Dáil Éireann díospóireacht -
Wednesday, 13 Feb 2013

Vol. 792 No. 2

Topical Issue Debate

VAT Rates Exemptions

Deputy Ann Phelan

On the day that is in it, Ash Wednesday, I thank the Leas-Cheann Comhairle for allowing me to introduce this Topical Issue. I am keen to discuss how we might be able to help people. I know many are struggling with their conscience today and trying to decide whether they should give up cigarettes. Taking up smoking is easy, but it is remarkably difficult to give it up.

Like many others, I took up smoking in my teens because my peers smoked. We were all trying to look cool at the time. Unfortunately, the years have proved it to be a rather unwise decision. Like anyone else of that age, I never looked to the future and was oblivious to any harm caused, but harm was being done unbeknownst to me.

Science has come up with new methods aimed at helping people to give up smoking. A range of products are now available for sale to help those who find themselves hooked on cigarettes to such an extent that it is a multimillion dollar worldwide industry. If the Government and society seriously want people to give up smoking and live healthier lives, they should try their best to help those who wish to stop. Currently, all of the products aimed at helping people to give up smoking, including mouth sprays, patches, chewing gum and artificial cigarettes, are subject to a full VAT rate of 23%, whereas over the Border in Northern Ireland and Britain the Chancellor of the Exchequer has reduced the VAT rate on these products to a special rate of 5%.

I call on the Minister of Finance to consider introducing a special rate of VAT to encourage people to kick the habit. This may seem like a costly move, but it should be weighed against the current spend on trying to heal those with smoking-related illnesses, estimated to be €1.5 billion. According to figures released by the Irish Heart Foundation today, the Government spends over 100 times more on treating tobacco-related illnesses than on services designed to help people to quit. The foundation has also stated more resources are needed if we are to reduce the 14 deaths every day from smoking-related illnesses.

Owing to legislation enacted in recent years we have made great strides in reducing the number who smoke, but we have a long way to go. The problem with smoking is that the damage is often incremental and, therefore, giving up is put on the long finger. Thankfully, new legislation means that, from now on, all cigarette packets must display graphic images illustrating the long-term effects of nicotine and tar on our vital organs. This method has proved to be effective in communicating the true consequences of smoking and has worked especially well in Australia.

Figures from ASH Ireland indicate the prevalence of smoking in Ireland is somewhere in the region of 26% to 29%. These rates are far too high. The banning of smoking in public places has been a tremendous success. I have remarked already that a special rate of VAT would be of great assistance in helping people to stop. It has been noted that the cost of using therapies to help people to stop smoking has kept some from giving it up. Furthermore, nicotine replacement therapies are sold from behind the counter in pharmacies, whereas in the United Kingdom and other countries they are sold off the shelf in a wide variety of stores, not only in chemists, thereby easing the burden of buying them. I hope the Minister of State will take my suggestion on board.

Minister of State at the Department of Finance (Deputy Brian Hayes)

I am pleased to take the opportunity to speak on behalf of the Minister for Finance on the question of the VAT treatment of nicotine replacement patches posed by the Deputy. I thank her for raising the matter on the day in question. It is apt, given the importance of today, a campaign day to encourage people to give up smoking. I congratulate the Deputy on raising the matter on the floor of the House.

The VAT rating of goods and services is governed by the requirements of the EU VAT directive, with which Irish VAT law must comply. In this regard, it may be useful to remind the House of the structure of Ireland's VAT regime. Deputies will be aware that Ireland operates several VAT rates as follows: the standard VAT rate of 23% applies to the majority of goods and services, including cars, petrol, diesel, alcohol, tobacco, electrical equipment, CDs and DVDs; a reduced rate of 13.5% applies mainly to fuel used for heat or light, construction, housing, labour intensive services and general repairs and maintenance; a second reduced rate of 9%, introduced as part of the jobs initiative, applies mainly to tourism-related services, including hotel and holiday accommodation, restaurant services and some entertainment services; while the zero VAT rate applies to most food, children's clothes and shoes and oral medicines.

