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Tax Reliefs Eligibility

Dáil Éireann Debate, Tuesday - 12 November 2013

Tuesday, 12 November 2013

Questions (111)

Lucinda Creighton

Question:

111. Deputy Lucinda Creighton asked the Minister for Finance if any impact assessment was conducted to assess the number of additional private health insurance policy holders who may no longer maintain their private health insurance policy as a consequence of the tax relief changes for private health insurance announced in budget 2014; and if he will make a statement on the matter. [48290/13]

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Written answers

Firstly, I should point out that it is the standard practice for the Minister for Finance to review all tax expenditures and reliefs in the run up to the annual Budget.

As the Deputy may be aware, the cost of Income Tax relief in respect of medical insurance has increased significantly in recent years (estimated at €404 million in 2011, €448 million in 2012 and €500 million in 2013).

It would be extremely difficult to estimate the number of individuals who may no longer maintain their private health insurance policy as a consequence of the Budget day announcement restricting tax relief in respect of medical insurance premiums.

The cost of medical insurance increased by 86% between December 2008 and June 2012 according to the Consumer Price Index. Despite the increasing cost of the relief, the number of policy holders subscribing for medical insurance is estimated to have reduced from 2,297,000 to 2,123,000 over the same period; a reduction of 174,000 persons, or 7.5%. Hence, demand for private medical insurance has been relatively resilient in the face of sharp cost increases.

Individuals can of course opt for less expensive policies and therefore avoid the impact of this measure entirely, which adds further complexity to any attempt to calculate or estimate the numbers that might forego medical insurance cover going forward.

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