Dáil Éireann Debate, Tuesday - 24 July 2018
357. Deputy Richard Boyd Barrett asked the Minister for Finance the amount of revenue that was foregone in each of the years 2015 to 2017 and to date in 2018 through tax breaks on private medical insurance; and if he will make a statement on the matter. [35015/18]
Amharc ar fhreagraI am advised by Revenue that the cost of tax relief on medical insurance premiums between 2004 and 2015 is published on the Revenue website at http://www.revenue.ie/en/corporate/information-about-revenue/statistics/tax-expenditures/costs-expenditures.aspx.
In 2015, the latest year for which data are currently available, the cost of tax relief on Medical Insurance Premiums was €325.2 million. This tax relief is provided against the cost of medical insurance for individual taxpayers within certain limits.
In Budget 2014 a maximum premium threshold of €1,000 per adult and €500 per child was introduced on medical insurance premiums that would continue to be eligible for tax relief from 16 October 2013. Any premium amount paid in excess of these thresholds no longer qualifies for tax relief.
The cost of Income Tax relief in respect of medical insurance increased significantly in the years leading up to Budget 2014, estimated at €404 million in 2011, €448 million in 2012 and it was projected that the cost could reach €500 million in 2013 if no policy change were made. Despite the increasing cost of the relief, the numbers insured were estimated to have reduced by approximately 150,000 over the same period, while at the same time the level of medical cover of medical cover decreased on some policies.
Against this background the increase in costs was unsustainable. If the relief had remained unchanged and the trend was to continue, it was estimated that the cost could have increased to €1 billion per annum by 2020. The ceilings introduced in Budget 2014 ensure a level of continuing support via the tax system for those who purchase medical insurance policies, while reducing Exchequer exposure to more expensive policies.
