Written Answers Nos. 59-65
59. Deputy Pearse Doherty asked the Minister for Finance if his reported comments on 18 September 2014 that getting the deficit below 3% of GDP next year could now be achieved without further spending cuts or tax rises are based on the collection of €500 million in domestic water charges next year or on an assessment that excludes this €500 million. [35969/14]
View answerBased on the latest macroeconomic and fiscal data, it is now expected that a deficit of less than 3% of GDP can be achieved without further tax increases or expenditure cuts over and above what has already been outlined. This is primarily as a result of the better than expected tax take and improving economic outlook. However, I would make the point that these estimates are subject to finalisation in light of the end-September Exchequer figures and other salient information.
With regard to water charges, I am informed by the Minister for the Environment, Community and Local Government that the Commissioner for Energy Regulation is to make a determination on the level of charges later this month. The monies raised for water charges will be received by Irish Water which is a not part of general government. As such, these receipts do not count as general government revenue and accordingly will not impact on the deficit.
60. Deputy Michael McGrath asked the Minister for Finance the role MIBI will play in compensating claimants due awards under Setanta policies; and if he will make a statement on the matter. [35976/14]
View answerMIBI obtained a legal opinion and, having considered it, advised the Minister for Transport, Tourism and Sport in late July that the 2009 agreement with him does not require the MIBI to satisfy awards against drivers covered by a policy of insurance where the insurer is unable to pay all or part of an award because of insolvency.
Jointly with the Minister for Transport, Tourism and Sport, I have obtained legal advice on this matter from the Attorney General. Having considered the Attorney General's advices, I intend to proceed on the basis that MIBI will not be playing a role in compensating claimants due awards under Setanta policies.
With regard to the general position with the Setanta liquidation, you will appreciate that a liquidation of an insurance company is a legally complex and time consuming process. In general terms, under the Statute of Limitations, claimants are given two years following an accident to make an initial claim. However, it could take several years for a particular case to be settled. These are factors that the Setanta Liquidator is currently examining in order to estimate the cost of claims, and the extent to which claims can be met in the Setanta liquidation.
The Insurance Compensation Fund (ICF) provides for payments to meet the liabilities of insolvent insurers in cases where it is unlikely that claims can be met otherwise than from the ICF. Under the Insurance Act 1964 claims by a body corporate or an unincorporated body are not covered by the ICF, except where there is a liability to or by an individual. In addition, all ICF payments are subject to a limit of 65% of the amount due or €825,000, whichever is the lesser. Management and administration of the ICF is under the control of the President of the High Court acting through the Office of the Accountant of the Courts of Justice. In view of the clarifications in relation to the MIBI position, it is a matter for the Office of the Accountant of the Courts of Justice to finalise arrangements for processing ICF claims.
My officials continue in discussions with the High Court and with the Setanta Liquidator with a view to achieving more certainty in relation to the standing of claimants as soon as possible.
61. Deputy Michael McGrath asked the Minister for Finance if the exemption of water services from VAT based on a derogation from EU law contained in Article 371 of the EU VAT directive is permanent or subject to ongoing review; and if he will make a statement on the matter. [35977/14]
View answerThe supply of water by local authorities and Irish Water is exempt from VAT. This VAT exemptions applies to all supplies of water, including supplies to domestic households, businesses and others.
Ireland's long standing VAT exemption for the supply of water is contained in paragraph 14(2) of Schedule 1 to the VAT Consolidation Act 2010. As you are aware, the exemption is based on a derogation from EU VAT law contained in Article 371 and Annex X of the EU VAT Directive. This VAT treatment is not subject to ongoing review.
63. Deputy Seán Kenny asked the Minister for Finance the amount of additional tax revenue collected since tax reliefs for private health insurance were reduced. [36022/14]
View answerI am informed by the Revenue Commissioners that figures in respect of the cost to the Exchequer of tax relief for medical insurance premiums, allowed through the tax relief at source (TRS) system for the period January to August 2013, prior to the introduction of the tax relief ceiling in October 2013, and the estimated costs for the same period in 2014 are set out in the table below.
|
Tax Period |
Cost €m |
|
Jan-August 2013 |
322 |
|
Jan-August 2014 (provisional) |
254 |
The figures for 2014 are provisional and subject to revision.
64. Deputy Seán Kenny asked the Minister for Finance the amount of additional tax revenue collected since the VAT rate for the hospitality sector was reduced. [36023/14]
View answerI am informed by the Revenue Commissioners that the details on payments of VAT are not recorded in such a manner as would provide a basis for compiling the information sought by the Deputy.
65. Deputy Michael McCarthy asked the Minister for Finance his plans to introduce a graduate entry medicine loan tax relief scheme in view of the huge costs associated with the course, the cost of living and the fact that the intensity of this work excludes the opportunity for part-time work; if he or his Department has examined a proposal involving a tax-based mechanism of relieving the burden of these debts on non-consultant hospital doctors and making the repayments more realistic; the benefits for the country of giving non-consultant hospital doctors a tax incentive to stay in the public health care service; and if he will make a statement on the matter. [36030/14]
View answerThe graduate entry programme provides undergraduate medical education of four years duration and has been developed to produce medical graduates with the ability to successfully undertake an internship and thereafter to gain full registration with the Medical Council. The programme is supported by a combination of student fees, State funding and other income.
While in this case the fees could be considered high, in the majority of cases where third level tuition fees are payable they are at much lower levels. In addition, those participating in the programme must already have acquired an undergraduate degree, the fees for which would have been covered by the State in the vast majority of cases.
I would point out that tax relief at the standard rate of 20% is available in respect of qualifying fees paid by an individual for a third level education course, including a postgraduate course.
Qualifying fees mean tuition fees in respect of an approved course at an approved college and includes what is referred to as the "student contribution". No other fees e.g. administration fees, examination fees, capitation fees, qualify for tax relief. Tuition fees that are, or will be, met directly or indirectly by grant, scholarship, employer contribution or other means are deducted in arriving at the net qualifying fees. A claim for relief may be made in respect of a number of students.
In making a claim for relief for the tax year 2014, the maximum amount of fees that can qualify for the relief is €7,000 per student, but an amount set out in the legislation must be disregarded from each claim (whether in respect of one or more students). Where a claim for relief includes fees paid on behalf of at least one full-time student, the disregard is €2,750. Where a claim for relief includes fees solely paid on behalf of a part-time student or part-time students, the amount disregarded is €1,375. Thus, for example, an individual undertaking a graduate entry medical course on a full-time basis, where tuition fees of €15,000 per student apply, would attract relief of €850 made up as follows:
|
Fees |
€ |
|
Tuition fees |
€15,000 |
|
Capped at |
€7,000 |
|
Less |
€2,750 |
|
€4,250 @ 20% = €850 |
It is a longstanding practice of the Minister for Finance not to comment, in advance of the Budget, on any tax matters that might be the subject of Budget decisions. However, as with all tax reliefs, the introduction of tax relief for loans taken out to pursue the graduate entry medical programme will be considered in the context of the forthcoming Budget and Finance Bill and any announcements will be made on Budget Day.
