Paschal Donohoe (Dublin Central, Fine Gael) | Oireachtas source

We discussed this on Committee Stage last year. I remain satisfied that the current limits are appropriate. In 2017, this measure benefited 80,500 taxpayer units. Little evidence is currently available to indicate that the current exemption limits are causing any undue financial hardship for those aged over 65. Deputy McGrath may have different evidence, to which he will no doubt refer if he has it. Age exemption is only one of the many types of relief available to those of retirement age. Those aged over 66 are exempt from employees' pay related social insurance, PRSI, while those aged over 70 benefit from a reduced rate of USC. Other income tax credits may also be available, depending on the personal circumstances of the individual. Those may include the personal tax credit, credits for widows or widowers, blind individuals, those caring for incapacitated children or dependent relatives and for health expenses incurred by the taxpayer.

These apply in addition to the various expenditure measures that give support to those aged over 65, including the State pension and the free travel pass. At current levels, the age exemption has an Exchequer cost of €79.7 million per annum. Even a modest increase to the limits would come with a significant cost. For example, it is estimated that an increase of €1,000 for individuals and a €2,000 increase for couples would cost an additional €36.6 million in a full year. Any consideration of such changes would need to be cognisant of the significant demographic changes projected to happen in the future.

For example, it is estimated that the share of the population aged 66 years and over will more than double between 2016 and 2071, while life expectancy rates are set to increase by six years for males and seven for females. As a result, even without making additional changes such as the ones the Deputy is considering, there will be significant pressure on the Exchequer to fund expenditure in areas such health and social welfare. Therefore, it is my view that the current income exemption limits are reasonable and continue to represent the appropriate use of limited resources, taking account of the various other State supports for the over-65s. For that reason, I do not propose to accept the amendment. If there are particular matters or items on which the Deputy wants further information or to have costed, I will make it available to him, as I would to any other committee member.