Vol. 550 No. 1
83 Ms Shortall asked the Minister for Finance if there is a concession available to a person whose income increases by a given amount with the effect that he is 95 cents per week above the threshold for payment of the health levy and resulting in a substantial net loss to the person; if not, his plans to amend legislation to eradicate this discrepancy; and if he will make a statement on the matter. [7396/02]
There is no concession available to the category of income earner mentioned by the Deputy to address what is known as the "step" effect which is experienced by such persons when their incomes increase to just above the health levy threshold. The health contribution levy is charged at a rate of 2% with only a few exceptions, e.g. social welfare payments, including social welfare pensions. The 1994 budget introduced a low income exemption threshold for the levy of €11,428, £9,000, per annum which meant that where a person's income was lower than the threshold he/she was not liable for the health contribution. However, when a person's income rises above the threshold, the levy is payable on the person's total income from the first cent of that income.
From 6 April 2000, the health contribution threshold was substantially increased by €4,203, £3,310, from €14,285, £11,250 per annum to €18,488, £14,560 per annum, or from €276, £217 per week to €355, £280 per week. This significant increase has exempted even more low income earners from the health contribution. Because of this sizeable increase in the threshold for the levy I decided not to increase it further in the past two budgets. The levy threshold was introduced in order to focus assistance towards those on low incomes. The Government was aware of the "step" that exists at the levy threshold when the threshold was introduced. I have no plans at present to change the system. Nonetheless, I am aware of the difficulties encountered by persons when their income increases to just above the threshold and its operation will continue to be reviewed on a regular basis.
84 Mr. N. Ahern asked the Minister for Health and Children if, further to the provision introduced in 2001 where the health levy was removed from those over 70 on occupational pensions, his views on the request to introduce an exemption from this 2% levy for those on occupational or illness pensions under 70; and if this can be included before the Finance Bill is enacted. [7260/02]
The introduction of medical cards to all persons over 70 in 2001 automatically exempted these people from the 2% health contribution. Introducing an exemption from the 2% levy for those on occupational or illness pensions under 70 is an entirely separate issue, and is independent of the over 70 situation. Any decision on such an exemption is a matter for the Minister for Finance.
