Dáil Éireann díospóireacht -
Tuesday, 10 Feb 2015

Vol. 867 No. 1

Topical Issue Debate

Home Renovation Incentive Scheme Eligibility

Deputy Seán Ó Fearghaíl

I wish to raise the issue of dementia and home renovations. The recently published national dementia strategy acknowledges that most people with dementia live in their communities and wish to continue to do so. To do this they sometimes need to make adjustments to their homes and some issues arise. It is often deemed that those with dementia are unsuited to apply for a loan to fund necessary renovations in their houses and the adaptation grant is often inadequate. When a family care-giver funds adaptation renovations in the home of the person with dementia, the care-giver is unable to claim the tax back from the home renovation incentive scheme as he or she is not the home owner. In the case where the person with dementia has adequate funds to make renovations, he or she is often on a State pension and is, therefore, unable to claim the tax back. In that respect I request that the Minister review the policy to ensure that adequate financial support is given to ensure that people with dementia are enabled to remain in their homes.

Under the home improvement scheme, VAT on building work can usually be claimed back by home owners through the PAYE system. If the older person or the person with disabilities has funds to pay the cost of the building work not covered by the grant, he or she tends to be unable to claim the tax back through the home improvement scheme. This issue arises as these people tend not to pay tax through the PAYE system as they are usually unfit for work. In the case where the older person or person with a disability does not have funds to cover the cost of the building work not covered by the grant, the burden may be left to the family. If a member of the family is not the house owner, that person is ineligible to reclaim the VAT through the scheme.

I will give an example. Mrs. A has early onset dementia and her occupational therapist and the neurological team have advised that she has her house adapted. The cost of the work is €40,000, for example. Her daughter needs to live with her as the HSE provision for home help is inadequate to meet her daily needs. As her daughter works full-time, the household income of a full-time wage and Mrs. A's widow's pension decreases the percentage of works allocation through the adaptation grant. The family incur the cost of the building work which is not covered by the adaptation grant and they are ineligible to claim this money back from the home improvement scheme as they are not the home owners. Even if Mrs. A had the funds to pay for the cost not covered by the grant, she would be ineligible to claim the VAT back as she does not pay PAYE on her pension. On a separate note, the VAT payable for building works, which is not taken into consideration by the adaptation grant, which is approximately €5,000, needs to be paid to the builder before being eligible to claim it back through the aids and appliances scheme.

If the family, therefore, did not have the funds for this building, work could not take place in the first instance. These are the issues which are particularly pertinent. The home renovation scheme has worked very successfully. The Minister will agree with me on wanting to see something done for people who suffer with dementia, and we have an increasing number of such people in our society. I wonder whether the schemes can be amended in some way to meet the needs of the people to whom I have alluded.

Minister for Finance (Deputy Michael Noonan)

As the Deputy is aware, I introduced the home renovation incentive, HRI, in budget 2014. This scheme came into operation on 25 October 2013 and will run until 31 December 2015. The incentive provides tax relief for homeowners by way of a tax credit at 13.5% of qualifying expenditure incurred on repair, renovation or improvement work carried out on a principal private residence.

In the recent budget, I announced the extension of the home renovation incentive to rental properties whose owners are liable to income tax. The aim of the measure is to increase and improve housing supply at a time when there is strong demand for housing and insufficient supply in certain areas. The home renovation incentive has been very successful to date, with works on just over 15,900 homes notified to Revenue's online system as of 9 February 2015. This represents more than €328 million worth of works involving some 4,224 contractors. The incentive is generating significant employment in the tax-compliant construction sector and increasing sales in building supplies, hardware and related businesses.

Qualifying expenditure is that which is subject to the 13.5% VAT rate. The work must cost a minimum of €4,405 exclusive of VAT, at which level it would attract a credit of €595. Where the cost of the work exceeds €30,000 exclusive of VAT, a maximum credit of €4,050 will apply. The credit is payable over the two years following the year in which the work is paid for. The tax credit is only available to the homeowner and not to children or other individuals who may fund the works. However, there are other measures available to individuals or family members who may fund works in their parent's homes.

