Pat Carey (Dublin North West, Fianna Fail)

Income tax relief in respect of health expenses will be granted at the standard rate of tax for 2009, with the exception of nursing home fees which will continue to be granted at an individual's marginal rate of tax. The change provided for in the Finance Bill follows on from the changes made in the Finance Act 2007, that is, the removal of the de minimus threshold of €125 for a single individual and €250 for a married couple. The Finance Act 2007 also provided for the removal of the requirement that there would be a defined relationship between the taxpayer and the person who is the subject of the tax claim. Standard rating health expenses relief will make the tax system fairer and more equitable for all taxpayers in accordance with the commitment in this regard in the programme for Government. The standardising of health expenses relief brings it in line with other reliefs such as rent relief, trade union subscription relief, medical insurance relief, third level fees relief and service charges relief. In addition, the standard rating of health expenses relief will mean better value for money for the Exchequer and will ensure that the relief will benefit the broadest range of taxpayers in a fair and equitable manner.

With regard to Senator Kelly's recommendation, while I am sympathetic to the individuals undergoing IVF treatment, given the very significant costs they face, the Minister does not believe that one particular treatment or medical procedure could readily be singled out for marginal relief while other treatments are standard-rated. Other Opposition Members have sought the retention of marginal relief for orthodontic treatment that can also involve significant cost.

I understand that what the Senator has in mind is that the higher rate of taxpayers, who are aged 70 years or over, will be allowed to deduct health expenses at their marginal rate. The biggest health expense which an elderly person may face is nursing home fees and the Minister has introduced an amendment to ensure that such fees will continue to be deductible at a taxpayer's marginal rate. The majority of persons aged over 70 years of age have no liability at the higher rate and many are exempt from tax altogether. The Revenue Commissioners have informed the Minister that approximately 90% of all income tax earners aged over 70 do not have a liability at the higher rate and therefore would not be in a position to benefit from this recommendation.

I do not believe it can be justified to provide a special regime to higher taxpayers based on their age and, for those reasons, I cannot accept the recommendation. However, as I indicated, the Minister is prepared to keep the IVF matter under review.