Written Answers Nos. 191-212
191. Deputy Michael Creed asked the Minister for Finance if he will arrange for the issue of a tax clearance certificate in respect of a person (details supplied) in County Cork; and if he will make a statement on the matter. [46386/13]
View answerI am advised by the Revenue Commissioners that they do not have any record of an application for a Tax Clearance Certificate from the individual concerned. If this person requires a Tax Clearance Certificate there is a facility to apply for this online at www.revenue.ie. Should he require further assistance he can contact Laura Murphy on 021 6027018.
192. Deputy Seán Ó Fearghaíl asked the Minister for Finance the options available to a mortgage holder who finds that his or her lending agency disregards the code of conduct on mortgage arrears; and if he will make a statement on the matter. [46396/13]
View answerThe Central Bank has advised that, where a borrower believes that their lender has not complied with or in any way disregarded the Central Bank’s Code of Conduct on Mortgage Arrears, he/she may make a complaint to their lender. The lender must seek to resolve the borrower’s complaint in line with the complaints handling process set out in provisions 10.7 to 10.12 of the Central Bank’s Consumer Protection Code. Each lender must also have an appeals process in place to enable a borrower to appeal in relation to a decision of the lender, including:
- Where an alternative repayment arrangement is offered by a lender and the borrower is not willing to enter into the alternative repayment arrangement;
- Where a lender declines to offer an alternative repayment arrangement to a borrower; and
- Where a lender classifies a borrower as not co-operating.
For this purpose, each lender must establish an Appeals Board to consider and determine any such appeals submitted by borrowers.
If the borrower remains dissatisfied following the outcome from the complaints or appeals process, he/she may then refer the matter to the Financial Services Ombudsman who deals independently with unresolved complaints from consumers about their individual dealings with all financial service providers.
193. Deputy Terence Flanagan asked the Minister for Finance the net benefit to the Exchequer as a result of the 15,000 jobs that have been created since the reduction in the VAT rate; and if he will make a statement on the matter. [46415/13]
View answerIt is not possible to calculate the net benefit to the Exchequer as a result of the 15,000 jobs that have been created since the reduction in the VAT rate that would take account of all of the variables that apply in every case. However, I can put forward a specific example for the information of the Deputy. The calculations presented are based on a single individual who takes up full time employment, 39 hours a week at the minimum hourly rate of €8.65 per hour, which equates to an annual income of €17,542 per annum. Before taking up the employment, the individual was entitled to the full rate of Jobseekers Benefit/Allowance at €188 per week. No other secondary benefits, which the individual may have been entitled to, have been included for the purpose of these computations. Furthermore, it is assumed that the individual is not in receipt of a medical card and therefore does not benefit from the concessionary Universal Social Charge (USC) rate. In addition, the calculations that have been computed below are on the assumption that the 15,000 jobs mentioned by the Deputy would have not been created without the reduction in the VAT rate.
The following tax credits have been included in the computation:
|
Tax Credits |
€ |
|
PAYE tax credit: |
€1,650 |
|
Personal tax credit: |
€1,650 |
Tax Liability 2013
|
Tax |
€ |
|
Earnings |
€17,542 |
|
USC |
(€547) |
|
Employee PRSI |
Nil |
|
Tax |
€ |
|
Employer PRSI |
(€746) |
|
Income Tax |
(€208) |
|
Total Deductions |
€1,501 |
Additional tax revenues of €22.5 million per annum (€1,501 per annum X 15,000 employments) would be generated over a full tax year in such a case. In addition, savings of €146.6 million (€9,776 per annum X 15,000 claimants) would be achieved in relation to Jobseekers payments. Therefore, the total annual benefit to the Exchequer would be €169 million in this specific example.
However, I would stress again that this is a very specific and simple analysis. What is not reflected in the calculations is the potential costs which would have arisen had it not been for the cut in the VAT rate, such as increased numbers on the live register. In this context, one of the explicit goals of the measure was the retention of existing staff whom would otherwise have lost their job, by improving the margins for operators in these labour intensive sectors. While, it is not possible to readily place a figure on this, I am confident that this is indeed the case.
