Vol. 504 No. 3
3 Mr. Allen asked the Minister for Tourism, Sport and Recreation if his attention has been drawn to the fact that the new arrangements under his Department's carding scheme may result in some athletes incurring a tax liability; and if he will make a statement on the matter. [11719/99]
I introduced the international carding scheme in 1998 to provide a range of supports, both financial and non-financial, to assist Ireland's most talented players and athletes realise their potential to perform successfully at the highest international levels.
Arising from experience of the first year of operation, I made a number of improvements and modifications to the 1999 scheme. One such improvement is that players or athletes who have reached international or world class standard in their sport may now opt to have up to half the maximum grant applicable to their category applied to their general living expenses, instead of towards meeting costs directly arising from the pursuit of training and competition programmes. This change was made to facilitate athletes undertaking the gruelling levels of training required to reach world and Olympic finals to participate in full time training.
The question of whether a tax liability arises in respect of any payment made under the international carding scheme is, of course, a matter between an individual athlete and the Revenue Commissioners. The Department of Finance has advised that, in general, payments made to athletes which are directly associated with training requirements are not regarded as income for tax purposes, but it is the responsibility of the player or athlete to satisfy the Revenue Commissioners regarding the nature of such expenses. However, the Department of Finance has also indicated that any part of a grant payment which is applied to ordinary living expenses would be treated as taxable income. This information was conveyed to athletes in the outline of the 1999 carding scheme.
It would, of course, be the responsibility of the player or athlete to declare the amount for income tax purposes and it would be a matter for the Revenue Commissioners to determine if there is a liability to income tax.
Grant payments made under the international carding scheme are subject to tax clearance procedures in the same way as any other grant-subsidy schemes operated by the State.
It is regrettable that the modification to the card system which the Minister made will result in some athletes being liable for tax. Has the Minister considered asking the Department of Finance to classify grants to athletes under the carding system as exempt from taxation? Has he considered discussing with the Department of Finance an offer of tax free status to those athletes who are not earning a great deal, unlike the top athletes involved in international competitions? Has he considered discussing with the Department of Finance the possibility of offering tax free status to those athletes who are not earning the huge amounts of money earned by the top athletes who compete in international competitions throughout the world? It is regrettable that we do not have a tax free status for the grants now being offered to athletes. Will the Minister consider entering into discussions with the Department of Finance so as to offer these grants on a tax free basis?
It is difficult to get everything right at once.
We should try.
I appreciate the Deputy bringing this matter to my attention because until I read this question I was unaware of it. Unfortunately, this is the result of different Finance Bills introduced over the years. The Deputy is aware that up to £24,000 is available to athletes on a graded basis but they have told me that expenses for training purposes and so on have to be vouched, so this year I tried to be flexible. They also told me that much of that money was spent on ordinary living expenses so when I introduced it I asked my Department to make it as flexible as possible. Unfortunately, I then found out about this issue although I am sure the Department of Finance is only applying it on the basis of the Finance Acts brought forward by various Governments. I will try to obtain more information on this particular aspect. I do not want the athletes to experience any undue harassment because of this matter. I thank the Deputy for bringing it to my attention. Perhaps my Department was aware of it; I certainly was not and I was trying to be as flexible as possible.
For the information of the House, should a player athlete decide to avail of the option, the maximum grant that may be awarded in respect of general living expenses in each of the categories is as follows: a world class one athlete can avail of up to £12,000 living expenses; a world class two athlete can avail of up to £9,000; a world class three athlete can avail of up to £7,500; and the international athlete can use £4,500 towards his living expenses. If the Deputy wants to raise this matter with me at a later stage I will be happy to do so.
I welcome the Minister's positive response. I raise the query as a result of an approach made to me by a prominent athlete who had substantial concerns about the implications of the tax position. Will the Minister take into consideration that some of our athletes exist on social welfare and a grant they receive from the Minister's Department? Income from all sources is liable for taxation. Will the Minister consider preparing a memorandum for the Minister for Finance on the question of offering these grants on a tax free basis? Surely we owe that to our prominent athletes and potential world champions. To extend the question slightly—
We must now proceed to Question No. 5. The six minutes have expired. I call Question No. 5.
My question and my supplementaries were short.
Unfortunately, the Chair has to implement the rules laid down by the House.
The Minister is flexible. I will be brief.
The Chair has no discretion to change the rules. Question No. 5.
I will not argue that one.
Perhaps we could consider the matter in the next Finance Bill.
I ask that our athletes contributions be exempt from taxation.
