Michael Noonan (Limerick City, Fine Gael)
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Deputy Naughten raised the specific issue of whether changing a health insurance policy during a calendar year could result in double payment of the levy or stamp duty. I am advised that this does not arise under the interim risk equalisation scheme, nor will it arise under the permanent scheme. The charge to stamp duty arises on the renewal of a contract or on entering into a contract or renegotiation of the terms of an existing health insurance contract. For example, a reduction in cover would not be treated as renewal of an existing contract or entering into a new contract but as an amendment to an existing contract. The stamp duty or levy would be paid by reference to the accounting period under which the contract was initially renewed or entered into. The renegotiation of a contract to change cover would not be regarded as a renewal or as entering into a new contract. In the same way, a move from one insurance provider to another will also not result in double payments of the levy. It is not feasible or practical to draft legislation to cater precisely for every possible exceptional administrative scheme arrangement. Rather, it will be sufficient for the Revenue Commissioners, where necessary, to issue guidance notes to address any such issues that arise. They have been clear as to their intentions. I hope that addresses the Deputy's point.

Denis Naughten (Roscommon-South Leitrim, Independent)
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This has been raised with the Minister for Health by Deputy Olivia Mitchell on a number of occasions. It seems to be a practice within the VHI, as opposed to the other insurers, to bill a person for the levy for the full year if he or she was paying on a monthly basis. Under the old system, the payment was on an annual basis. Now that it is on a quarterly basis, does this mean a person will only have to pay up to the end of the quarter and the new insurance company will take over from then on, or will the practice that has existed up to now continue? The difficulty is that this creates a barrier to switching mid-year.

Michael Noonan (Limerick City, Fine Gael)
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Sorry; could Deputy Naughten explain? Is he saying there is a double payment?

Olivia Mitchell (Dublin South, Fine Gael)
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Yes.

Denis Naughten (Roscommon-South Leitrim, Independent)
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No. Deputy Olivia Mitchell may have to come in on this. If someone renews a policy with the VHI on 1 April, paying from his or her salary on a monthly basis, but finds on 1 June that Aviva has a better deal and moves, VHI will charge an exit fee and the 12-month, annualised figure for the levy. I understand the argument is that the VHI has already paid the levy to the Revenue Commissioners. Now that the Revenue Commissioners will receive the money on a quarterly basis rather than on an annual basis, will the penalty for someone exiting from the VHI be less than was the case heretofore?

Michael Noonan (Limerick City, Fine Gael)
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The policy and principle is to ensure that double payments do not occur. If there is a suggestion or a doubt over whether they may be occurring, it is a matter for the Revenue Commissioners. We will draw the Deputy's point to the attention of the Revenue Commissioners to allow them to straighten it out with VHI. There should not be double payments.

Denis Naughten (Roscommon-South Leitrim, Independent)
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It is not a double payment but one pays for the full year even if one is with the insurer for four months. The lead insurer pays it. Perhaps someone in the Department can revert to me.

Michael Noonan (Limerick City, Fine Gael)
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Is this a case where someone has already paid the previous service provider?

Denis Naughten (Roscommon-South Leitrim, Independent)
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Yes.

Michael Noonan (Limerick City, Fine Gael)
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Then it is a double payment.

Denis Naughten (Roscommon-South Leitrim, Independent)
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The objective is not to pay the levy on the second occasion but one is paying the full year to the exiting insurer even if one is with that insurer for four months.

Michael Noonan (Limerick City, Fine Gael)
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We can take it up with the Revenue Commissioners.

Michael Kitt (Galway East, Fianna Fail)
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Amendment No. 28 has been ruled out of order.