194. Deputy Terence Flanagan asked the Minister for Finance the cost to the Exchequer of the reduction in VAT to 9% which the levy on private sector pension savings was meant to fund in each year since it was introduced; and if he will make a statement on the matter. [46416/13]
View answerThe 9% reduced VAT rate for tourism related services was introduced in July 2011 as part of the Government Jobs Initiative. The measure was designed to boost tourism and create additional jobs in that sector. The measure was estimated to cost €120 million in 2011, €350 million in 2012, €350 million in 2013, and €60 million in 2014. In the recent Budget I announced that the 9% VAT rate would be retained, at a cost of €290 million in 2014 and €350 million in a full year.
195. Deputy Terence Flanagan asked the Minister for Finance the amount collected since the levy on private sector pension savings was introduced that has been spent on job creation; and if he will make a statement on the matter. [46417/13]
View answerA temporary 0.6% stamp duty levy on pension fund assets was introduced in the Finance (No.2) Act 2011 as a measure to fund the Jobs Initiative. This was estimated to yield €470 million a year for 4 years. The Revenue Commissioners have advised me that receipts amounted to €463 million in 2011 and €483 million in 2012. This is broadly in line with the amounts anticipated to be collected in those years. €534 million was collected in 2013 to date, due to an increase in the capital value of pension funds. The Jobs Initiative announced in 2011 included a range of revenue and expenditure measures to support the protection of existing jobs and the creation of new ones. It provided for the suspension of the Air Travel Tax subject to the airlines increasing passenger numbers by restoring previously cancelled routes and by creating new routes. It also included the reduction of VAT on tourism services to 9% from 13.5% on a temporary basis until the end of 2013. A number of other tax initiatives were also included.
The Deputy will be aware that I announced the reduction of the Air Travel Tax to zero with effect from 1st April 2014 and the continuation of the 9% VAT rate for the tourism and hospitality sector. The decision to remove the tax, together with the retention 9% VAT rate for tourism services, will help maintain the momentum created by the success of The Gathering this year. Since the Budget announcement, airlines have announced the opening up of new routes which will generate a significant increase in passenger numbers with the associated increase in tourism activity and employment.
The Jobs Initiative also included a number of current and capital expenditure measures, including a number aimed at retraining the workforce. While the details of the expenditure on these measures are a matter for my colleague the Minister for Public Expenditure and Reform, Brendan Howlin T.D., I would ask the Deputy to note that, my colleague the Minister for Social Protection, Joan Burton T.D., with responsibility for JobBridge, the National Internship scheme, recently announced that the number of internships, originally planned at 5,000 has now exceeded 20,000. Indecon Economic Consultants undertook an evaluation of the JobBridge scheme in 2012 (published in April 2013) and their report found that 61.4% of the JobBridge survey respondents were in employment within 5 months of finishing their internships.
In terms of measures in the education sector, the Springboard scheme as announced in the Jobs Initiative had initially provided for 5,900 places. During 2011 and 2012, over 10,000 people enrolled on programmes under the Springboard scheme. The scheme has been extended further with my colleague, the Minister for Education and Skills, Ruairí Quinn T.D. announcing in June this year, another 6,000 places under the third Springboard allocation. Further rollouts of the Springboard scheme will be considered in the context of the findings of an on-going evaluation.
In Budget 2014, I have introduced an additional levy on pension funds of 0.15% within the existing legal framework. This is estimated to yield €135 million in a full year. I am doing this among other things to continue to help fund measures initially outlined in the Jobs Initiative, including the continuation of the reduced 9% VAT rate, which is estimated to cost €350 million in a full year. The 0.15% additional levy will remain in place for 2015 while the originally announced 0.6% levy expires at the end of 2014.
196. Deputy Terence Flanagan asked the Minister for Finance the number of pensioners who have had their pension incomes reduced as a result of the levy on private sector pension savings; if an impact analysis was carried out to ensure that these pensioners would not endure undue hardship as a result of their pensions being reduced again; and if he will make a statement on the matter. [46418/13]
View answer197. Deputy Terence Flanagan asked the Minister for Finance the amount collected in each year since the levy on private sector pension savings was introduced; and if he will make a statement on the matter. [46420/13]
View answer198. Deputy Terence Flanagan asked the Minister for Finance the amount he expects to receive in 2014 from the increased 0.75% levy on private sector pension savings; and if he will make a statement on the matter. [46421/13]
View answer199. Deputy Terence Flanagan asked the Minister for Finance the amount of the additional levy of 0.15% on private sector pension savings is going towards making provisions for potential State liabilities which may emerge form pre-existing or future pension fund difficulties due to double insolvency; his estimate of the the extent of these potential liabilities; if those funds will be specifically ring-fenced for that purpose; and if he will make a statement on the matter. [46422/13]
View answerI propose to take Questions Nos. 196 to 199, inclusive, together.
