asked the Minister for Health the number of (a) self-employed and (b) farmers from whom health contributions were outstanding at 31 December 1982, who have paid in the intervening period.
10.
Ceisteanna—Questions. Oral Answers. - Health Contributions.
9.
asked the Minister for Health the amount of money from (a) farmers and (b) self-employed outstanding at 31 December 1982, which has been collected in the intervening period; and the measures he intends to take to ensure that the balance is collected.
I propose to take Questions Nos. 9 and 10 together.
A total of £373,362 was collected from 8,310 farmers, from 1 January to 31 August 1983. In the period 1 January 1983 to 30 September 1983 a total of £66,513 was collected from 1,395 other self-employed persons.
Health contributions are an important element of the funds available to finance our health services and any shortfall in these contributions can have very serious consequences in the present financial climate. As a first step in the process of eliminating arrears I have informed health boards that collection arrangements which fall within their area of responsibility should be implemented as fully and as rapidly as possible and that penalties for failure to pay contributions should be fully invoked.
I am considering imposing significant charges for in-patient hospital services supplied to persons who are in arrears with contributions. These measures should serve to reduce considerably the arrears now outstanding in relation to health contributions.
Is it the position that of the 104,000 farmers who are liable to pay health contributions, only 8,000 have paid to date and that of the 106,000 self-employed who are liable to pay this contribution, only 1,300 have paid?
The Deputy is correct but I would draw his attention to the fact that the moneys paid from January last in relation both to farmers and to self-employed were in respect of arrears. The sum was very small in terms of the very large amount of moneys which are due both from farmers and from other self-employed people. As the Deputy knows, the arrears as at 30 September were estimated by the Revenue Commissioners to be in the region of £13 million in respect of both farmers and self-employed. About £8 million of that would be attributable to farmers. The payments I have mentioned were in respect of arrears because in relation to farmers the assessments were issued in the last quarter of this year but we had considerable difficulty in that respect, first, in respect of the change from notional to the factual system of assessment and also because of the trade union concerned who blacked the collection of arrears because they regarded it as additional work. That action was lifted only recently. Consequently, the net effect in the current financial year is likely to be small. The underlying point I wish to make is that I intend considering the imposition of significant charges, especially public ward charges, for those who, at the point of entering hospital, are in arrears with their health contributions. That matter will be considered by the Government in the context of preparing for next year's budget. I consider it appalling that while every other worker must pay on a deduction basis each week, there are many thousands who make no contribution.
Are the arrears to which the Minister has referred outstanding only to January 1982 or do they go back further?
One must be very careful about arrears just as one must be careful in relation to assessments. In the case of income tax arrears a figure of £1,400 million has been bandied around. The health contribution arrears are estimated arrears in respect of the self-employed. These are £8 million in respect of farmers and about £5 million in respect of the other self-employed. I expect that a very substantial proportion of the amount in respect of farmers is correct but that there could be an over-assessment in respect of the self-employed because they tend to be over assessed by the Revenue Commissioners. However, of the £13 million at least £9 million is well overdue and that is money that I am determined to get. Unfortunately, legislation in relation to the health boards and to the delivery of health services is not adequate but that could be remedied in the coming year.
Would the Minister accept that it is unsatisfactory to have health boards collect health contributions from farmers. The self-employed pay direct to the Revenue Commissioners while the contributions are deducted from the PAYE sector. Is there any plan to change the method of collection as it relates to farmers?
As and from next year it could be the intention that the Revenue Commissioners would collect the health contributions but there still remain arrears of health contributions which were due legally to health boards. It might be difficult for the boards to discharge that onus to the commissioners but certainly in terms of income tax liability where health contributions are cojoined and levied, it would be the intention that in the next tax year the commissioners would ensure that payments are made. It may well be that the health boards will seek to obtain the large amounts of money due to them by whatever legal means are at their disposal. The only option is to ensure that people who have not paid their contributions and who require hospital services pay for them before the services are provided.
In the context of the change in the system of assessment, it is the gross income that is taken into account, but would the Minister examine the possibility of having this changed to net income? That would be the only fair system of assessing farmers' incomes. Would the Minister not agree that in relation to the arrears for 1982, the assessments for both 1982 and 1983 were only forwarded in August last and that consequently it would be very difficult for farmers to pay their contributions for 1982 since exactly what they owed in respect of that year has not been assessed?
The main issue arises in relation to assessment in respect of capital allowances but I would point out that farm income is assessed on the basis of profits derived from farming activities after the deduction of expenses, and the allowances for expenses are quite considerable. Allowances in respect of rents, rates, wages paid out, repairs to machinery and equipment, purchase of seeds, fertilisers and so on are allowed; business interest is allowed; stock relief is allowed as is any sum paid by a farmer towards superannuation; but depreciation — this is the nub of the issue — including plant and equipment is not allowed. I cannot support an assessment system which would allow a farmer to deduct expenditure on fences, roadways, holding yards, drains and land reclamation. I must assess some income, and on that basis no other section of the community, self-employed or otherwise, gets capital allowances of that magnitude allowed against profits.
I have just one final supplementary.
No. I have got three final supplementaries from three people.
Would the Minister agree that the method of collection today has been an absolute failure and that that must reflect upon his Department? Is he aware that health boards from time to time since 1970 have suggested methods under which this money might be collected, such as using the rate collectors, and his Department refused to do so? Will he consider this method of collection? He will know, as everybody else here does, that the rate collectors have been most successful in the collection of any moneys. Also, will he agree with me that the method that he now suggests, whereby he intends to collect from those in debt as they go into hospital, is already the practice and therefore will serve no purpose whatever?
It should not be necessary for the Minister for Health of the health boards or for anybody to insist on payment. It is moral obligation ——
If the Minister adopts that attitude ——
Deputy Byrne, allow the Minister to reply.
It is a moral obligation if nothing else, on those in the community who are demanding health services to pay the minimum small health contribution, and I appeal to farmers and the self-employed to go into their health board office and pay their contributions either half yearly or full yearly. If they have the slightest difficulty in finding out their liability, then at a telephone they can virtually calculate their liability. Most farmers if they are looking for a farm modernisation grant or any of the many grants available to them ——
There are no other grants available to them.
——have no difficulty in filling in forms when they are claiming for them.
Would the Minister accept that the health boards have not and never had a proper register of farmers who are liable to pay this health contribution, that some of them in possession of general medical services cards get grants from the health boards although not in a position to pay, and that those who are working and earning more than £13,000 also get grants?
That can be remedied very easily by the Revenue Commissioners making information available to the health boards.
Does he accept that the health boards never had a register?
The health boards at local level have a fairly good idea about income profiles in farming areas and so on. I am quite sure that the Revenue Commissioners would make the information available to the health boards in respect of farmers who have liability for income tax, and health contributions can be calculated on that basis. People will do anything except pay.
Would the Minister accept that the PAYE sector are paying the bulk of income tax and the bulk of health contributions ——
That is a separate question.
Deputy Byrne, you are not in the Chair. Please continue, Deputy De. Rossa.
He is not in the Chair yet.
——the bulk of youth employment levy and the bulk of the special welfare centre levy, and that they pay all of these levies on gross income?
That is quite true, and that is one of the fundamental reasons why I have been endeavouring, with I think success now on the horizon in the next few months, to introduce an effective system. Even after doing all that, I still advise the Deputy that the burden on all of us — he and I pay our health contributions — will still remain very substantial if we want the kind of health service which people are demanding. Nothing is being given for free any longer; otherwise we will all go down the spout.