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Seanad Éireann díospóireacht -
Tuesday, 24 Nov 2015

Vol. 243 No. 10

Commencement Matters

Tax Credits

I welcome the Minister of State.

I also thank the Minister of State for coming to the House to take this Commencement matter which concerns the need for the Minister for Finance to outline the current position on the home carer tax credit, the number of people in receipt of same and if there are plans to reform it. As the Minister of State is probably aware, the home carer tax credit is outlined as being available to a spouse in a family with one earner who is caring in the home for a child eligible to receive child benefit or for an aged or disabled person. The tax credit has been increased to €1,000 in budget 2016.

At a public meeting I held on the matter of taxation I found that a great many people were unaware of this tax credit, even where it applied directly to their situation. It is clear that a potentially high number of people are missing out on this tax credit. It is also clear that there is still a distinct lack of knowledge among the general public of its existence, its broad application and how it can be availed of. Therefore, I ask the Minister of State how many are in receipt of it and if there are plans to continue it in future budgets.

I thank the Senator for raising what is quite an important issue. It is interesting that she said the issue of lack of awareness was highlighted at public meetings. It is good, therefore, that it is receiving an airing and if even one person picks up on it, that will be positive.

The home carer tax credit is a tax support which may be claimed by a married couple or civil partners where one spouse or civil partner, the home carer, cares for one or more dependent persons. For this purpose, dependent persons include dependent children, the elderly or an incapacitated person. The credit, then the home carer's allowance, was introduced to the tax code in 2000 in the context of the move towards the individualisation of the income tax system which limited the transferability of standard tax bands between spouses. The allowance was introduced to acknowledge the choice families made where one spouse stayed at home to care for children or the elderly. In 2013, the most recent year for which complete data are available, Revenue records indicate that the credit was claimed by approximately 82,500 families at a cost to the Exchequer of approximately €61.9 million. That is one of the figures for which the Senator asked. It is interesting that more than 80,000 families are in receipt of the payment.

The Senator may be aware that the Minister for Finance, Deputy Michael Noonan, has enhanced the home carer tax credit in budget 2016. The current value of the credit is €810 per year. This will increase by €190 to €1,000 with effect from 2016. The credit is available primarily to single income families, but the home carer is allowed to earn a certain amount of income before the credit is withdrawn.

Once the home carer's income increases above this threshold, the credit tapers off at a rate of €1 for every €2 earned. In this respect, a further enhancement to the credit introduced in budget 2016 intended specifically to be of benefit to lower-income families is an increase in the home carer's income threshold from €5,080 to €7,200, which is quite significant. This will allow the home carer to earn up to €7,200 in 2016 before the credit begins to taper out. It will fully taper out once the home carer's income reaches €9,200. This measure will be of specific benefit to lower-income families as, under the terms of the credit, a family may elect to claim either the home carer credit or the increased standard rate band for two-income families, but not both.

With regard to the numbers availing of the credit, it should be noted that the Revenue Commissioners have for a number of years taken steps to automatically allow the credit without the person having to make a claim, wherever possible. For example, Revenue uses data it receives from the Department of Social Protection on child benefit, together with other data from its own records, to automatically grant the credit each year in the tax credit certificates of PAYE taxpayers. I am advised that Revenue gave the relief automatically to approximately 81,000 taxpayers on this basis in 2015. This is one of the positive changes within the Department of Social Protection and Revenue whereby these are automatically done and do not need to be claimed in the first instance. Revenue also pre-populates the annual tax returns of self-assessed taxpayers with the home carer tax credit where it was claimed in the previous year.

Information with regard to the increase in the home carer's tax credit announced in budget 2016 is included in Revenue's budget summary leaflet published on its website. The Revenue Commissioners also produce a leaflet, available at their offices or on their website, giving details of the credit and how to claim it, and a number of illustrative worked examples.

The Minister, Deputy Noonan, has no further plans to change the home carer's credit at this time, as the budget 2016 enhancements to the credit will need to be incorporated into the system before further amendments are contemplated. Subject to completing the legislative process, the budget 2016 enhancements to the credit will come into effect from 2016. I thank the Senator for raising the issue.