I announced in my recent Budget speech that the 0.6% Pension Fund Levy introduced to fund the Jobs Initiative in 2011 will be abolished from the 31st of December 2014. I will however, introduce an additional levy on pension funds at 0.15%. I am doing this to continue to help fund the Jobs Initiative, including the continuation of the reduced 9% VAT rate detailed below and to make provision for potential State liabilities which may emerge from pre-existing or future pension fund difficulties. The additional levy within the existing legal framework will apply to pension fund assets in 2014 and 2015.
The pension fund levy imposes an annual stamp duty on the market value of assets under management in pension schemes approved by the Revenue Commissioners under Irish tax legislation.
The chargeable persons for the levy are the trustees or other persons (including insurance companies) with responsibility for the management of the assets of the pension schemes or plans. The payment of the levy is treated as a necessary expense of a pension scheme and the trustees or insurer, as appropriate, are entitled, where they decide to do so, to adjust current or prospective benefits payable under a scheme to take account of the levy. It is up to the trustees to decide whether and how the levy should be passed on and who should be impacted and to what extent, given the particular circumstances of the pension schemes for which they are responsible.
Individuals may be affected in different ways by the pension fund levy. I am not in a position to comment on what the precise impact of the levy will be in all cases on individuals or individual funds, schemes, members or retired members as this depends, for example, on whether and to what extent pension fund trustees and Life Offices decide to pass on the levy to individual members, given the particular circumstances of the pension funds or pension plans that they are responsible for.
However, should the option of reducing scheme benefits be taken, in no case may the reduction in an individual member’s or class of member’s benefits exceed the member’s or class of member’s share of the levy.
I am informed by the Revenue Commissioners that receipts to date from the 0.6% stamp duty levy on pension fund assets introduced in the Finance (No. 2) Act 2011 amounted to €463 million in 2011 and €483 million in 2012.
The yield so far in 2013 is €534 million. The deadline date for payment of the levy for 2013 was 25 September 2013. It is not clear at this stage if there will be any further payments received in 2013.
The yield from the pension fund levy in 2014 is estimated at €675 million. The yield from the pension fund levy at the reduced rate of 0.15% in 2015 is estimated at €135 million.
The revenues arising to the Exchequer from the levy are, in common with Exchequer revenues generally, not hypothecated to any particular item of expenditure or liability but have been used to help fund the various measures introduced by the Jobs Initiative. One of the very significant and successful measures introduced by the Jobs Initiative – the reduced VAT rate of 9% on tourism and certain other services – was due to end this year. In my Budget speech, I announced the continuation of the reduced 9% VAT rate. I also announced that the Air Travel Tax is being reduced to zero with effect from 1 April 2014. The combined cost of these initiatives is estimated at close to €400 million in a full year.
The Jobs Initiative also included a number of current and capital expenditure measures. While the details of the expenditure on these measures are a matter for my colleagues in Cabinet, I would ask the Deputy to note that the Jobs Initiative originally provided for 5,000 places under Jobbridge, the National Internship scheme and 5,900 places under the Springboard scheme. Numbers who have participated in Jobbridge have now exceeded 20,000 with an evaluation by Indecon Economic Consultants finding that 61.4% of survey respondents were in employment within 5 months of finishing their internships. The Springboard scheme, now in its third iteration, has expanded to over 16,500 places. The expansion of these schemes, reflective of their success, will require further funding from the Exchequer.
The extent of the potential State liabilities from the pre-existing or future pension fund difficulties is a matter currently under examination by my colleague the Minister for Social Protection. As I have already indicated, however, the proceeds from the levy that accrue to the Exchequer are not set aside in the manner suggested in the question and expenditure decisions on the use of those and other funds will be made as they arise in the normal way.
