Brian Cowen (Laois-Offaly, Fianna Fail)

The recommendation relates to section 469 of the Taxes Consolidation Act 1997 which provides tax relief for certain un-reimbursed medical expenses. The relief is granted in respect of qualifying expenses which exceed €125 in a year incurred by one qualifying individual and in respect of such expenses in excess of €250 in a year incurred by more than one qualifying individual. The effect of the recommendation would be to remove the minium amounts to be incurred and also to extend the relief to expenses in respect of routine dental and ophthalmic treatment.

This particular relief has been available since 1967 and has always been intended to provide relief where medical expenditure was significant. It was never envisaged that all outlay, irrespective of the type of treatment, should be covered. In this regard, I should point out that had the minimalist amount of €50 for qualifying expenditure, which was put in place at the inception of the relief in 1967, risen in line with increases in the consumer price index it would amount to approximately €900 in today's values. That would suggest that anything above €900 should be paid for by oneself. As I have said, the actual amounts are €125 for a single person and €250 for married or two qualifying individuals.

Following consideration of a similar proposal in the other House, I understand that the recommendation is aimed at making it easier for taxpayers to claim tax refunds to which they are entitled. While I support that aim, I do not accept that extending the scope of the relief in the manner suggested would necessarily achieve the objective. While certain exclusions apply, as at present, or if all medical expenditure as proposed were covered, it would hardly be a factor in whether a taxpayer makes a claim for the relief. The claim forms, MED 1 for medical expenses and MED 2 for non-routine dental claims, are straightforward and fully explained so their completion should not present difficulties. Indeed, they are the claim forms most frequently requested by taxpayers.

It is estimated that to give effect to both aspects of the Senator's recommendation would cost in the region of €90 million in a full year. Approximately €50 million of this relates to the proposed removal of the minimum threshold for a claim to qualify for relief, while the remaining €40 million relates to the inclusion of routine ophthalmic or dental treatment.

The de minimis thresholds are intended to exclude a certain amount of expenditure from relief, given that the relief is intended to assist significant outlay only. In all the circumstances, therefore, I am not in a position to accept the recommendation.