I thank the Minister of State for the reply, which is adequate and answered what I asked. On a positive note, I know the figure we have is from 2013, but it states that in 2015, the Revenue relief automatically applied to 81,000 and previously in 2013 some 82,500 families availed of it. Clearly, only a very small number of people do not have to actively look for it. It would be interesting to know how many families are entitled to it but are not aware of it. It is a helpful answer and I appreciate the Minister of State coming to the House to give it to me.

The figures the Senator has brought out publicly are useful. Some 82,500 families are receiving €61.9 million. One of the benefits of the joined-up thinking with the Department of Social Protection and Revenue operating together is to ensure the maximum number of people receive that benefit without having to go through the process of claiming. The figures show clearly how efficiently it is being administrated. There is no harm in highlighting the issue. I am sure a number of families are not aware of it and are not claiming it. I thank the Senator for highlighting the issue.

Family Law Cases

I thank the Minister of State for coming to the House to deal with this important matter. In September the Department of Justice and Equality announced that it was of the opinion that there was no need for a referendum in order to establish a system of specialist family law courts and rather it could be done by legislation. What is the timeframe for dealing with that legislation?

Despite recent positive developments, such as the reporting of family law cases, the Minister will be aware there remains disquiet about the operation of the current system. This disquiet arises on a number of fronts, one being the fragmented nature of the system. There are three courts - the District Court, the Circuit Court and the High Court - hearing various aspects relating to family law. In addition, there are long delays getting the most basic applications heard. The result of such delays is that if a person does not have his or her case heard by the judge on the day it is listed, he or she could be waiting months for it to be heard. To put it simply, there are not enough sittings to deal with these cases.

Will the Minister of State give a commitment that the system envisaged will be one where specialist judges will sit and listen only to family law matters and that they will sit regularly? There is little point in taking judges from the existing system where they are overloaded with work as matters stand. There is no requirement for judges who hear family law matters to have any specialist knowledge in the area. It is also the case that family law matters are often heard at the end of a busy day on which other legal matters have been dealt with. This means family law litigants are forced to sit around courthouses hoping that their cases will be heard. While I accept this practice is out of a wish to grant as much privacy as possible to the parties, it is far from ideal. I do not need to go into the other shortcomings of the current system because I know the Minister of State is aware of them.

The Minister of State will also be aware of the varying stories about the perceived gender bias that is supposed to operate in the family law courts. In light of the passing of the marriage equality referendum, I ask that the perception of a more gender-neutral attitude would emerge in family law matters. Now that children of married same-sex partners can be the subject of court orders, it is hoped that the best interests of the child, and only that, will be the overriding consideration. Of course, the introduction of specialist courts and trained judges would also go a long way towards eroding this perception.

I commend the Minister, Deputy Fitzgerald, on the work she has done in reforming the system. I know she shares the concerns of citizens that our system of family law is not as it should be. I ask the Minister of State, Deputy Kevin Humphreys, to provide some assurance that the reform of the system is ongoing by providing an update to the House on the proposed introduction of the specialist family law courts and by indicating where that legislation currently stands.

I apologise on behalf of the Minister, Deputy Fitzgerald, who is unavailable to be here to take this matter. However, the issue is very close to her heart and is getting her fullest attention.

I take this opportunity to inform the House of developments in regard to the establishment of specialist family courts. As the Senator is aware, the programme for Government contains a commitment to establish a dedicated family court. While it was originally anticipated that a referendum to amend Article 34 of the Constitution would be required in order to remove any constitutional obstacle to the establishment of a separate family court, it appears from more recent examination of the issues that it will be possible to proceed with the establishment of the court in a manner which does not require such a referendum, which is very positive news. This could be achieved by establishing the court as a separate division within existing court structures. The Department of Justice and Equality is currently finalising proposals for future legislation based on submissions which have been received in regard to the family court and ongoing consultations with interested parties.

