Dáil Éireann díospóireacht -
Thursday, 3 Jul 2003

Vol. 570 No. 4

Written Answers. - Higher Education Grants.

David Stanton

Ceist:

224 Mr. Stanton asked the Minister for Education and Science his views on reports that people who availed of the special savings incentive schemes will have such savings taken into account by his Department when income is being calculated with reference to third level maintenance grants; the way in which such calculations will be made; if such decisions will have an impact on the next round of grant applications and decisions; and if he will make a statement on the matter. [19426/03]

Minister for Education and Science (Mr. N. Dempsey)

For the purposes of my Department's maintenance grants schemes reckonable income means all amounts – with the exception of defined social welfare and health board payments – received or receivable by an individual without reference to his or her residence or domicile, from both Irish and foreign sources, which are liable to Irish income tax, Irish capital gains tax or Irish capital acquisitions tax, or which would be so liable but for exemptions and reliefs contained in Irish legislation. The intent of this definition is to ensure that all types of income will be included in determining a person's income for grant purposes.

For the purposes of determining grant eligibility, all investments must be declared, including deposit accounts, savings certificates, life assurance bonds and other financial instruments where the interest-profit is accumulated and paid out as a lump sum at the end of the investment period.

Where income is paid out annually, as happens with a bank deposit account, the amount so paid is required to be included in reckonable income. Where income is not paid out annually but is rolled-up and paid out with the original invest ment at the end of a defined term, the annual amount required to be included in reckonable income is the rolled-up income divided by the number of years in the term of the investment. This procedure has been in place for the past ten years.

Given its similarity with roll-up savings products it was deemed appropriate to include, as reckonable income, income from SSIAs on an annual basis. The treatment of the SSIAs in this regard is consistent with the treatment of similar financial products such as post office savings certificates.

The amount of income to be included in respect of SSIAs is the Government grant earned on the savings in the relevant tax year plus, in the case of savings accounts, the gross interest earned in the relevant tax year and, in the case of investment accounts, the investment profit earned in the relevant tax year. Investment losses sustained in the relevant tax year are deductible. Reckonable income will not include any element of the person's own contributions to the account.

My Department is satisfied that the approach taken to computing reckonable income for purposes of determining eligibility under the maintenance grant schemes is appropriate.