Written Answers. - Higher Education Grants.
Paul McGrath
Ceist:
347
Mr. P. McGrath
asked the
Minister for Education and Science
if he will review his decision concerning the means test for higher education grants and the inclusion of SSIA bonus payments made by the Government in view of the recent definitive statement from the Revenue Commissioners that bonus payments paid to SSIA holders are actually tax refunds; and if he will make a statement on the matter.
[25166/03]
Paul McGrath
Ceist:
348
Mr. P. McGrath
asked the
Minister for Education and Science
if tax refunds made to the parents of applicants are taken into consideration in assessing income for higher education grants.
[25167/03]
I propose to take Questions Nos. 347 and 348 together.
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-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. Tax refunds are excluded in calculating reckonable 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. It is understood that there is nothing new in the recent statement by officials of the Revenue Commissioners to the public accounts committee. The press release on the Finance Bill 2001, dated 15 February 2001, described how the new savings scheme "will be assisted by a top-up to net savings of 25% out of tax revenue by the State, equivalent to tax credit of 20%," and the Minister for Finance stated on Committee Stage of the Finance Bill 2001 that the top-up was "equivalent to giving a tax credit at the standard rate of income tax for the year of assessment 2001 in respect of the amount saved."
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 investment 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, including the top-up, 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.
My Department is satisfied that the approach taken to computing reckonable income for purposes of determining eligibility under the maintenance grant schemes is appropriate.
Question No. 349 answered with Question No. 292.
