The purpose of Financial Resolution No. 7 is to ensure individuals earning more than €60,000 per annum will be subject to the full rate of universal social charge. At present, individuals aged 70 years or over pay a maximum rate of 4%, regardless of their level of income. From 1 January 2013, any of these individuals who have income exceeding €60,000 will pay the full rate of universal social charge. Individuals aged 70 years or over who have income that does not exceed €60,000 will continue to pay a maximum rate of 4% on their income. Separately, individuals who have a medical card or an entitlement to a medical card under community regulations pay a maximum rate of 4%. In framing this provision it was generally accepted that it would only apply to low income taxpayers. It has since been established that a number of high income earners are able to avail of this provision as they have an entitlement to full eligibility for services under Part IV of the Health Act 1970 as a result of the community regulations. To address this anomaly, the capping of the universal social charge at a maximum rate of 4% for medical card holders will apply only where the individual's total income does not exceed €60,000. These changes will take effect from 1 January 2013. I commend this Resolution to the House.

Resolution No. 8 relates to the specified rate used to calculate the taxable benefit to employees. Where an employee receives a loan from his or her employer at a rate below the specified rate, the employee is chargeable to tax on the benefit-in-kind reflected by the difference. The specified rate which differentiates between home loans and other loans is reviewed annually in the light of the average market rates provided for the Department of Finance by the Central Bank. This resolution provides for a decrease from 5% to 4% in the specified rate used to calculate the taxable benefit to employees from home loans provided by their employers at preferential rates of interest. The resolution provides also for an increase from 12.5% to 13.5% in the specified rate used to calculate the taxable benefit to employees from other non-home loans provided by their employers at preferential rates of interest. The purpose of the resolution is to keep pace with the changes in interest rates in the market in the past 12 months. The overall yield of €1 million cited in the budget book is tentative. Revenue statistics do not provide a figure specifically for taxation yielded by this measure

Financial Resolution No. 9 confirms the level of health insurance premium that will qualify for tax relief under the tax relief at source scheme operated by the Revenue Commissioners will be the amount of the premium paid by an individual after deducting the amount of any age-related tax credit under section 470B(4) of the Taxes Consolidation Act 1997 under the current interim scheme or any credit to which the individual is entitled under the new risk equalisation scheme being provided for in section 15 of the Health Insurance (Amendment) Bill 2012. The permanent risk equalisation scheme is being introduced to replace the interim scheme under which an individual provided for by the age related tax credits in section 470B and, therefore, an individual should only have an entitlement to one or other credit at any time. Section 470B only applied in respect of policies with an authorised insurer that were renewed or entered into after 1 January 2009 but before 1 January 2013. Section 470B only applied in respect of policies with an authorised insurer which were renewed or entered into after 1 January 2009 but prior to 1 January 2013. The Health Insurance (Amendment) Bill 2012 was considered on Committee Stage on 27 November and Report Stage on 4 December. While it is likely to have passed all Stages by the time the Finance Bill is enacted, reference has been made to the risk equalisation scheme as it will be inserted into the Health Insurance Act 1994. This is not a budgetary matter but a consequential measure arising from the Government's decision to replace the interim risk equalisation scheme with a permanent risk equalisation scheme and the age related income tax credits with risk equalisation credits from 1 January 2013. The Finance Bill 2013 will give effect to the new rates of the health insurance levy under the new risk equalisation scheme.

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