As the Deputy has correctly pointed out, nicotine replacement patches are subject to the standard rate of VAT of 23%. Unlike other nicotine products such as nicotine inhalers, tablets and chewing gum which are categorised as oral medicines and thereby qualify for the zero rate of VAT, nicotine replacement patches do not fall into this category of oral medicines and are, therefore, correctly subject to the 23% rate of VAT. However, I understand from the Revenue Commissioners that member states have the option under annexe III of the EU VAT directive to apply a reduced rate of VAT to pharmaceutical products of a type normally used for health care, prevention of illness or as treatment for medical purposes. In this regard, since nicotine replacement patches could be considered to meet such criteria, Ireland would have the option to apply a reduced rate to such products. However, constraints imposed by the VAT directive on the number of reduced VAT rates which a member state can operate at any one time do not allow for the possibility of a special reduced VAT rate of 5% to match the treatment in the United Kingdom, as suggested by the Deputy. Article 98 of the VAT directive provides that member states may apply either one or two reduced rates to the goods and services listed in annexe III of the VAT directive. The introduction of a third reduced VAT rate would, therefore, not be possible under EU VAT rules. Accordingly, any reduction in the VAT rate on nicotine replacement patches would, therefore, have to be considered in the context of the existing 9% or 13.5% reduced rates.

Naturally, any proposal to reduce the VAT rate applying to any good or service raises several questions. The Deputy will not be surprised that I emphasise the need to maintain VAT revenues and the need to ensure losses to the Exchequer in these difficult economic times are avoided. Notwithstanding the potential health benefits that may accrue from the use of nicotine replacement patches, any losses in one area must be balanced with savings or increased taxes in another. The issue of the degree to which the consumer might benefit from a reduction in VAT on nicotine replacement patches also arises. Unfortunately in this regard, there is no guarantee that moving standard rated products to a reduced VAT rate would necessarily be reflected in full in the retail prices charged to consumers. Any dilution of the potential benefit to the consumer would be a major concern and effectively negate the promotion of the use of nicotine patch technology.

I thank the Deputy for proposing the issue and hope I have clarified the VAT treatment of nicotine replacement patches and the position on the possibilities available under the EU VAT directive.

Deputy Ann Phelan

I take on board the comments of the Minister of State on the constraints under which he is operating. However, I maintain that we should pursue the option, even under a pilot scheme. If the rate was reduced to 9% or if the products were more freely available and not limited to purchase in pharmacies, it would go a long way. If someone wants to make a change, we should ensure the pain of changing is mitigated. We need to make it easier, particularly for anyone in receipt of benefits, as many are. Cigarette smoking represents a substantial loss of income for such persons.

It also keeps them in a poverty trap. We need to keep our eye on the issue. I do not want to preach because, as an ex-smoker, I may sound like the reformed person. At the risk of sounding funny, perhaps we could put the patches on their mouths so they could be covered by the zero rate of VAT on oral medicines.

Deputy Brian Hayes

I suspect the useful suggestion by the Deputy would be a winner with the public if it was followed in this House.

An Leas-Cheann Comhairle

It would make my job very easy.

Deputy Brian Hayes

I am taken by the Deputy's argument for health and prevention. She accepts that the rate cannot be reduced to zero under the confines of the directive but it could be set at 9% or 13.5% if the Minister for Finance was so minded. She will be aware that we had to increase VAT in budget 2012 as part of the adjustment process. She might put her argument to the Minister, who I understand has published the Finance Bill today. It is also open to her to table an amendment in order to tease out the issue in greater detail. Two clear strictures apply to these matters, namely, the VAT directive and the potential loss in a circumstance where every subhead is closely monitored not only by us but also our friends from abroad. However, she made a solid argument and, while I would never attempt to advise someone with such a zeal for reform on the day that is in it, it is an issue she might pursue with the Minister. I will brief him on her contribution and we will keep the matter under review.