A housing adaptation grant for people with a disability is available from local authorities and provides grant aid to applicants to assist in the carrying out of works that are reasonably necessary for the purposes of rendering a house more suitable for the accommodation needs of a person with a disability. This grant can assist with changes and adaptations to a home, such as making it wheelchair accessible, extending it to create more space, adding a ground floor bathroom or toilet, or installing a stair lift. This grant can cover up to 95% of the cost of works carried out, which is far more generous than the relief available under the home renovation incentive.

If minor works are required, a means-tested mobility aids grant scheme is also available. This scheme provides grants for works designed to address mobility issues in the home, such as the purchase and installation of grab rails, access ramps, stair lifts or level access showers. This grant is primarily targeted at older people. Further details on both of these grants are available from local authorities.

Works which are grant-aided, such as the grants mentioned above, also qualify for the home renovation incentive. Three times the value of the grant is deducted from overall expenditure, with any remainder attracting the tax credit of 13.5%. This is to align with best fiscal practice in that relief is not provided twice for the same expenditure.

It is worth noting that the deduction in respect of grant-aided work is not taken into consideration for the purposes of reaching the minimum spend threshold of €4,405 excluding VAT. Full details of the scheme are available on Revenue's website, along with a comprehensive guide for homeowners which answers frequently asked questions and provides assistance to homeowners who may wish to avail of the incentive.

The Deputy may be interested to note that there is a provision for the refund of VAT incurred on qualifying goods for the exclusive use of disabled persons in the Value Added Tax (Refund of Tax) (No 15) Order 1981. The order specifies the degree of disability and defines the qualifying goods as goods which are aids or appliances, including parts and accessories, specially constructed or adapted for use by a disabled person. The order extends to works carried out on homes to adapt them to make them more accessible for disabled persons. The works can be paid for by family members. As the rate of relief provided under the HRI equates to the same amount of relief under this VAT refund, it is not necessary to include such works in the HRI.

If the Deputy has a specific person, or number of persons, in mind, the Value Added Tax (Refund of Tax) (No 15) Order 1981 can be accessed by a relative and provides the same relief at 13.5% for the work undertaken.

Deputy Seán Ó Fearghaíl

I appreciate the point the Minister made in conclusion and that the VAT can be reclaimed by a family member, but it is also the case that the elderly or disabled person must have the money in the first instance to pay the contractor. One of the difficulties for many of the people we meet who require these grants is they do not have adequate finance to make this payment in the first instance.

I commend what the Minister has done on the home renovation scheme, which has been positive with regard to what it has done for properties and generating employment, particularly for small builders throughout the country. I am aware of the use and the potential of the mobility scheme grants and the housing adaptation grants. I am simply stating to the Minister that there are plenty of situations in which the moneys required to adapt houses are in excess of the amount payable under these grants, particularly where people with dementia are concerned. People with dementia very often require a member of the family to be in residence on a full-time basis to support them. In these circumstances there is a dichotomy, in so far as the old person may not have the money to pay the charge up-front and recoup the VAT but the younger person is not the house owner and therefore cannot avail of the home renovation scheme. There should be sufficient flexibility, because I suspect the number of people who fall into this category is not inordinate. It could be extended somewhat so these schemes could be used together to the ultimate benefit of retaining a person with dementia in the community, where we know people with dementia want to be and where we know they can get the best quality care.

Deputy Michael Noonan

The home renovation scheme runs until the end of 2015. While I have no plans to renew it for a further year or two yet, we will review the position going into the budget, as we will do in all of these cases. In the course of this review I will take the Deputy's views into account.

Tax Code

Deputy Lucinda Creighton

I thank the Minister for taking this Topical Issue. I wish to raise the deeply uncompetitive environment which exists to encourage productive investment in Irish small and medium-sized enterprises, and the deeply unfair and inequitable taxation system in place for the self-employed. I genuinely believe most Irish people are not aware of the fact, and would be shocked if they knew, that an employee who earns €15,000 pays €285 in tax through PAYE, USC and PRSI whereas an employer, who has taken the risk to establish a company and all of the attendant stress and headache which goes with it, pays a total of €2,235 in taxation on the same amount of earnings. This is 684% more for the self-employed person on the exact same wage as the employee. Why is it that an employee earning €50,000 pays €14,585 in tax, while an employer pays €16,235 in taxation on the same earnings, which is 11% more? An employee on €100,000 pays €40,384 in tax whereas an employer who earns the same amount pays €42,034, which is 4% more. These are startling figures.

