Skip to main content
Normal View

Tax Reliefs Availability

Dáil Éireann Debate, Tuesday - 5 November 2013

Tuesday, 5 November 2013

Questions (166)

Lucinda Creighton

Question:

166. Deputy Lucinda Creighton asked the Minister for Finance if he will detail the consultation he had with the Department of Health concerning the removal of the tax relief restriction on private health insurance for the 577,000 policy holders which the Revenue estimate will be affected by this removal; if he will explain the reason the Revenue Commissioners estimates that the relief change will impact 577,000 policy holders but the industry estimates it will affect 90% of the 1.09 million policy holders availing of the relief; if he will consider reversing this decision and not include the measure in the new finance Bill 2013 thus allowing the resolution to expire; and if he will make a statement on the matter. [45941/13]

View answer

Written answers

Firstly, decisions regarding tax matters are primarily a matter for my Department and the Office of the Revenue Commissioners. However, the Budget was agreed by the Government before its announcement on Budget day. As I stated in my Budget day speech, 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. The Revenue estimate is based on an analysis carried out on the annual returns and the gross premium prices (i.e. before tax relief at source is applied) submitted by the Health Insurers in respect of the 2012 tax year. The basis for the industry estimate is not known.

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.

The legislation underpinning the new ceilings has been included in Section 8 of Finance (No.2) Bill 2013.

Top
Share