Radon Gas Levels

Deputy Michael Healy-Rae

I compliment Deputy Phelan on an excellent contribution and her article in The Irish Times of yesterday. I am grateful for the opportunity to raise the issue of radon gas and the property tax. Houses that have been affected by radon should be exempt from the property tax. To support my argument I have permission to read into the record the following letter I have received from a constituent:

In this paragraph I will give you a brief outline of my own personal situation with radon, a similar situation having been endured by some of my neighbours.

In August 2007 my wife was diagnosed with lung cancer...She had been a smoker for many years but was off them since January 2000. We were aware that houses in the area were affected by radon gas and the type of cancer contracted by my wife can be attributed directly to radon so we decided to get our house tested. We began testing in December 2007 with a kit provided to us by the RPII...In March 2008 we returned the detectors to the RPII and the readings came back excessively high...After getting advice from the RPII I called in an expert to carry out remediation work on the house and he told me it would cost 3,000 euro. As I am a tradesman I carried out the remediation work myself with help from the RPII at a cost to myself of 750 euro (the work involved included the coring of 2x4 inch holes, one at each gable to go under the floor of the house and 2 fans and associated pipework fitted to evacuate the gas and create negative pressure so the gas would no longer leak into the house.) We then commenced a re-test in April 2008 and the results came back July 2008...In 2012 we carried out another re-test to ensure our fans were working properly and they were...It is costing on average approximately 290 euro per year to run the 2 fans...and approximately 140 euro each to replace every 3.5 years. (I also wish to include that my wife passed away in March 2010 from the cancer she contracted, age 44).

As can be seen from the above I am in a predicament:

1. I have a cancer causing gas under my house which is not going away.

2. I have fairly hefty costs associated with keeping this poisonous gas out of my house.

3. My house, as is every other house affected by radon in this country, is effectively worthless not unlike the people affected by pyrite, so I ask you how can I put a value on a house that is unsaleable for the purpose of the property tax as nobody would buy it because of the risks associated with living in it?

Deputy Brian Hayes

Ireland has comparatively high levels of radon, which is a naturally occurring radioactive gas with no colour, taste or smell. Ireland's unique geology, while providing us with our beautiful landscape, also gives rise to indoor radon levels that are above the European average. Homes in Ireland with radon concentrations above the national reference level of 200 becquerels per metre cubed are quite commonly encountered. Most exposure occurs in the home. Radon gas is the main source of radiation exposure in Ireland and represents over half of the average yearly dose of radiation across the population. It is estimated that exposure to radon gas contributes to approximately 200 lung cancer deaths in Ireland each year.

However, it is possible to deal with this problem. I am advised by the Minister for the Environment, Community and Local Government that high radon levels in homes are easy to identify and relatively simple to fix. The testing of houses for radon is a relatively straightforward and non-invasive process. It is also inexpensive, costing around €56, and if the radon levels are found to be below the national reference levels, no further action is necessary. Where radon levels are found to be high, the installation of an active radon sump is the most common and effective remediation method in Ireland. A sump can be installed in a day with little disruption because the work is carried out outside the house. This method typically reduces the highest radon concentrations by 90%. An alternative approach is to increase indoor ventilation. This can reduce radon levels by up to 50% and is thus suitable for homes with up to twice the national reference level.

Despite good progress on radon control in schools and in social housing, testing and remediation rates in private homes remain low. The Government believes that the public profile of this silent killer needs to be raised significantly. We need to encourage more householders to test for radon, particularly those living in older housing stock, as for more than a decade it has been mandatory under the building regulations to install a radon barrier in all new homes built in high radon areas as identified by the Radiological Protection Institute of Ireland, RPII. The RPII is the statutory body under the aegis of the Department of the Environment, Community and Local Government with the role of ensuring that people and the environment are adequately protected from the harmful effects of ionising radiation. The real challenge is tackling the radon problem in older buildings, and particularly homes.

On the question of whether an exemption from local property tax should apply to properties affected by radon gas, the Government agreed with the recommendation of the Thornhill group that the local property tax should be centred on the principles of equity, transparency and simplicity and that a universal liability should apply to all owners of residential property with a limited number of exemptions. The local property tax is a self-assessed tax and will be coming before the House by way of the Bill that the Minister published today. As the Minister indicated to Deputy Healy-Rae on 22 January 2013, he has no plans to provide for an exemption from property tax for properties affected by radon gas.