I wish to outline in general terms the principle features of the proposed family court system. A district family court, a circuit family court and a family high court will be established as divisions of the existing courts. It is envisaged that judges will be appointed full-time to the District Family Court and the Circuit Family Court. In the case of the family high court, it is anticipated there would not be sufficient case loads to warrant the appointment of judges full-time to family law matters. Therefore, judges of the family high court will also be able to hear other cases. The judges appointed to the family courts will be selected on the basis of their training, experience and expertise in dealing with family law matters.

The new legislation will include a set of guiding principles that will apply to all family law proceedings. These guiding principles will underline the importance of encouraging and facilitating, as far as possible, the resolution of disputes by means of alternative resolution methods, including mediation, which provide an opportunity for a less adversarial, less argumentative, less stressful and less costly resolution of disputes.

The Minister intends to bring the proposals to establish the new family courts to Government as soon as they are finalised. She intends, at that point, to refer the draft general scheme of the legislation to the Joint Committee on Justice, Defence and Equality for the usual pre-legislative scrutiny conducted prior to the formal drafting of the Bill. Once again, on behalf of the Minister, I thank Senator Naughton for raising this issue.

I thank the Minister of State for his comprehensive reply. We all know that anyone who enters the family law system does so as an option of last resort. I welcome, in particular, the commitment given that judges will be appointed full time to the District Court and Circuit Family Court which is a positive step forward. I also welcome the commitment to facilitate, as far as possible, the resolution of disputes by means of alternative solution methods. I look forward to the legislation passing through the various Stages in the House.

I thank the Senator for raising the issue. For the information of the House, I wish to confirm that the groundbreaking Child and Family Relationships Act was enacted earlier this year and is due to be commenced in the coming weeks which I am sure will be of interest to this House. It will better protect children and their families for decades to come. It also contributes to giving meaningful effect to the now constitutionally enshrined principle of the child's best interests and right to be heard which often was not automatically done in the courts in terms of looking at these cases. I think there is a need for specialisation for judges in terms of lower courts. The Minister is fully committed to doing so, as quickly as possible, and to getting the legislation to the Joint Committee on Justice, Defence and Equality for proper pre-legislative scrutiny. I hope to see the legislation enacted as soon as possible next year.

Universal Health Insurance

I welcome the Minister for Health to the House to discuss the third motion which was tabled by Senator Bradford.

I welcome the Minister to the House and thank him for coming in here to respond to my query on the plans or otherwise for universal health care insurance. I am sure he has responded to this matter in the Dáil and, if not, I am sure he will do so over the next couple of days. Of course, he has taken some media queries on the subject but it is useful that we avail of this opportunity for a brief exchange of views in the Upper House and I thank him for bringing some realism to the debate.

Everybody wishes that a magic wand could somehow be waved by a Minister and the Government in order that we would be in a position to put in place a perfect health care system and a perfect system for funding such care. Unfortunately, that is easier said than done. As long as I have been a Member of this House and the other House, the provision and payment or subsidising of health care has always been on the agenda. The matter has never been fully addressed and certainly not fully responded to.

It could be said, that over the course of the term of one Government or even two, it is possibly not easy to put in place a long-term system of health care delivery and funding. Therefore, we must think about what should happen beyond the lifetime of one, two or three Governments but start from a position of certainty.

Having had lengthy discussions here and elsewhere about Canadian, Dutch, Australian and every sort of model of health care provision, perhaps our new starting point must be to improve the current system, its funding, structures and delivery of service. Everybody concedes that once people access the health service in this country, notwithstanding the enormous challenges it is faced with, a very good service is delivered to the vast majority of citizens. The problem appears to be access and bed provision among other matters.

We must first address the improvement of the current system.

Reinventing the wheel is fine. It has been tried by many Ministers and many Governments but it does not seem to have worked. If the Minister has brought the first phase of thinking on a universal health insurance to a conclusion, at least we know what is the new starting point. If I was lucky enough to hold the Taoiseach's position, I would say the same. He outlined last week that other possible methodologies of funding universal health care will be examined by the Government and the ESRI. No matter what report is produced, it will find that such a scheme will be very expensive. The days of expecting an insurance premium of €300 or €400 per person to cover universal health provision are long gone. The Minister was correct in pointing out last week that the concept of asking people to pay €2,000 or €2,500 for what would possibly be a basic cover package was not acceptable or politically expedient. I am interested to hear where the Minister thinks we should move next.