They send out a negative signal to the people we need to continue creating jobs and who we desperately need to grow their businesses and ensure a sustainable recovery for this country. It strikes me as quite perverse that we single out the self-employed, the people to whom politicians from all sides of this House pay lip-service on a daily basis. We talk about entrepreneurs, the need for entrepreneurship and the need for people to take a risk and go the extra mile to set up or develop a business, yet we are hitting them with punitive levels of tax. In some instances, a self-employed person pays 684% more in tax than a person who is their employee on the same wage level.

It is all very well to talk about the small business people and both Government parties did so to a significant extent in their respective manifestos before the last election, but neither party nor any other party in this House currently proposes to introduce any tax equity or tax fairness for small business people. Such a move would help them along the road and encourage them, and say to them that we do not think they are crooks and gangsters and fiddle the system but rather that we believe they are the sort of people we need in our society to create jobs and opportunities and develop our economy long into the future. I find it perplexing that the Government can claim that it supports entrepreneurs when our tax policy explicitly discriminates against them. We are exporting entrepreneurs and the people we need to invest in Irish small business. That is tragic. It is true of our jobs tax policy with PRSI and our investment policy with punitive levels of capital gains tax, which are totally out of kilter with the rest of the modern developed world. We are taxing families who want to help their children start businesses through capital acquisitions tax. It is really unfortunate and I look forward to hearing the Minister's response.

Deputy Michael Noonan

I thank the Deputy for raising this matter this afternoon. I recognise the key role that Irish small and medium-sized enterprises, SMEs, play in creating employment in our economy. SMEs account for almost two thirds of employment in the enterprise economy, and it is for that reason that I have introduced and extended a wide range of tax measures to encourage productive investment in SMEs and to promote the growth of small enterprises.

The Government has sought to diversify sources of investment for the SME sector and recognises that the tax system can play an important role in this regard. That is why I have expanded the employment and investment incentive, EII, which provides income tax relief on investments of up to €150,000 in SMEs, in successive budgets. In budget 2013, the incentive was extended until 2020 while in budget 2014, the incentive was removed from the high earners' restriction. In budget 2015, the incentive was further expanded to cover a greater array of businesses and permit companies to raise more capital. The level of investments made under this scheme is rising and it is expected that this trend will continue.

In budget 2014, I introduced the capital gains tax entrepreneurial relief, which provides CGT relief for serial entrepreneurs who use the gains from one investment to invest in a new firm. In the same budget, to improve access to non-bank funding for SMEs, I exempted transfers of shares for companies on the enterprise securities market of the Irish Stock Exchange from stamp duty. The latter provision is subject to EU state aid approval.

To further encourage entrepreneurship and ensure that new entrepreneurs can invest in their own start-ups, the seed capital scheme will be rebranded as StartUp Refunds for Entrepreneurs or SURE. As the Deputy may be aware, under this scheme, an employee who leaves PAYE employment may claim a refund of income tax already paid in respect of their investment in their new incorporated business. The information leaflets are being simplified and the scheme will be the subject of a marketing campaign to be undertaken by the local enterprise offices.

Corporation tax relief is available for new start-up companies in the first three years of trading. This allows new firms reinvest their profits into expanding their business. The relief was extended in the Finance Act 2014 for one year, and my Department is currently reviewing this scheme with a view to further improving its operation.