200. Deputy Michael Healy-Rae asked the Minister for Finance regarding the additional 0.15% pension fund levy effective from 1 January 2014 to 31 December 2015, if he will consider not going ahead with the introduction of this measure; and if he will make a statement on the matter. [46440/13]
View answerThe additional 0.15% stamp duty levy on pension fund assets will apply for 2014 and 2015. I have no plans to change this measure.
201. Deputy Anne Ferris asked the Minister for Finance if he will consider extending the living cities initiative to the historically important pre-1915 houses of the Victorian seaside resort of Bray, County Wicklow; and if he will make a statement on the matter. [46473/13]
View answer224. Deputy Pearse Doherty asked the Minister for Finance the position regarding the application for EU state aid approval of the living city initiative tax measures. [46916/13]
View answerI propose to take Questions Nos. 201 and 224 together.
The Living City Initiative is a pilot scheme, designed to encourage people back to the centre of Irish cities to live in historic buildings and encourage the regeneration of the retail heartland of central business districts.
The initial pilot will be a targeted scheme to enable an assessment to be made as to the effectiveness of the scheme.
The Living City Initiative was announced as part of Finance Bill 2013. I stated at the time that the proposed scheme would be subject to a full ex-ante cost benefit analysis and would require State Aid approval from the European Commission. The cost benefit analysis was recently presented to my Department and has been published on the Department's website. On foot of the recommendations contained in this independent report, I made an announcement in my 2014 Budget Statement that I was proposing to extend the Initiative to include designated areas of four other cities. I do not intend to extend the scope of the Initiative beyond the six cities identified.
Following the receipt of the report, an application for EU State Aid approval will be submitted shortly to the European Commission and the evidence presented in the cost benefit analysis will form part of this application.
The Initiative cannot be commenced until EU State Aid approval is received.
203. Deputy Róisín Shortall asked the Minister for Finance further to Parliamentary Question No. 90 of 24 October 2013, if he will provide a breakdown of the measures that contributed to the respective savings categorised as increase in savings from prior year measures, capital expenditure measures, Revenue carryover, and other. [46580/13]
View answerIn the answer to Parliamentary Question No. 90 of 24 October this year I provided a breakdown of the measures that made up the budgetary adjustment contained in Budget 2014. This included an estimate of around €0.5 billion in revenue carryover. The most significant element of this carryover is an estimated €300 million from the Local Property Tax. It also contains €120 million from the estimated yield from changes to the maximum allowable pension fund at retirement for tax purposes which was first announced in Budget 2013. In addition, it includes around €60 million in income tax carryover as well as an estimate of the order of €50 million resulting from changes to PRSI. There are also some smaller carryover measures, both positive and negative, which, when all told amount to around €530 million. The savings from prior year measures and capital expenditure measures are the responsibility of my colleague the Minister for Public Expenditure and Reform, but details about the expenditure carryover measures are included in the Expenditure Report 2013 published in December 2012.
204. Deputy Kevin Humphreys asked the Minister for Finance his plans to address the rental income tax issue that arises where a family that owns an apartment that is now too small for its needs wants to rent out that property while continuing to pay the mortgage on it which may be in negative equity, while proceeding to rent a residence elsewhere suitable to the family's needs; if he will consider introducing an amendment to the Finance (No. 2) Bill 2013 to allow for the deduction of any income arising from the rent on the property the family owns against the expense of renting another property to address this tax liability, with the provision of strict criteria, as it would be of benefit to many families that want to move but cannot sell or save for a deposit for a negative equity mortgage, and free up apartments in areas of high demand; and if he will make a statement on the matter. [46611/13]
View answerAs I understand it, the Deputy’s question appears to concern the provision of a tax deduction from general income equivalent to the amount of taxable rental income arising from the letting out of unsuitable family accommodation in circumstances where the family is renting a property more suitable to their needs. I am informed by the Revenue Commissioners that rental income for tax purposes is the gross rental income less allowable expenses incurred in earning that rent, as specified in section 97(2) of the Taxes Consolidation Act 1997. The main deductible expenses are:
- any rent payable by the landlord in the case of a sub-lease;
- the cost to the landlord of any goods provided or services rendered to a tenant;
- the cost of maintenance, repairs, insurance and management of the property;
- the interest paid on borrowed money used to purchase, improve or repair the property (which, in the case of residential property, is restricted to 75% of the interest and is subject to compliance with PRTB registration requirements for all tenancies that existed in relation to the property in the relevant year); and
- payment of local authority rates.