I believe the national radon control strategy for Ireland is the most effective and appropriate way to address the issue of radon contamination and I do not feel it is appropriate to provide exemptions from the local property tax to cater for every possible adverse circumstance, particularly one which may be capable of relatively simple remediation.

Deputy Michael Healy-Rae

While I appreciate the Minister of State's preparation and delivery of his response, it is factually incorrect. I have documentation in front of me that states a person was quoted €3,000 to deal with and address the problem in his house. I also read into the record the ongoing maintenance costs for ensuring the gas is kept at bay in the house. However, the Minister of State's report suggests remediation is inexpensive and costs approximately €56. Who is right and who is wrong? This man is a case study. Unfortunately, his wife died because of living in this property. Many other people have also died. The Minister of State stated in his reply that 200 people are dying every year because of this poisonous gas.

Deputy Brian Hayes

I said they are dying from lung cancer.

Deputy Michael Healy-Rae

I appreciate that the Ceann Comhairle has allowed this issue be debated today as it is appropriate to raise it on the day the details of the property tax are being issued. When it comes to valuing a house for the property tax, it is wrong that these houses are not being treated in the same way as houses affected by pyrite. To look at it logically, we are telling people to value their houses at proper market value, and I believe the lowest value they can put forward is €100,000, which would mean they would pay €90 tax per year. How could we possibly tell a person that a property affected by this poisonous gas is worth €100,000? How can we say that when it would not make €100,000 on the open market? Surely be to God some amendment could be made to the legislation whereby a nominal fee could be charged on such houses. Perhaps the house might be valued at €40,000 or €50,000, but if it came up for sale who would want to buy it knowing somebody had died in it because of radon gas? I would not take ten such properties if I got them for nothing and I doubt the Leas-Cheann Comhairle would either.

Deputy Brian Hayes

There are two issues here. The first issue falls under the remit of the Minister for the Environment, Community and Local Government as his Department has responsibility for the Radiological Protection Institute of Ireland and for how we deal with high levels of radon gas in domestic homes. The second issue is the treatment of the property tax. When the Revenue Commissioners values a group or cluster of homes in an area, it will put a valuation on the properties. However, as the Deputy is aware, under the legislation set out by the Minister for Finance, it is then up to individuals to challenge that valuation by way of a valuation through other means. If, as the Deputy suggests, the house in question is virtually worthless because of the circumstances, that will follow from a professional evaluation of the property.

The Deputy is concerned that this individual is in an appalling situation and I sympathise with the individual on the tragic death of his wife. In circumstances in which the individual can challenge the valuation, which he can under the legislation, he will argue that the properly is near worthless and, consequently, will not have the liability others will have. It is set out in the legislation that anyone can challenge the valuation put on a property by the Revenue Commissioners. This applies to this individual just as it does to anybody else.

Deputy Michael Healy-Rae

Why was that not done with regard to the houses affected by pyrite then? A special exemption was made for those houses.

Deputy Brian Hayes

The Deputy is aware that the Finance Bill is published today. I would advise him to submit an amendment on the issue and I am sure the Minister will deal with the matter when the Bill comes before the House.

Suicide Prevention

Deputy Dan Neville

I thank the Ceann Comhairle for allowing me to raise this issue.

While the connection between alcohol abuse, suicide, attempted suicide and self-harm is internationally recognised, it is not highlighted often enough. Alcohol dependence often leads to social decline and isolation, which is a potent cause of suicide. Alcohol dependence leads to loss of self-esteem and, hence, depression. These psychological changes predispose people to suicide. Intoxication produces increased impulsiveness and the weakening of normal restraints against dangerous behaviour. This is very important in the context of suicide. Alcohol abuse may be secondary to and an attempt to cope with recurrent episodes of depression.