The measures I have outlined to the Deputy were designed to improve the tax environment for investment in small enterprises. I have introduced measures to assist SMEs in other ways in recent budgets. These measures include introducing the 9% rate of VAT for tourism-related services and abolishing employer PRSI on share-based remuneration as part as part of the jobs initiative in 2011; increasing the cash receipts basis threshold for VAT to €2 million in budget 2014; increasing the de minimis amount that can be retained by a close company without giving rise to a surcharge in budget 2013; enhancing and extending the foreign earnings deduction to new qualifying countries in budgets 2014 and 2015; introducing the start your own business initiative to assist entrepreneurs who have previously been long-term unemployed; introducing the home renovation incentive in budget 2013 to create economic activity which aids small construction companies; expanding the annual excise relief production ceiling for microbreweries; and removing the base-year restrictions on the research and development tax credit in budget 2015, which removed a significant administrative burden from all companies which use this incentive. I would also point out that Ireland has low rates of employer social insurance contributions when compared to our EU partners. As a result, the cost of hiring a new employee is one of the lowest in the European Union.

Tax reliefs and reductions constitute a loss forgone to the Exchequer. At a time when there is still a requirement to correct the public finances, I would suggest that we should continue to direct what are limited resources towards assisting entrepreneurs and small firms through focused tax reliefs.

I make the general point that companies invest when they anticipate that demand will increase in the future. As SMEs primarily supply the domestic market, they are particularly reliant on domestic demand. The income tax and universal social charge deductions introduced as part of budget 2015 will increase citizens' disposable income and correspondingly increase consumer spending in the domestic economy, encouraging SMEs to invest and expand. With a growing economy, increasing employment, expanding supports for entrepreneurs and a low corporation tax regime, I believe Ireland is a good place in which to set up a business.

Deputy Lucinda Creighton

I thank the Minister for his reply. I am aware of all the various schemes and many of them are extremely complex. Much of the feedback I have got from small businesses is that they are inaccessible or they do not qualify for them. There are a huge number of hurdles and obstacles to accessing many of the schemes the Minister mentioned.

I am glad he mentioned the 9% rate of VAT because it has been a successful policy decision of this Government and one I have supported. The Minister will recall that in advance of last year's budget I wrote to him and lobbied him in order to retain the 9% level. It demonstrates how very focused, targeted tax measures do work. My concern is that the very focused, targeted taxation measures have been focused very much on the construction and building sector during the past three to four years rather than the SME sector. Very simple changes could be made, which would not cost the Exchequer greatly but would make the environment for self-employed people much fairer.

I know these figures never find their way into Government press releases. We always hear about the foreign direct investment company that has created 20 or 50 jobs and there is almost a rush of Ministers to be there to cut the ribbon. The figures we do not hear about, but which I am certain the Minister is well aware of, are those from the Central Statistics Office, CSO, which in August 2014 showed that the number of self-employed people who employ others in their company has decreased. That is a very worrying trend at a time when there is so much emphasis on start-up companies and the need for new companies, which is obviously very important. The fact that the small and medium-sized enterprise sector is not employing the same number of people as it was in 2011 and that the number has dropped is a huge cause for concern. It goes against the trend of our having greater levels of employment in this State to see self-employed people being reduced to one-man operations because they cannot afford to retain staff. That is a massive cause for concern. I hope we are not papering over those cracks and that the Minister will deal with that and confront that very worrying trend.

Deputy Michael Noonan

I think everybody knows that the SME sector was under pressure as a result of the disastrous policies pursued by the Fianna Fáil and Green Party Government where the economy crashed. If GDP goes down by 20%, is it any surprise that the number of SMEs in the economy will go down as well and that there are closures? Some of the CSO figures to which the Deputy referred are historic and the SME sector is building up again.

I have given a lot of encouragement, through the tax system, to the SME sector. It does not involve just construction, but the tourism industry, farming, retail and smaller service industries such as software industries, IT companies and financial services. We have concentrated efforts right across the sectors. The difference between the growing economy now and the economy we had during the Celtic tiger is that the Celtic tiger economy was dependent on one sector, which involved building, development and speculation on building, and the taxes it generated. The latest set of statistics show that all sectors are now growing and contributing to the 5% growth in GDP in 2014. We will continue that policy.

I agree with the Deputy on one area, which is something we inherited. The introduction of the PAYE allowance in 1980, while well-justified through the 1980s, created a differential between those paying PAYE and the self-employed, and that differential needs to be examined when resources come to hand. I agree with the Deputy's analysis in that space. It is not something that was created by this Government or magnified by it, but it is something of which it is aware. I will take her views into account when we are preparing the next budget.

