credit from 1 January 2014. The Single Person Child Carer Tax Credit will be of the same value, i.e. €1,650, as the existing One-Parent Family Tax Credit and will also carry the same entitlement to the extended standard rate tax band of €36,800 per annum.

The new credit will be targeted such that it is available only to the primary carer of the child. A maximum of one credit will be available per single carer/claimant, regardless of whether he or she cares for more than one child. This is the same condition that applies to the current One-Parent Family Tax Credit.

Allocation of childcare responsibilities is primarily for parents to agree. Practical implementation issues are being considered as part of the Finance Bill process.

Tax Credits

Questions (59)

Robert Troy

Question:

59. Deputy Robert Troy asked the Minister for Finance if he will clarify the position regarding which parent would be allowed the single parent tax credit in the case of one child living with his or her mother and a second child living with its father, which is a common situation. [45470/13]

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Written answers (Question to Finance)

The position is that the One-Parent Family Tax Credit is being replaced with a new Single Person Child Carer Tax Credit from 1 January 2014. The Single Person Child Carer Tax Credit will be of the same value, i.e. €1,650, as the existing One-Parent Family Tax Credit and will also carry the same entitlement to the extended standard rate tax band of €36,800 per annum. The new credit will be targeted such that it is available only to the primary carer of the child.

A maximum of one credit will be available per single carer/claimant, regardless of whether he or she cares for more than one child. This is the same condition that applies to the current One-Parent Family Tax Credit.

Allocation of childcare responsibilities is primarily for parents to agree. Practical implementation issues are being considered as part of the Finance Bill process.

Credit Unions

Questions (60)

Pearse Doherty

Question:

60. Deputy Pearse Doherty asked the Minister for Finance if he will provide an update of the situation in Maynooth Credit Union following the court ruling of 18 October 2013; and if the ruling affects the situation at Newbridge Credit Union. [45350/13]

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Written answers (Question to Finance)

As Minister for Finance I have no role in the Court process relating to Maynooth Credit Union and I do not propose to comment as the matter is still currently before the Courts.

Tax Credits

Questions (61)

Ciaran Lynch

Question:

61. Deputy Ciarán Lynch asked the Minister for Finance how the single-person child carer tax credit will be applied where, by court order or de facto, a 50-50 split in caring is in place (details supplied); and if he will make a statement on the matter. [45363/13]

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Written answers (Question to Finance)

As the Deputy is aware, the One-Parent Family Tax Credit is being replaced with a new Single Person Child Carer Tax Credit from 1 January 2014. The Single Person Child Carer Tax Credit will be of the same value, i.e. €1,650, as the existing One-Parent Family Tax Credit and will also carry the same entitlement to the extended standard rate tax band of €36,800 per annum. The new credit will be targeted such that it is available only to the primary carer of the child. A maximum of one credit will be available per single carer/claimant, regardless of whether he or she cares for more than one child. This is the same condition that applies to the current One-Parent Family Tax Credit.

Given the difficult fiscal environment it is essential to review all tax reliefs, credits and incentives in order to ensure that they are properly targeted and if necessary re-focused in order that they can achieve the socio-economic objectives that are set for them. A system that allows multiple claims in respect of the same child is unsustainable.

The Commission on Taxation acknowledged that the One-Parent Family Tax Credit plays a role in supporting and incentivising the labour market participation of single and widowed parents. However, in its recommendations it concluded that the credit should be retained but that it should be allocated to the principal carer only. The restructuring of the credit will achieve such an outcome.

Allocation of childcare responsibilities is primarily for parents to agree. Practical implementation issues, such as that which you have raised, are being considered as part of the Finance Bill process.

Alcohol Sales

Questions (62)

Brendan Griffin

Question:

62. Deputy Brendan Griffin asked the Minister for Finance the value of sales in recent years from off-licence alcohol sales; and if he will make a statement on the matter. [45379/13]

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Written answers (Question to Finance)

I am advised by the Revenue Commissioners that the way in which Alcohol Products Tax and VAT are collected does not differentiate between off-licence and other sales.