Little information is available on the position or role of alcohol in the suicides of non-alcoholics, but some studies indicate that a proportion of these people had been drinking shortly before their deaths, perhaps to bolster their courage. It is well established that people who become dependent on alcohol have a high mortality rate through suicide. We also know that if a person who is mildly depressed, particularly a young person, is involved in heavy binge drinking, a period of severe depression can follow for a period. Long after the effects of the alcohol have waned, depression remains. Some research indicates that this could last for from eight to more than 12 hours after a binge drinking session.

With regard to self-harm, the Minister of State is aware that last year, 2011, there were 12,216 presentations to hospital emergency departments in this regard, involving 983 individuals. These presentations demonstrated repeated acts of self-harm and the impact of alcohol on self-harming. During the period 2006 to 2011, the National Suicide Research Foundation in Cork, which keeps the register on this, identified 45,284 individuals involved in 69,581 self-harming presentations. Some 35% of presentations within this period were due to repeat acts. A total of 374 individuals were involved in ten or more repeated acts of self-harm during that period.

Nationally, overdose involving either prescribed drugs or over-the-counter medication, or both, was the most frequently used method of self-harm across all repeated presentations. However, people who had used alcohol at the time of the indexed self-harm act engaged significantly more often in intentional overdose compared with those who had not. Those who used alcohol had also engaged more often in highly lethal methods when they presented after repeat self-harm incidents. People who had not used alcohol in the indexed self-harm act had engaged in self-cutting significantly more often when they presented for repeat incidences. Therefore, those who used alcohol had more serious and more dangerous attempts at self-harm than those who did not abuse alcohol in the same way.

Minister of State at the Department of Health (Deputy Kathleen Lynch)

I know there is limited time for these issues, but I would like to say that the figures Deputy Neville has given are simply the tip of the iceberg. Presentations to hospital emergency units are simply a reflection of the depth and scale of the difficulty. Deputy Neville will agree that when we talk about self-harm, it is not just about people who cut themselves or people who take deliberate overdoses, but also people who drink heavily on a regular basis. I commend Deputy Neville for having been speaking about this issue at a time when most of us found it uncomfortable to do so. I commend him on his work in this area down through the years.

The misuse of alcohol has long been recognised as a contributing factor in many suicides. Our national strategy for action on suicide prevention, Reach Out, recognises that alcohol and substance misuse are strongly related to deliberate self-harm and suicidal behaviour. The Government recognises that we can no longer be tolerant or ambivalent when it comes to the pattern of alcohol consumption and the problems for which alcohol is responsible. A survey on alcohol consumption and alcohol-related harm in Ireland, which was published last year, found that alcohol-related harm is not restricted to the drinker but has negative consequences for families, friends and the wider community. Approximately 20% of respondents experienced some form of harm as a result of their drinking, with men twice as likely as women to report harm. Harm of others as a result of drinking was experienced by 27% of respondents.

In order to counteract the harm caused by the use and misuse of alcohol, real and tangible proposals are being finalised on foot of the recommendations in the national substance misuse strategy report, which was published last year. These proposals cover all the areas mentioned in the report, including legislation on minimum unit pricing, which is about setting a statutory floor price per gram of alcohol. There are also proposals relating to access to and availability of alcohol, including structural separation in retail units where alcohol is sold, as well as advertising and sponsorship. Following consideration by the Cabinet committee on social policy and liaison with other Departments, my colleague, the Minister of State, Deputy White, intends to introduce specific proposals for consideration by the Government as soon as possible.

Suicide is a tragedy that we are constantly working to prevent. We are also working to give more support to families affected by suicide. Reach Out makes a number of recommendations with regard to fast-track referrals to community-based mental health services, effective responses to incidents of deliberate self-harm, training and stigma reduction, etc. As a consequence, the HSE's National Office for Suicide Prevention has developed a range of initiatives to support people who are suicidal. The office is also working to help the families, friends and peers of such people to recognise and respond appropriately to signs of emotional distress and suicidal thoughts. In 2012, the office made progress with a number of key initiatives, including the provision of a wide range of awareness and training programmes, the continuation of the national awareness campaigns, the funding of partner agencies and projects and the development of the recently launched guidance for post-primary schools on mental health and suicide prevention, which were developed with the Department of Education and Skills.