School Staff

Deputy Brendan Griffin

Gabhaim buíochas leis an gCeann Comhairle as ucht an deis an t-ábhar tábhachtach seo a phlé anseo inniu. Tá daoine i mo dháilcheantar buartha agus tá eagla orthu i dtaobh an ábhair seo. Tá muintir Chiarraí ag lorg athraithe ar an bpolasaí seo.

I thank the Leas-Cheann Comhairle for the opportunity to speak on this matter and the Minister for being present in the Chamber to discuss it with me. As someone who is in her first year in the job, I acknowledge that this is an issue she has inherited and is not a problem of her doing, but it is to be hoped it is something she will be able to address. The issue to which I refer is the threshold changes for small two, three and four-teacher schools, primarily in rural parts of the country. It was introduced in the 2012 budget at the end of 2011 and has seen the thresholds for two, three and four-teacher schools increase from 12 to 20, 49 to 56 and 81 to 86, respectively. In Gaeltacht areas the threshold has increased from 76 to 86, which is a very large jump. The problems being created as a result are causing major difficulties for children throughout the country who find themselves in much larger classes, sometimes in rooms with three, four or even five streams of 27, 28, 29 or 30 children.

I acknowledge that we have a problem with class sizes in Ireland in general. In urban areas it is not uncommon to have class sizes of more than 30 children with one teacher. That is now happening in rural areas, but to compound the problem there are three, four or five streams in many classrooms. Having spent a brief amount of time in the classroom, I would rather teach 35 children in one stream than 30 children across four or five streams. It is giving children, predominantly those in rural areas, a poorer start in life.

The real tragedy is that the changes have not resulted in a significant cash saving. The figures involved are quite low. According to a response to a parliamentary question I tabled, the amounts involved were about €2 million in 2012-2013 and €2 million or €2.5 million in 2013-2014. There may be a cumulative figure of more than €10 million over a number of years, but that does not take into account the long-term impact or the cost of keeping on the dole someone who would otherwise be in employment. This needs to be a priority for the Government. I appreciate this is an issue the Minister has inherited, but she has an opportunity to try to find a solution.

I have raised this matter consistently. I find myself in the Dáil again today and have spoken about this on the Topical Issues debate numerous times. I have raised the matter at committee level. Behind closed doors I have raised the matter at parliamentary party level. I have raised the matter directly, individually and privately with Minister and the Taoiseach.

Rural communities are suffering as a result of this. There may have been a case to be made in the past for clusters of small two-teacher schools, all of which were close to each other, with 12 or 13 pupils. There is a big difference between that and the situation I outlined, where there may be 55 children in a school which is isolated and amalgamation is not an option. Such schools may have two teachers with 25 or 30 pupils across multiple streams in two classrooms. With an improving economy and increased revenue coming in, this must be a priority we can address. It is something we need to tackle. We need to put our children first.

Minister for Education and Skills (Deputy Jan O'Sullivan)

I thank the Deputy for raising this issue, which he has raised, as he said, on a number of occasions. I am aware that a large public meeting on this topic took place in south Kerry last night, which was addressed by the president of the INTO and others. The Minister of State, Deputy Deenihan, has given me copies of the petition which was presented.

The Government recognises that small schools are an important part of the social fabric of rural communities. As someone who attended a small primary school, I am particularly aware of their significance to rural communities. Small schools will continue to be a feature of our education landscape. Somehow, we have to find a way to have an open conversation about how small schools, as well as other important social infrastructure, can be preserved and sustained in rural communities, in particular in isolated rural areas.

As part of the budget 2012 decisions, the number of pupils required to gain and retain a classroom teaching post in small primary schools was gradually increased between September 2012 and September 2014. The final phase of the budget measure took effect from September 2014, and no further changes were made as a result of the previous budget. That measure reflected the reality that small primary schools generally had better average class sizes than medium to large schools, and it has certainly put the staffing arrangements for small schools on a more sustainable basis when considered purely from the perspective of public finances.

