Seán Ó Fearghaíl (Kildare South, Fianna Fail)
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I wish to raise the issue of dementia and home renovations. The recently published national dementia strategy acknowledges that most people with dementia live in their communities and wish to continue to do so. To do this they sometimes need to make adjustments to their homes and some issues arise. It is often deemed that those with dementia are unsuited to apply for a loan to fund necessary renovations in their houses and the adaptation grant is often inadequate. When a family care-giver funds adaptation renovations in the home of the person with dementia, the care-giver is unable to claim the tax back from the home renovation incentive scheme as he or she is not the home owner. In the case where the person with dementia has adequate funds to make renovations, he or she is often on a State pension and is, therefore, unable to claim the tax back. In that respect I request that the Minister review the policy to ensure that adequate financial support is given to ensure that people with dementia are enabled to remain in their homes.

Under the home improvement scheme, VAT on building work can usually be claimed back by home owners through the PAYE system. If the older person or the person with disabilities has funds to pay the cost of the building work not covered by the grant, he or she tends to be unable to claim the tax back through the home improvement scheme. This issue arises as these people tend not to pay tax through the PAYE system as they are usually unfit for work. In the case where the older person or person with a disability does not have funds to cover the cost of the building work not covered by the grant, the burden may be left to the family. If a member of the family is not the house owner, that person is ineligible to reclaim the VAT through the scheme.

I will give an example. Mrs. A has early onset dementia and her occupational therapist and the neurological team have advised that she has her house adapted. The cost of the work is, €40,000, for example. Her daughter needs to live with her as the HSE provision for home help is inadequate to meet her daily needs. As her daughter works full-time, the household income of a full-time wage and Mrs. A's widow's pension decreases the percentage of works allocation through the adaptation grant. The family incur the cost of the building work which is not covered by the adaptation grant and they are ineligible to claim this money back from the home improvement scheme as they are not the home owners. Even if Mrs. A had the funds to pay for the cost not covered by the grant, she would be ineligible to claim the VAT back as she does not pay PAYE on her pension. On a separate note, the VAT payable for building works, which is not taken into consideration by the adaptation grant, which is approximately €5,000, needs to be paid to the builder before being eligible to claim it back through the aids and appliances scheme.

If the family, therefore, did not have the funds for this building, work could not take place in the first instance. These are the issues which are particularly pertinent. The home renovation scheme has worked very successfully. The Minister will agree with me on wanting to see something done for people who suffer with dementia, and we have an increasing number of such people in our society. I wonder whether the schemes can be amended in some way to meet the needs of the people to whom I have alluded.

Michael Noonan (Limerick City, Fine Gael)
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As the Deputy is aware, I introduced the home renovation incentive, HRI, in budget 2014. This scheme came into operation on 25 October 2013 and will run until 31 December 2015. The incentive provides tax relief for homeowners by way of a tax credit at 13.5% of qualifying expenditure incurred on repair, renovation or improvement work carried out on a principal private residence.

In the recent budget, I announced the extension of the home renovation incentive to rental properties whose owners are liable to income tax. The aim of the measure is to increase and improve housing supply at a time when there is strong demand for housing and insufficient supply in certain areas. The home renovation incentive has been very successful to date, with works on just over 15,900 homes notified to Revenue's online system as of 9 February 2015. This represents more than €328 million worth of works involving some 4,224 contractors. The incentive is generating significant employment in the tax compliant construction sector and increasing sales in building supplies, hardware and related businesses.

Qualifying expenditure is that which is subject to the 13.5% VAT rate. The work must cost a minimum of €4,405 exclusive of VAT, at which level it would attract a credit of €595. Where the cost of the work exceeds €30,000 exclusive of VAT, a maximum credit of €4,050 will apply. The credit is payable over the two years following the year in which the work is paid for. The tax credit is only available to the homeowner and not to children or other individuals who may fund the works. However, there are other measures available to individuals or family members who may fund works in their parent's homes.

A housing adaptation grant for people with a disability is available from local authorities and provides grant aid to applicants to assist in the carrying out of works that are reasonably necessary for the purposes of rendering a house more suitable for the accommodation needs of a person with a disability. This grant can assist with changes and adaptations to a home, such as making it wheelchair accessible, extending it to create more space, adding a ground floor bathroom or toilet, or installing a stair lift. This grant can cover up to 95% of the cost of works carried out, which is far more generous than the relief available under the home renovation incentive.

If minor works are required, a means-tested mobility aids grant scheme is also available. This scheme provides grants for works designed to address mobility issues in the home, such as the purchase and installation of grab rails, access ramps, stair lifts or level access showers. This grant is primarily targeted at older people. Further details on both of these grants are available from local authorities.

Works which are grant-aided, such as the grants mentioned above, also qualify for the home renovation incentive. Three times the value of the grant is deducted from overall expenditure, with any remainder attracting the tax credit of 13.5%. This is to align with best fiscal practice in that relief is not provided twice for the same expenditure.

It is worth noting that the deduction in respect of grant-aided work is not taken into consideration for the purposes of reaching the minimum spend threshold of €4,405 excluding VAT. Full details of the scheme are available on Revenue's website, along with a comprehensive guide for homeowners which answers frequently asked questions and provides assistance to homeowners who may wish to avail of the incentive.

The Deputy may be interested to note that there is a provision for the refund of VAT incurred on qualifying goods for the exclusive use of disabled persons in the Value Added Tax (Refund of Tax) (No 15) Order 1981. The order specifies the degree of disability and defines the qualifying goods as goods which are aids or appliances, including parts and accessories, specially constructed or adapted for use by a disabled person. The order extends to works carried out on homes to adapt them to make them more accessible for disabled persons. The works can be paid for by family members. As the rate of relief provided under the HRI equates to the same amount of relief under this VAT refund, it is not necessary to include such works in the HRI.

If the Deputy has a specific person, or number of persons, in mind, the Value Added Tax (Refund of Tax) (No 15) Order 1981 can be accessed by a relative and provides the same relief at 13.5% for the work undertaken.

Seán Ó Fearghaíl (Kildare South, Fianna Fail)
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I appreciate the point the Minister made in conclusion and that the VAT can be reclaimed by a family member, but it is also the case the elderly or disabled person must have the money in the first instance to pay the contractor. One of the difficulties for many of the people we meet who require these grants is they do not have adequate finance to make this payment in the first instance.

I commend what the Minister has done on the home renovation scheme, which has been positive with regard to what it has done for properties and generating employment, particularly for small builders throughout the country. I am aware of the use and the potential of the mobility scheme grants and the housing adaptation grants. I am simply stating to the Minister that there are plenty of situations in which the moneys required to adapt houses are in excess of the amount payable under these grants, particularly where people with dementia are concerned. People with dementia very often require a member of the family to be in residence on a full-time basis to support them. In these circumstances there is a dichotomy, in so far as the old person may not have the money to pay the charge upfront and recoup the VAT but the younger person is not the house owner and therefore cannot avail of the home renovation scheme. There should be sufficient flexibility, because I suspect the number of people who fall into this category is not inordinate. It could be extended somewhat so these schemes could be used together to the ultimate benefit of retaining a person with dementia in the community, where we know people with dementia want to be and where we know they can get the best quality care.

Michael Noonan (Limerick City, Fine Gael)
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The home renovation scheme runs until the end of 2015. While I have no plans to renew it for a further year or two yet, we will review the position going into the budget, as we will do in all of these cases. In the course of this review I will take the Deputy's views into account.