Everybody cheers about the concept of universal health insurance and the concept of universal health care itself but it must be funded. We are at a stage where we have to be realistic. The Minister and his colleagues in government are fortunate to be in a position where nobody expects miracles. Everybody must be realistic enough to know that health care is hugely expensive and there is no easy funding mechanism. We should look at all the options and everything should be on the table. However, at this stage, there is no point in tying ourselves into a universal health care insurance model as originally construed five or six years ago because, clearly, it does not appear to add up. I recall having discussions with the former Tánaiste and Minister for Health, Mary Harney, on the matter at a time when the political party of which I was a member was strongly advocating the Dutch health model and she strongly advised me of her dialogue with the Dutch health department and Ministers who were trying to move away from the scheme. I was always uneasy that we were going to introduce what we thought was the perfect system from a country which was already losing faith in that particular funding mechanism.

We have a blank sheet to work with to see how the present system can be funded better, administered better and work better. The glass is half full. On the whole, the people in the service do a very good job. A huge amount of work is done in the health service. We rightly hear of the hard cases, the people on the trolleys and the waiting lists. We must rid the system of those trolleys and waiting lists but I appreciate it is not easy.

I look forward to the Minister's initial observations on the future funding models and, perhaps, his broader plans. We cannot afford to be fixated on the concept of universal health insurance. It has been examined and people bought into it in good faith. It is not a sin to admit it was an impossible target to achieve and to look at other models both of a care provision and a care funding scenario.

I thank Senator Bradford for raising this issue and for giving me an opportunity to address the Seanad on this matter. I spoke on it in the Dáil last week. The Government is committed to a major programme of health reform, the aim of which is to implement universal health care in Ireland. This means timely access for everyone to effective, quality, affordable health services.

In April 2014, the White Paper on Universal Health Insurance was published. It proposed a competitive, multi-payer model of compulsory universal health insurance as the means to achieve universal health care. Following its publication, the Department of Health initiated a major costing project, involving the ESRI, the Health Insurance Authority and others, to examine the cost implications of a change to the model of UHI proposed in the White Paper. This initial costing project has now been completed and the underlying reports by the ESRI and KPMG, on behalf of the Health Insurance Authority, were published last week.

The analysis finds that the introduction of the White Paper model of UHI is likely to increase health care expenditure, with additional costs arising as a result of addressing unmet need for health care and the high transactional costs of operating in an insured environment.

The high Exchequer subsidies and individual premiums that would be required to fund this model are not acceptable either now and nor would they be at any time in the future. The reports essentially support the Government decision not to rush the implementation of universal health insurance in advance of this costing exercise. It is also clear that there is a need for further research and cost modelling on the best means to achieve universal health care. I have decided, therefore, that the next phases in the costing exercise will include a deeper exploration of meeting the cost of unmet need for health care and a more detailed comparative analysis of relative costs and benefits of alternative funding models, both single and multi-payer.

The introduction of universal health care represents the most fundamental change in our health service in the history of the State. We have already introduced the first phases, with GP care without fees or a means test for the youngest and oldest in our society. The latter came into effect during summer. It is vital that before deciding on which funding model to adopt, key building blocks are put in place to provide a solid foundation for universal health care. I have already signalled my commitment to pushing ahead with these key important reforms.

The reforms include putting in place sufficient capacity to satisfy unmet demand in terms of specialists, critical care beds and other infrastructure because a system without adequate capacity will always result in waiting lists and rationing, no matter how it is structured. We need to strengthen primary and social care, which includes the further phased extension of GP care without fees and the improved management of chronic disease. We need to put in place reformed structures to replace the HSE, including hospital groups and community health care organisations. These are now established on an administrative basis, although we still have to appoint all the boards of the hospital groups and put them on a statutory footing. We need to implement financial reforms, including a more efficient activity-based funding model. Some people prefer to term this "money following the patient". The conversion year for the model is 2016. We also need to implement the Healthy Ireland programme and drive forward new patient safety measures. This will reduce the cost of health care in the long term and improve public health.