In addition, wear and tear capital allowances are available in respect of the capital expenditure incurred on fixtures and fittings provided by a landlord for the purposes of furnishing rented residential accommodation. These allowances are granted at the rate of 12.5% per annum of the actual cost of the fixtures and fittings over a period of 8 years.
The effect of the deduction of allowable expenses from gross rent means that the amount of taxable rental income will often be substantially lower than the gross rent, and could be nil. On that basis, it is not clear that a deduction for taxable rental income, if any, arising on the original property would be of particular benefit to the individual.
I am also advised by the Commissioners that the existing scheme of tax relief for rent payable in respect of residential property, which is provided for in section 473 TCA 1997, does not apply to individuals who began renting property after 7/12/2010 and is being withdrawn on a phased basis over the tax years 2011 to 2018.
[It would be incongruous if, while phasing out this relief, I was to introduce another type of rent relief in respect of residential accommodation, the benefits of which would be highly uncertain.]
205. Deputy Thomas P. Broughan asked the Minister for Finance if he will report on whether savings will be made on servicing the national debt next year; and his views on the statement of the Economic Social and Research Institute that the cost of servicing the national debt next year could be as low as €7.7 billion. [46621/13]
View answerAs I outlined in my Budget Day speech, in order to achieve a General Government deficit of 4.8% of GDP in 2014, a total adjustment package of the order of €3.1 billion is required. This adjustment package comprises €2.5 billion in expenditure cuts and revenue increases, complemented by additional resources/other savings of some €0.6 billion. As part of the additional resources/savings identified, the Budget 2014 debt service estimate for 2014 is some €0.2 billion lower than the corresponding April 2013 Stability Programme Update estimate. This reduction is largely due to lower than previously planned Government bond issuance and an improvement in the interest rate outlook generally for 2014. This brings the estimate for interest on the National Debt in 2014 down to €8.15 billion.
The NTMA’s primary debt management objectives are to ensure adequate liquidity for the Exchequer and to keep debt service costs to a minimum over the medium-term, subject to an acceptable level of risk. I am satisfied that the Budget 2014 estimate for National Debt interest is a robust estimate, based on reasonable assumptions and one which reflects the primary debt management objectives of the NTMA referred to above.
206. Deputy Denis Naughten asked the Minister for Finance the progress he has made in his discussions with the Department of Justice and Equality and the National Treasury Management Agency regarding exemptions from anti-money laundering requirements in relation to the purchase of small value prize bonds; and if he will make a statement on the matter. [46668/13]
View answerOfficials of my Department are continuing to explore with the National Treasury Management Agency (NTMA) whether or not exemptions available under the Third Money Laundering Directive (2005/60/EC) and its Implementing Directive (2006/70/EC) may be applied to small value purchases of prize bonds facilitated on behalf of the State by An Post and the Prize Bond Company.
207. Deputy Andrew Doyle asked the Minister for Finance the reason a local property tax letter from the Revenue Commissioners to a person (details supplied) in County Wicklow says the person's 2014 LPT is €810, as opposed to a lesser amount, in view of fact that the 2013 LPT return for the half year was €202; and if he will make a statement on the matter. [46704/13]
View answerI am advised by Revenue that a key component of the work undertaken in connection with the administration of Local Property Tax (LPT) was the development of a register of residential properties in the State. The development of the Property Register required Revenue to extract and consolidate data in relation to approximately 2 million individual property records from across multiple sources including various Government and non-Government agencies. Some of the properties were difficult to match with absolute certainty because of different variations of addresses and names across the different datasets. This was particularly prevalent in rural areas which resulted in some duplication of properties on the Property Register or the incorrect association of some individuals with properties that were unconnected to them. Throughout its communications programme, Revenue clearly stated that it was inevitable that some of the data matching would be incorrect given the scale of the project and advised all property owners who received incorrect details in regard to their properties to make immediate contact to correct the record. Revenue also advised that, if taxpayers did not make contact, they ran the risk of being incorrectly assessed for LPT against a property they did not own or that possibly did not exist (i.e., a duplicate entry on the register).
