Brian Cowen (Laois-Offaly, Fianna Fail)

I am advised by the Revenue Commissioners that the most recent estimated cost of making all personal tax credits refundable when they are unused, including personal employee credits, the home care tax credit, the one-parent family credit and the age credit, as well as the minor personal credits, such as the incapacitated child credit and the blind person's credit, would be approximately €1.3 billion annually. The main category of refund would relate to the basic personal credit where the annual cost of refunding the unused portion of the credit to income earners with insufficient earnings to fully absorb it would amount to approximately €700 million. The next two categories of refund in order of scale are the employee credit, which would cost approximately €590 million, and the home care credit which would cost approximately €35 million.

The estimate of €1.3 billion relates only to the cost of extending refundable tax credits to all those on Revenue's tax files. If a refundable tax credit system were to be introduced, one would have to consider those who are not on the tax files, for example, those who are of employable age but not working, including those on social welfare. That would increase the cost significantly.

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