The annual budget for suicide prevention increased this year to over €13 million, with €8.1 million available to the National Office for Suicide Prevention to fund voluntary and statutory agencies' delivery of services in the areas of prevention, intervention, post-intervention and research. The remaining €5 million is available regionally to fund resource officers for suicide prevention, self-harm liaison nurses in hospital emergency departments and local suicide prevention initiatives. The office is working to integrate current programmes within the sector and to provide a strategic framework for co-ordination of the extensive range of actions in this area.

Deputy Dan Neville

I thank the Minister of State for her reply. I recognise the work she has done to develop the National Office for Suicide Prevention over the past two years. The office's budget has doubled from €4.1 million in 2012 to €8.1 million in 2013. Our ambition is to see the level of funding increase to €10 million. I am sure we are on the way to doing that. The Minister of State referred to those who do not attend accident and emergency departments after attempting suicide or self-harming. Research conducted in the UK by Professor Keith Hawton, who is a great friend of the Irish Association of Suicidology, shows that for every one person who presents at an accident and emergency department in these circumstances, eight people do not present. They might go to their general practitioner, or they might not inform anybody of what has happened because of the stigma surrounding these matters. Dr. Ella Arensman, the director of research at the National Suicide Research Foundation, has confirmed that international research corroborates Professor Hawton's figure. If international research by such distinguished scholars and suicidologists is indicating that between 60,000 and 80,000 people deliberately self-harm in Ireland every year, it is clear that we have a serious problem in this regard. I would like the Minister of State to respond to some of the recommendations that have been made by the National Suicide Research Foundation on foot of its work in this area. The foundation recommends that starting at pre-adolescent age, national strategies should be intensified to increase awareness of the risks involved in the use and misuse of alcohol. It also recommends that we should escalate our efforts to reduce access to alcohol and arrange active consultation and collaboration between mental health services and addiction treatment services in the best interests of patients who present with dual diagnoses, such as psychiatric disorder and alcohol abuse. Finally, it recommends that assessment of alcohol misuse and abuse should be a structural part of the work that is done when the risk of repeated self-harm and suicide attempts is being determined.

Deputy Kathleen Lynch

I thank the Deputy for his work in this area. I fully agree with the final point the Deputy made about the need to include excessive alcohol consumption and abuse of alcohol in our consideration of the definition of self-harm. When people who have engaged in self-harm present themselves at accident and emergency departments or general practitioners' surgeries, or contact the health services in some other way, we should take that as an early warning and ensure not only that they are referred to the appropriate services but also that their cases are followed up. That is why, in conjunction with the National Office for Suicide Prevention, we are putting specifically trained nurses into our accident and emergency departments. In the immediate aftermath of incidents of self-harm, the people in question might be traumatised because of the harm they have inflicted on themselves or might be quite drunk and therefore incapable of responding. The following morning, when they have been stabilised, these specially trained nurses will bring them through a follow-on process to ensure they keep the appointments that are made for them with more appropriate services.

I will take on board everything the Deputy has said. Everyone in the country is determined to come to grips with this problem, and any input is very welcome. I thank the Deputy.

Inter-Country Adoptions

Deputy Seán Ó Fearghaíl

I thank the Ceann Comhairle for giving me an opportunity to raise the important issue of international adoption, which affects hundreds of families across the country. I had thought the Minister of State, Deputy Kathleen Lynch, might be with us for this debate because she has had a long interest in this matter. Nonetheless, I am happy that the Minister of State, Deputy Costello, is here to advise us on the Helping Hands adoption agency.