As well as representing major milestones on the road to universal health care, these are important initiatives in their own right with the potential to drive performance improvement and deliver significant benefits in terms of timely access to high quality health care for all the people of Ireland.

I thank the Minister for his reply. The five points on which he is trying to make progress are a significant part of his contribution this afternoon and I wish him well on advancing those necessary improvements. We could end up being fixated on the concept of what we frame as universal health care and universal health insurance to fund it. In Britain, for example, there is what is supposed to be universal health care, also known as the NHS. It is probably not working as well as it did 20 or 30 years ago. The majority of citizens in this country, by way of the GMS medical card-public health care system, had a degree of universal health care. Tags, titles and framework names about our health service is not really where we must go. We must go into the provision of those five priorities identified by the Minister and others. We must concentrate on them. My question concerned universal health insurance, notwithstanding the view that I and many other people share that it may well be financially unaffordable.

When will the Minister get the next range of reports on the matter? Will he then be in a position to indicate whether an entirely new funding model is required? We cannot keep kicking the can down the road. The citizen is demanding a health service. How we frame it or the title we give it are not particularly important. When does the Minister expect the next range of apparent funding mechanisms to be brought forward? It would be better if we could concede the old concept is simply not going to happen and move onto new ideas and approaches.

The Senator raised a few points. He touched on some of the issues, including whether to have a Dutch, Canadian or, as he mentioned, British model. Whatever we do, we need to have an Irish model because everyone's model of health care is different. Whatever we do will have to suit our circumstances and needs and have regard to the point from which we are coming, which is crucial to all of this.

I certainly hope to know the outcome of the research on the cost of meeting unmet demand in the health service next year. I do not have a date for the funding model, but I still hope to have it next year. That does not mean, however, that we will go ahead with it. As I mentioned, we have to make sure there is adequate capacity in the health service, that we strengthen primary and social care provision and put in place the reform structures and financial reforms needed before we change the funding model. Otherwise no funding model will work. It will take more than five years to do these things, which means that I do not anticipate the next Government, if my party leads it, being able to change the funding model for health care substantially.

It is also important that we face up to a few things to which we may not want to face up. Any system of universal health care, no matter where it is in place, whether it be the NHS in Britain, the Dutch system or the Canadian system, involves some rationing. Universal health care systems involve waiting lists in some form, telling people they have to wait because there is somebody with higher priority ahead of them or that they cannot receive some drug or treatment because it is not considered to be cost effective. That is why in every democratic country in the world there is, to some extent, a two-tier system. We allow people to spend their own money on health care if they want to. Even in Britain, where access to health care is very good, 10% or 15% of the population have private health insurance policies with BUPA in order that they can skip queues, choose a consultant or access treatments that are not considered to be cost-effective for the general population. We need to be honest about this in the debate.

Compulsory health insurance schemes can work and do in other countries, for example, in Holland. However, they are expensive. I am not sure having a system of compulsory health insurance would be right for Ireland. What would we do if people refused to pay? Would we fine them or tax them as happens in America if they do not take out insurance under Obamacare? Would we jail them? If they continued to refuse and turned up looking for treatment, would we then refuse them? I do not think we would do that in Ireland which is different from other countries. In European countries compulsory health insurance systems have tended to build up over time. Usually an employer pays for insurance for an employee at first and then people subsequently pay for themselves. We do not have that tradition in Ireland and I do not think it would be right for us for these various reasons.

No matter with what funding model we end up in the long term, we first need to address the four major deficit areas. We need to make sure there is enough capacity; strengthen primary and social care provision; put in place reformed structures and achieve financial changes which are also important.

Sitting suspended at 3.10 p.m. and resumed at 3.30 p.m.
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