I move:
That Seanad Éireann approves the following Regulations in draft —
Health Contributions (Yearly Reckonable Income) (Variation) Regulations, 1982
a copy of which Regulations in draft was laid before the House on 18 March, 1982.
Health Contributions (Yearly Reckonable Income) (Variation) Regulations, 1982: Motion.
Subsection (3) of section 9 of the Health Contributions Act, 1979, provides that the Minister for Health may, by regulations, vary the income ceiling level which, taken in conjunction with the rate of health contributions applicable, determines the maximum amounts of contributions payable in respect of an individual in any particular contribution year. Subsection (5) of section 9 of the Act of 1979 requires that a draft of the proposed regulations shall be laid before each House of the Oireachtas and that the regulations shall not be made until a resolution approving of the draft regulations has been passed by each House. The draft regulations now before the House deal with the income ceiling which, it is proposed, shall apply in relation to the contribution year commencing on 6 April 1982.
The proposed new income ceiling is £9,500. This will apply to the contribution year commencing 6 April 1982. This ceiling of £9,500 is the same as that specified in the Social Welfare Bill, 1982, which we have already discussed. In addition the income ceiling for eligibility for health services is being raised to £9,500 from 1 June. This will ensure that persons whose income was over £8,500 and below £9,500 in the year ending 5 April 1982 will for the coming year be entitled to free hospital consultant services in a public ward. This will retain eligibility for people in this category.
The reason for the later date of 1 June arises from the need to produce evidence of income when claiming entitlement. The usual evidence required in the case of employed persons is the form p.60 issued by employers. This is not usually available until late April or May.
However, the later date is to the general advantage of applicants as their eligibility during the months of April and May 1982 will depend on their income for the previous year which ended on 5 April 1981.
All persons are now entitled to free hospital in-patient services in a public ward and to free out-patient services. Those who had incomes of £9,500 or more in the year ending 5 April 1982 will be liable to pay the consultants' fees.
The original ceiling level specified in the Health Contributions Act, 1979, was £5,000. This was varied to £5,500 before income related health contributions came into operation on 6 April 1979. The latter sum was varied to £7,000 under regulations approved by both Houses of the Oireachtas in March 1980 and applied to the contribution year commencing on 6 April, 1980. This ceiling was increased again in 1981 to £8,500 with effect from 6 April 1981.
For the purposes of collection of health contributions, income is divided into three streams:
—Income which is liable for income tax under the PAYE system and which is derived from insurable employment;
—Income which is liable for income tax under the PAYE system but which is not derived from insurable employment;
—Income which does not fall within the previous categories such as income from farming, the income of self-employed persons and investment income.
The collection of health contributions from employees is integrated with the administrative machinery for the collection of pay-related social insurance contributions and redundancy contributions through the PAYE tax system.
It is therefore necessary that the ceiling levels for social insurance, redundancy and health contributions should be identical. Otherwise the operation of the collection system would be more costly and far more cumbersome. In particular, the co-ordinated arrangements facilitate employers in the administrative processes involved at their end.
The collection of health contributions from individuals with income which is liable for income tax but which is not derived from insurable employment is arranged through the tax collection system. The collection of health contributions in respect of income derived from farming is administered by health boards. Taking into account the present situation in farming income the multiplier which is used by health boards in the notional assessment of income for health contributions purposes will remain unaltered for the contribution year 1982-83 at 117.
It is estimated that raising the ceiling level from £8,500 to £9,500 will result in an increase in-the amount of contributions to be collected of approximately £2,000,000 in the contribution year 1982-83. Of the estimated additional income about £200,000 should arise in the calendar year 1982. The remainder of the additional yield should be paid over in the first quarter of 1983. This position arises simply because most contributors with incomes under £9,500 will not have paid over their maximum contribution by the end of 1982. These represent by far the greatest proportion of income earners.
As I have already mentioned, the purpose of the draft regulations is to fix the upper limit of income in relation to which the amount of the health contributions payable in respect of any one individual in the contribution year commencing 6 April 1982, will be determined. I now ask the House to approve of the Health Contributions (Yearly Reckonable Income) (Variation) Regulations, 1982 in draft.
On behalf of Fine Gael Members, I express support for this motion. It conforms with the general wish on all sides of the House that the health contributions and, indeed, the eligibility levels under the various schemes covered and mentioned by the Minister in his contribution should be reviewed periodically.
I appreciate that the establishment of a level for the health regulations leaves the Minister in somewhat of a dilemma because, as he quite clearly points out, it is necessary to have the social insurance redundancy and the health contributions at the same level. Therefore, because quite considerable cost arises in respect of any extra contribution — in this case there is an increase from £8,500 to £9,500 — one is slow to recommend that the figure should be higher.
I do not know if it is absolutely legally necessary that the question of eligibility for free hospital consultancy services should be at precisely the same level. The Minister might inform me of that. I recognise that it is now at the same level and it is proposed to keep it at the same level. The contribution should continue up to and including £9,500 and the person whose income is over £8,500 and below £9,500 will now be eligible, as a result of this legislation, for free hospital consultancy services. Is there automatically a tie in between those two figures? For example, would it have been open to the Minister to say that everybody below £10,000 would be entitled to free hospital consultancy services even though they would not have paid any health contribution in respect of the last £500 of their income? I say this because we must recognise that in the last 12 months there has been an increase in salary of 11.7 per cent, which represents the amount of the increase from £8,500 to £9,500. If we are limiting the people who are now eligible for free hospital consultancy services to those who will have earned £9,500 up to April, 1982, there will be a certain number of people who were just below the limit of £8,500 and who because of the rate of increase in salaries in respect of that year will now in the following year fall out of the category entitled to free hospital consultancy services.
We got into serious difficulty a number of years ago with regard to that and the restoration of something like a satisfactory situation required great effort, great political skill of negotiation with hospital consultants and with various other interested parties. It took up a considerable amount of time of successive Minister of Health. I would, therefore, like the Minister to inform me if it is automatic that the £9,500 will also apply to the hospital consultancy services and if he recognises that, by increasing the limit by only 11.7 per cent, the number of people covered by free hospital consultancy services is likely to be less as a result of limiting the increase from £8,500 to £9,500.
I believe what I have said is correct. If it is, the number of people who will be covered by free hospital consultancy services will reduce. I am not sure that is such a good thing. Successive Ministers had to pay such a large political price to expand the service to the level to which it has been expanded now, in the face of considerable opposition from those with legitimate interests in this area, that I would not like this advantage to be wasted through an inadequate increase year by year. In general I would like to welcome the motion and to say we will be supporting the draft regulations.
The limit is part of the budget undertakings, so that I was not really in a position to vary one way or another at this point in time. It is all tied in with the total package.
With regard to the question of having the £9,500 here, I think the Senator accepts the administrative necessity there in relation to the social welfare contribution, the PRSI. As far as eligibility is concerned, legally there would not be anything to prevent them from being different. However, administratively, it would cause a fair deal of confusion. The general intention is that roughly the same number of people will continue to be eligible. If it is found that there is any significant departure from that, it is something we will have to consider. The initial intention is that approximately the same number will be eligible.
Salaries have increased.
From year to year that position changes somewhat. In some years some people would go in, in others some will come out. It still varies about a point. You cannot be over specific about the exact point.
Question put and agreed to.