This Government has continued the considerable efforts of its predecessor to ensure Ireland's adoption regime complies fully with the Hague Convention. It is of vital importance that all adoptions entered into nationally and internationally have an unassailable legal basis. My party, and perhaps others as well, has received a number of e-mails about issues relating to the Helping Hands adoption agency. I was particularly struck by an e-mail from a woman who, with her husband, is part of a group of 20 couples that have been involved with the Vietnam adoption process for almost seven years. Their packs were in Vietnam when the adoption process was closed, and they have been advised that they will be among the first couples to be processed now that it has reopened. These couples will be travelling to Vietnam along with the approved and licensed mediation agency in this instance, which is the Helping Hands agency. This adoption agency has been working with Irish couples on Vietnamese adoptions for many years. It has a good knowledge of the process and a good relationship with the Vietnamese authorities. The director of the agency, Ms Sharon O'Driscoll, recently returned from Vietnam having travelled there to participate in the interview process required to secure her licence. All went well and she hopes to receive her licence in March.

Helping Hands was financed by the HSE until 2011, but it has not received any funding since then. The HSE had advised that it would reinstate the funding when Helping Hands was reaccredited. This happened last October but we have yet to see white smoke from the HSE. Helping Hands may have to close because its creditors and the Revenue Commissioners are demanding overdue payments.

Without the HSE funding, however, Helping Hands cannot pay its bills. The recent visit to Vietnam was paid for out of lottery funding and this was arranged by the office of the Minister for Children and Youth Affairs. In fairness to the Minister, Deputy Fitzgerald, I understand she has always supported the Helping Hands case and has worked in the past to move this issue forward.

Last year, a new agreement on adoption was announced between Ireland and Vietnam, and Helping Hands attended the announcement in Farmleigh. This received considerable media and television coverage in both Ireland and Vietnam. It will reflect badly in both Ireland and in Vietnam if, having gone through the process of audit, Helping Hands does not receive from the Irish Government the funding it requires in order to operate as an intermediary. This funding should be State-supplied, as per the Hague conditions. If this is privately funded, one gets into the area of business or adoption for profit, which is contrary to international adoption aims.

The situation for Helping Hands and the 100-plus couples who are registered with it is critical and will come to a head in the very near future. To offer a direct quote from the couple who contacted us: "We are so close to completing our long journey and do not want this delay to jeopardise the conclusion of our adoption". I understand the Minister for Children and Youth Affairs may be working towards a resolution of this and I hope the Minister of State, Deputy Costello, is in a position to indicate to us that real and achievable progress is imminent.

Minister of State at the Department of Foreign Affairs and Trade (Deputy Joe Costello)

I thank Deputy Ó Fearghaíl for raising this important issue. I apologise for the fact the Minister, Deputy Frances Fitzgerald, cannot be present. I have a tenuous relationship with the adoption process in Vietnam in that I met the authorities from Vietnam when they were here last year. I visited Vietnam subsequently on a trade mission and met them again in another capacity and discussed the adoption process, so I know they are extraordinarily happy that it has been put on a proper structured basis.

In September 2012 the Adoption Authority of Ireland, AAI, and the Vietnamese Central Authority for Adoption signed an administrative arrangement on intercountry adoption. This is a significant milestone as it is the first international administrative arrangement for intercountry adoption entered into by the AAI and the Socialist Republic of Vietnam since both countries ratified the Hague Convention. The AAI has accredited two agencies to perform activities in regard to facilitating adoptions from Vietnam. One of these organisations, the Helping Hands Adoption Mediation Agency, is now in the process of applying for licensing by the Vietnamese authorities as an accredited body for the purposes of intercountry adoption in Vietnam.

The appointment of accredited agencies to facilitate intercountry adoption is in line with the requirements of the Hague Convention. However, there is no stipulation in the Hague Convention that such bodies should be state-funded. The Guide to Good Practice No. 1 for the Hague Convention states:

It is reasonable to expect that payments will be necessary for both government and non-government services connected with intercountry adoptions. Both receiving States and States of origin are permitted to charge reasonable fees for services provided.

Guide No. 2 elaborates on the type of costs that prospective adopters can be charged and on the need for co-operation between states in order to develop this transparency and monitor it on an ongoing basis. It also states: "The prospective adoptive parents should, to the extent possible, pay for all expenses involved in the adoption, through the accredited body".

