The position is that the VAT treatment of goods and services is governed by EU law with which Irish VAT law must comply. The rate of VAT that applies to a particular good or service is determined by the nature of the good or service, and not by the status of the customer. There is no provision in European VAT law that would allow the application of an exemption or reduction of VAT on supplies of fuel to customers over a certain age. However, I would point out that in last years Budget the excise duty on Kerosene and LPG for home heating was reduced to zero with effect from the 1st January 2007. This measure follows through on the commitment in Budget 2006 when these rates were halved. This measure is estimated to cost €24 million in 2007.
In addition, late last year, in response to energy price increases, the Government took steps to improve the social welfare Household Benefits Package scheme by increasing the amount of electricity or gas entitlements covered under the scheme. This will benefit over 340,000 social welfare recipients and cost almost €50 million per annum.
In relation to the VAT treatment of homecare services, following an amendment to the VAT Act 1972 introduced in this years Finance Act, homecare services provided by private operators which are recognised by the HSE are exempt from VAT. This is an important measure designed to support the Government's initiative aimed at supporting the elderly and others who wish to continue living at home.