For example, it was arguably never affordable to allocate a second teacher to a school with just 12 pupils, giving an average class size of just six pupils. That budget measure was applied to all small schools equally, irrespective of their location, ethos or language of instruction. An appeals process was put in place for small schools losing a teacher or that failed to gain an additional teacher as a result of the budget measures. I know that this appeal process was put in place after significant contacts between members of the House and my predecessor. This allowed small schools which were projecting increased enrolments in the coming September that would be sufficient to allow them to retain or gain a classroom post to submit an appeal to the Primary Staffing Appeals Board.

The staffing arrangements for the 2015-2016 school year, including the appeals process, will be published shortly. As I have mentioned, the budget which was passed by this House three months ago did not provide for any change to the staffing of small schools. My focus in budget 2015 was on obtaining the additional funding that was necessary to provide for demographic growth. For the first time in recent years, I was able to deliver an increased budget for education this year. That budget will allow us to recruit the 1,700 additional teachers, resource teachers and SNAs which our children need and deserve.

I was also able to secure the funding necessary to begin education inspections of early years settings, to reform the junior cycle and to continue funding the literacy and numeracy strategy which has delivered such great results for children throughout Ireland, but I could not secure the funding necessary for everything that Members of this House might have liked. That means I do not have additional funding to change the staffing of small schools or class sizes generally.

I also do not have additional funding to increase school capitation, restore guidance counsellors, invest more in higher education or any number of other pressing needs, but in the previous budget I did secure the first increase in recent years. I am determined to build on that again as part of budget 2016 and to see meaningful additional investments made to education spending. Of course, educational quality for pupils has to be the main criterion in any consideration of primary school size.

It is also necessary to consider the needs of local communities, along with wider social and cultural factors. How best to sustain provision for widely dispersed and small communities does present as a particular challenge.

In particular, we must look again at areas where school enrolment is declining but amalgamation cannot even be considered because there are no other similar schools nearby. That is of particular concern to Deputy Griffin.

A value for money review of small primary school provision has been conducted and I strongly believe it must be published to inform a reasonable and sensible discussion about how we can better support rural school communities. The review takes a comprehensive look at the many aspects of small schools, with the aim of providing useful evidence with which to inform future policy. I thank Deputy Griffin for raising the issue as I know he has a very strong concern in the area.

Deputy Brendan Griffin

I thank the Minister for her response and anything she can do would be much appreciated. There were 600 people at a meeting last night in Cahersiveen. As the Minister acknowledged, I have worked relentlessly on this issue for the past three years. It is ironic that some of the very same public representatives who aided and abetted in the complete destruction of this economy over the past decade are the same people who are now criticising Government Deputies like me for staying with the issue, working on it and being consistent in trying to find a change that will help rural communities. It is incredible and those people should have a good look in the mirror, consider their past and acknowledge what they are responsible for. They should bear some responsibility now and grow up. I want to keep working on this.

Parents and children are very worried. Every parent wants the very best start in life and opportunities for their child. There are large geographical areas throughout south Kerry where amalgamation will never be an option. There are schools fluctuating both above and below current thresholds which in many cases were comfortably above the thresholds. For a relatively small amount of money, the future of those communities and their schools can be safeguarded. I implore the Minister to do what she can into the future.

In counties like Kerry there are Gaeltacht schools that may be close to non-Gaeltacht schools, so such circumstances must be taken into account. The threshold changes were a very blunt instrument, as I pointed out many times. A one cap fits all approach does not work with small schools. We must put our heads together and find a fairer system that gives every child an opportunity and does not punish children for living in rural communities. I thank the Minister and ask her again to do everything possible with the issue.

Deputy Jan O'Sullivan

I acknowledge Deputy Griffin's particular concern. He has raised the matter many times and I am conscious there is a particular issue with widely-dispersed small communities. We obtained a limited increase in last year's budget, which creates difficulties for us with the various issues being proposed within education. I am certainly conscious of the issues involved in this, particularly the difficulties of isolated schools. We will also take note of the Gaeltacht school matter.