Historically, intercountry adoption has involved a substantial level of expenditure for prospective adoptive parents, mostly emanating in the sending country. The increased level of scrutiny of the adoption process and the professionalism demanded at all stages of the intercountry adoption process, as required by the Hague Convention, has understandably led to increased costs. The Adoption Act 2010 envisages a model that incorporates the use of accredited agencies in both the sending and receiving country. The AAI has to date accredited three agencies for the purposes of intercountry adoption and these agencies intend operating in a range of countries. The AAI has advised the Minister, Deputy Fitzgerald, that it is not its intention, in the short term, to accredit any more agencies for this purpose.

With this in mind, the AAI and the HSE, in co-operation with accredited agencies, are examining the costs related to intercountry adoption in Ireland. Initial indications are that fees outlined by accredited agencies are in line with international norms. The Minister will ensure that actions taken by all agencies involved in this process, both governmental and non-governmental, are monitored so as to ensure transparency and cost-effectiveness. This will serve to protect prospective adoptive parents and all involved in intercountry adoption but, most importantly, to ensure the safety and welfare of children at the centre of the intercountry adoption process.

Helping Hands has previously received a total of €400,000 in lottery funding from the Department of Health and Children - some €100,000 in 2008 and €300,000 in 2007. In addition, Helping Hands has received funding from the HSE since 2009 in the order of €782,000 - some €297,000 in 2009, €280,000 in 2010 and €205,170 in 2011. The Minister, Deputy Fitzgerald, has asked the HSE to make every effort to secure the position of Helping Hands in regard to the immediate issue of its activities in Vietnam. She has been informed by the HSE that it will meet Helping Hands later in the week with a view to resolving the issue.

The Department of Children and Youth Affairs is currently reviewing policy in regard to the funding of accredited agencies in conjunction with the AAI and the HSE. While accredited bodies are required to be not-for-profit organisations, it is open to them to charge reasonable amounts for services provided to applicants. A number of issues in regard to accredited agencies are being examined by the Department in consultation with the AAI and the HSE. However, no decision in regard to future funding of accredited agencies has been made.

Deputy Seán Ó Fearghaíl

I welcome the fact the HSE proposes to meet Helping Hands next week. However, I must say the Minister of State's response alarms me. The last thing we need to see happening in this country is that intercountry adoption becomes the sole preserve of those who are very well-off. Anyone who engages in an intercountry adoption, by virtue of the number of trips to the country of origin of the child and the degree of preparation that must go into this, incurs very significant cost in any case.

It is appropriate in all circumstances that there is a recognised and authorised mediation service and it is reasonable to expect that couples make some contribution towards that cost. However, it is absolutely unreasonable to expect that the entirety of the cost of the process, coupled with the cost of funding the mediation agencies that have been authorised by the State here and by the countries of origin of the children, would be picked up by the adoptive parents. I call on the Minister of State to bring this matter to the attention of the Minister for Children and Youth Affairs, who has had a long and genuine interest in this area. If we go down the road of forcing parents to cover the entirety of the substantial costs involved, intercountry adoption will inevitably become the preserve of the very wealthy. I do not believe that would be the objective of anyone in this House.

Deputy Joe Costello

I thank the Deputy. It is certainly not the intention of the Minister to have any discrimination in regard to the type of person or family that is engaged in adoption. Indeed, the idea that only wealthy families would be able to do this because of the danger of funding not coming forward was part of the reason the Hague Convention came into place. The convention sought to ensure adoption was not just for wealthy people and attempted to address possible irregularities in regard to wealthy people coming to countries and using their wealth for what might not be the proper purpose. It is an attempt to have absolutely transparent and clear structures in place.

The Minister has asked the HSE and the Adoption Authority of Ireland to look at the issue of funding. Let us not forget the funding was in place in 2011 but it then ceased because the whole process ceased until the negotiations were complete. We are now in a new process. Three agencies have been accredited and the HSE has been asked, with the AAI, to look at the funding going forward, which is being done at present.

I understand that the HSE is prepared to meet Helping Hands next week and the discussions and negotiations can take place.