In regard to the specific case mentioned by the Deputy, Revenue has informed me that the person in question was categorised as a ‘multiple owner’ of two properties on the Property Register. Revenue subsequently assessed the person in respect of both properties for 2013, which was repeated for 2014. This gave rise to the €810 charge, which was €405 in respect of each property.
The person was assessed for the two properties for 2014 because, while he paid his 2013 liability on one property, he did not make contact with Revenue about the other property. As a consequence Revenue issued an estimated notification for the ‘second property’ in addition to the correct notification in regard to the ‘first property’.
I am advised that Revenue has now contacted the person in question and has established that there is only one property involved and that the ‘second property’ is in fact a duplicate. The Property Register has been updated to reflect the correct situation and the taxpayer has been advised that his LPT liability for 2014 is €405.
208. Deputy Michael McCarthy asked the Minister for Finance the way the single person child carer tax credit will be applied where there is shared custody; if it will be possible for parents to split the credit taking access and maintenance arrangements into account; and if he will make a statement on the matter. [46714/13]
View answerAs 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.
209. Deputy Terence Flanagan asked the Minister for Finance the position regarding uncollected local property tax in respect of a person (details supplied) in Dublin 5; and if he will make a statement on the matter. [46730/13]
View answerI am advised by Revenue that it outlined the sequence of events that led to the Local Property Tax (LPT) payment difficulties in this case when responding to the Deputy’s previous Question on the issue (Question No. 14 on 15 October 2013, 43163/13). Revenue also acknowledged and apologised for the error at that time. In summary, the property in question was not included on Revenue’s Property Register due to conflicting address information held on the various IT systems from which Revenue electronically extracted the data. The issue was manually investigated and the properly was then included on the Register. Unfortunately, during the upload process the person’s payment option did not correctly transfer across to the Register.
Revenue again apologises for the error and also accepts that it was not aware of the issue at the time the Deputy made his original representation. However, as soon as Revenue became aware of the issue, a member of the LPT team made contact with the person concerned, to firstly offer an apology, and to explain the alternative payment options available. A revised payment arrangement was agreed with the person and direct contact details were left with her in case she required any further assistance or clarifications. I am assured that this contact arrangement is still in place should the person or her daughter wish to discuss the issue further.
I note the Deputy’s concern that the issue was only resolved because of his intervention. However, Revenue assures me that the issue would have been identified through the various validation processes and compliance programmes that are in place to ensure the accuracy of the information stored on the Register.
Finally, the Deputy will be aware that Revenue clearly indicated in all of its communications that some errors were inevitable given the scale of the requirement to build a Property Register in such a short period of time. Revenue assures me that this process is for the most part complete and it is anticipated that errors of this nature are unlikely to arise into the future.
210. Deputy Finian McGrath asked the Minister for Finance the advice he will offer to persons (details supplied) in relation to a bank overdraft. [46782/13]
View answerAs the deputy will be aware for contractual confidentiality reasons AIB is precluded from discussing or divulging details of individual customer accounts. However I am advised by the Bank that all customers are dealt with fairly and in line with AIB’s existing bank credit & lending policies. Where customers are experiencing financial difficulty I would encourage them to engage with their relationship manager or their local branch as early as possible to ensure a mutually acceptable solution can be achieved.
211. Deputy Brendan Ryan asked the Minister for Finance the number of private health insurance policies that will be directly affected by the measures announced in budget 2014; the VHI plans that will be affected; the percentage of VHI policies this represents; and if he will make a statement on the matter. [46793/13]
View answer212. Deputy Brendan Ryan asked the Minister for Finance the VHI insurance plans that will not be affected by the measures announced in budget 2014; and if he will make a statement on the matter. [46794/13]
View answerI propose to take Questions Nos. 211 and 212 together.
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 provide cover for 1.1 million individuals, 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. However, it should be noted 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 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.
Pricing of insurance premiums, and consequently the policies that are affected by the introduction of the new ceilings for tax relief, is a matter for health insurers. As the information requested in respect of the VHI is of a commercially sensitive nature, I am informed by the Revenue Commissioners that their obligation to observe confidentiality for taxpayers and small groups of taxpayers precludes from providing the information requested.
