I move:
That Dáil Éireann approves the following regulations in draft—
Health Contributions (Yearly Reckonable Income) (Variation) Regulations, 1982,
a copy of which regulations in draft was laid before the House on 18th March, 1982.
Subsection 3 of section 9 of the Health Contributions Act, 1979, provides that the Minister for Health may by regulations vary the income ceiling level which, taken in conjunction with the rate of health contributions applicable, determines the maximum amounts of contributions payable in respect of an individual in any particular contribution year. Subsection 5 of section 9 of the Act of 1979 requires that a draft of the proposed regulations shall be laid before each House of the Oireachtas and that the regulations shall not be made until a resolution approving of the draft regulations has been passed by each House. The draft regulations now before the House deal with the income ceiling which, it is proposed, shall apply in relation to the contribution year commencing on 6 April 1982.
The original ceiling level specified in the Health Contributions Act, 1979, was £5,000. This was varied to £5,500 before income-related health contributions came into operation on 6 April 1979. The latter sum was varied to £7,000 under regulations approved by both Houses of the Oireachtas in March 1980 and applied to the contribution year commencing 6 April 1980. This ceiling was increased again in 1981 to £8,500 with effect from 6 April 1981.
The proposed new ceiling figure is £9,500. This will apply to the contribution year commencing 6 April 1982. This ceiling of £9,500 is the same as that specified in the Social Welfare Bill, 1982, which we have already discussed.
The income limit for free hospital consultant services will also be raised to £9,500. This new limit will come into operation from 1 June 1982 and will relate to income for the year ending 5 April 1982. The reason for the later date arises from the necessity of producing evidence of income when claiming entitlement. The usual evidence required in the case of employed persons is the form P.60 issued by employers. This may not be issued until some weeks after 5 April. However, the later date is to the general advantage of applicants as their eligibility during the months of April and May 1982 will depend on their income for the year ended 5 April 1981. All persons are now entitled to free hospital inpatient services in a public ward and to free out-patient services. Those who had incomes of £9,500 or more in the year ending 5 April 1982 will be liable to pay the consultant's fees.
For the purposes of collection of health contributions, income is divided into three streams:
Income which is liable for income tax under the PAYE system and which is derived from Insurable Employment;
Income which is liable for Income Tax under the PAYE system but which is not derived from insurable employment;
Income which does not fall within the previous categories such as income from farming, the income of self-employed persons and investment income.
The collection of health contributions from employees is integrated with the administrative machinery for the collection of pay-related social insurance contributions and redundancy contributions through the PAYE tax system.
It is necessary that the ceiling levels for social insurance, redundancy and health contributions should be identical: otherwise the operation of the collection system would be more costly and far more cumbersome. In particular, the co-ordinated arrangements facilitate employers in the administrative processes involved at their end.
The collection of health contributions from individuals with income which is liable for income tax but which is not derived from insurable employment is arranged through the tax collection system. The collection of health contributions in respect of income derived from farming is administered by health boards. Taking into account the situation as regards farming income, the multiplier which is used by health boards in the notional assessment of income for health contributions purposes will remain unaltered for the contribution year 1982-83 at 117.
It is estimated that raising the ceiling level from £8,500 to £9,500 should result in an increase in the amount of contributions to be collected of approximately £2 million in the contribution year 1982-83. Of the estimated additional income about £200,000 should arise in the calendar year 1982. The remainder of the additional yield should be paid over in the first quarter of 1983. This position arises simply because most contributors with incomes under £9,500 will not have paid over their maximum contribution by the end of 1982. These represent by far the greatest proportion of income earners.
As I have already mentioned, the purpose of the draft regulations is to fix the upper limit of income in relation to which the amount of the health contributions payable in respect of any one individual in the contribution year commencing 6 April 1982 will be determined. I now ask the House to approve of the Health Contributions (Yearly Reckonable Income) (Variation) Regulations, 1982 in draft.