Hospital Services

Deputy Dessie Ellis

Cappagh hospital is a fantastic facility, with the best of staff, including nurses and surgeons. People who have availed of its services have nothing but praise for it, although there has been a 40% increase in the number of patients, coupled with a reduction in funding because of recent budgets, as well as a cessation of the funding from the National Treatment Purchase Fund. Increased funding in 2015 has been promised by the Minister, which should allow for more inpatient procedures. The opening of closed and under-utilised facilities should result in additional theatres, with approximately four theatres operating on a daily basis. That is urgently needed.

Recently, an orthopaedic surgeon told my colleague, Deputy Ó Caoláin, that the level of funding for the hospital has been nowhere near sufficient to look after people in a timely way. This lack of funding prevented a person from having a hip replacement that is urgently required. In response to a parliamentary question, the Minister for Health, Deputy Varadkar, indicated that the HSE has been engaging with Cappagh hospital and trying to identify ways to cut waiting lists and increase resources. He stated that additional funds would be made available in 2015 to open an additional 1.5 theatres per day. I would love to know the progress of this and if waiting lists will demonstrate a real decrease with this funding.

At the end of January 686 patients were awaiting knee surgery, with 100 waiting between nine and 12 months and a further 70 more than a year. I have some examples from my own area, although I am sure there are myriad examples throughout the country. A 76 year-old constituent lives with her husband, who has Parkinson's disease and dementia, and she has been waiting two years for a back operation. It has been on an urgent list since 18 March 2014. On 5 September, the person was brought in for the pre-operation process. This woman is confined to her home and has the added problem of caring for her husband, who is reliant on her support.

There is a second case of a 50 year-old man, married with three children, who has psoriatic arthritis, a chronic disease characterised by a form of inflammation of the skin and joints which can cause inflammation of the spine as well as tendons, cartilage, eyes, lung lining and, rarely, the aorta. He was referred to Cappagh hospital from Blanchardstown in February 2014, one year ago. He had his tendons done in Blanchardstown more than 18 months ago and he needs his hands straightened and fused. This should have been done shortly after his tendons had been done. An assessment form was sent to him only a month ago and he still has no indication of when this procedure will be carried out. His quality of life has been destroyed, as well as his ability to work or even play with his children.

I have a third case of a 79 year-old woman who has been housebound because she needs a replacement knee. She has been waiting for three years in total, with no quality of life. A recent response to a parliamentary question on 16 December was sent to her family. It indicated that Cappagh hospital has confirmed that the woman was referred to the Mater and placed on the inpatient waiting list for Cappagh hospital for 2 April. This means she is eight months on the inpatient waiting list, and only patients waiting 14 months or longer are being treated. Cappagh hospital further stated that urgent patients continue to be prioritised, and it has advised that due to a strict chronological booking policy, all patients attending the hospital are being offered dates for a waiting time for surgery, with due regard to clinical categorisation.

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

I thank the Deputy for raising this issue, which is not unique to Cappagh hospital or the Dublin area. I am taking this matter on behalf of the Minister for Health who, unfortunately, is out of the country.

The Minister for Health briefed the House on Cappagh hospital's operating theatres in November last year. Cappagh National Orthopaedic Hospital is one of the major elective orthopaedic facilities in Ireland, providing a national secondary and tertiary referral service for orthopaedic care for both adults and children. The Minister met representatives from Cappagh late last year to discuss the issues faced by the hospital. As a result of the increase in the number of overall patient referrals, a reduced budget, cessation of funding from the National Treatment Purchase Fund and a reduction in private income, there was a reduction in the surgical capability of the hospital. Although Cappagh hospital has a total of seven operating theatres and there were sufficient consultant staff available to provide services to meet demand requirements, not all theatres were in use in 2014.

It is of note that, at the end of 2014, overall staffing levels at Cappagh hospital were not significantly less than they were in 2008. There were approximately 330 whole-time equivalents, WTEs, in 2014 compared with 328 WTEs in 2008. The number of nursing WTEs fell slightly between 2008 and 2014, from approximately 124 to 123, the number of medical and dental WTEs increased from 36 to approximately 43 and is at its highest level since 2008.

However, in 2014, Cappagh hospital experienced an unprecedented increase of approximately 40% in demand for inpatient treatment, a level of increase that was not observed in other sites.

