Tax Reliefs Data

Dáil Éireann Debate, Thursday - 16 July 2015

Thursday, 16 July 2015

Questions (186)

Michael McGrath

Question:

186. Deputy Michael McGrath asked the Minister for Finance the number of customers for whom tax relief on their private medical insurance is capped; the percentage this is of all customers claiming tax relief on private medical insurance; and if he will make a statement on the matter. [29816/15]

Written answers

Minister for Finance

As the Deputy will be aware, since 16 October 2013, tax relief for medical insurance premiums has been 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 no longer qualifies for tax relief. Prior to this, income tax relief for medical insurance premiums was provided at source, at the standard rate of income tax, on the entire premium amount regardless of cost. Therefore, the State was paying 20% of the cost of all private medical insurance premiums.

I am informed by Revenue that returns for the year 2014, the first full year of operation of the ceiling, are not yet available, and therefore it is not possible as yet to determine the number of customers for whom tax relief was capped. It was estimated at the time of the introduction of the measure that 577,000 policy holders that provide cover for 1.1 million individuals may be affected by the ceilings.

Notwithstanding the recent reform, the tax system is still supporting those who can afford private medical insurance with the cost of the relief estimated at €354 million in 2014. Effectively that means that some taxpayers who could never afford private health insurance, or who have had to give up their policies due to personal circumstances, are continuing to provide financial support via the tax system to those individuals who can afford such insurance.

It should be noted that the Commission on Taxation in its 2009 report recommended the retention of medical insurance relief but that it should be limited. The introduction in Budget 2014 of an upper ceiling on the amount of medical insurance premiums that qualify for tax relief achieved this recommendation.