I am pleased to inform the Deputy that further funding of €800,000 was provided in late 2014, which allowed Cappagh National Orthopaedic Hospital to undertake additional workload. Furthermore, the HSE, through its 2015 budget allocation process, has also provided Cappagh hospital with additional resources of €4 million over its 2014 allocation to allow for an increase in inpatient procedures. The 2015 budget allocation process has also provided for the opening of closed and under-utilised capacity at Cappagh hospital. This will enable the opening of an additional 1.5 theatres per day, bringing the total number of theatres open to four, which will allow Cappagh to increase activity levels and to address significantly its current waiting list breach volumes.

In 2015, the HSE will continue to engage with the hospital regarding its budget and to explore mechanisms to ensure optimal use of resources, including theatre capacity, at the hospital within the overall resources available to the acute sector. The Deputy will also be aware that Cappagh hospital is part of the Ireland east hospital group, which includes Mater Misericordiae University Hospital, St. Vincent's University Hospital, Midland Regional Hospital Mullingar, St. Luke's General Hospital, Kilkenny, Wexford General Hospital, the National Maternity Hospital, Holles Street, Our Lady's Hospital, Navan, St. Colmcille's Hospital, St. Michael's Hospital, Dún Laoghaire, and the Royal Victoria Eye and Ear Hospital. I am also confident that there will be a structured integration of Cappagh hospital into the Ireland east hospital group in 2015 and that this will provide opportunities and support for Cappagh hospital in managing demand and delivering high-quality, safe patient care in a cost-effective manner.

Deputy Dessie Ellis

Cappagh hospital is located not far from where I live and it has been an iconic facility for many years. Undoubtedly, there is an urgent need to address these waiting lists, as well as the under-staffing. Although the Minister of State said the staffing levels did not change much, there was a 40% increase in demand last year. In addition, a number of people are due to retire in the coming year, so both problems will have to be addressed. I hope the Minister will do that.

It is good to hear that extra funding is being provided, but the reality is that there will be four theatres operating when there should be seven. It is a shame on us that the capacity of seven theatres, or close to that, has not been reached. That is the reason 79 year-old people are waiting for hip and other replacements. Many very elderly people are waiting 12 months for surgery. I do not know to what level this will cut the waiting list, but I hope it will be cut considerably.

We should be taking account of the age of these people. The woman I discussed earlier cannot even go outside the door. Her husband has dementia and she cannot walk, but she has been told she might have to wait another three or four months. It is outrageous. There must be humanity in how things are judged. People are put on a list and it is judged by the time on the list, but account is not taken of the fact that this woman is elderly or that she has to deal with external circumstances. I hope we can address this better.

I have been hearing that the nursing situation is far more serious than the Minister of State says. The number of staff must be addressed. Obviously, we could also do with more surgeons and physicians, but there is no indication that this will be dealt with as well.

Deputy Kathleen Lynch

There is no doubt that the circumstances in which the country finds itself are not ideal. I realise somebody else got into trouble for saying this, but I believe we have made significant progress, even in terms of additional revenue being allocated to the health service. The things that happened should not have happened and the consequence is that we have developed waiting lists for people such as the lady the Deputy mentioned. I am sure that when orthopaedic surgeons, or any other surgeons, general practitioners or nurse managers, look at a person's circumstances, they do not just concentrate on the pain and that they take all other issues into account.

The Minister for Health and I have discussed this virtually every week and it is our intention that the long waiters, the people who have been waiting more than 12 months, must be catered for. I have met many surgeons in my area in Cork. They tell me that the circumstances are such that by the time they get to see eight new patients per week, that is a significant number in the context of the return visits, patients who must be managed, theatre time and so forth, six of them will be recommended for immediate surgery. There are issues with orthopaedics that we must confront and on which we must concentrate. The difficulty is, as the Deputy knows, that as soon as we get that area resolved, another area will emerge. It is always about the prioritisation.

The additional money for Cappagh hospital this year will help. I have never been one of those who say that consultant surgeons do not work hard enough. My personal experience is that they work extraordinarily hard and long hours. They generally are not people who shy away from work. With the extra theatres open and the additional money, I am very hopeful that the Deputy will see an improvement in the waiting times experienced by the people he represents.