Áine Brady (Kildare North, Fianna Fail)

I wish to report to the Seanad an amendment agreed on Committee Stage in the Dáil giving effect to exemptions from the charge for certain persons vacating their home due to long-term incapacity due to illness, and for certain persons providing accommodation for relatives.

Senators will recall we had an engaging and productive debate on the Bill in the Seanad two weeks ago. In the course of the debate, the Minister accepted the point made by a number of Senators that the Bill should make it clear that no liability for the charge would apply in the circumstances the Minister has outlined. I am pleased to provide more details to Senators of the provisions now incorporated in the Bill.

Section 4(5) caters for a situation where a person who owns a principal private residence vacates the dwelling in question because he or she is long-term incapacitated as a result of physical or mental illness. As the dwelling in question would no longer be used by the person concerned as a private principal residence, a liability to pay the charge could arise. I accept there is an issue as to whether it would be reasonable in these circumstances for the person concerned to incur the liability, notwithstanding the modest level of the charge.

The amendment provides a number of criteria that must be satisfied for the exemption to have effect. In the first instance, the incapacity must be long-term and due to mental or physical illness. Typically the incapacity would be brought about by infirmity due to old age or a form of senile dementia. Other forms of illness could result in incapacity. The essential point is that the person concerned is incapable of independent living into the future. It must be the person's principal residence that has been vacated. If the person does not own the residence he lives in, no charge would arise anyway.

The person concerned must not own the property in which he or she will reside in the future. In such a case the person would be the owner of at least two properties, in which case the exemption from a modest charge of €200 would not seem to be required in respect of the property that has been vacated.

Clearly, a person who is incapacitated due to long-term illness will require long-term care. This is often but not always secured through a nursing home or care centre. In such a case the Revenue Commissioners will permit that person's income to be offset against the cost of residing in the nursing home or care centre. It is often the case that the property that was the person's principal private residence is let out to defray the costs of the long-term residential care. The Minister was disinclined in bringing forward this amendment to require the person in care to pay the charge in these circumstances.

Sometimes the person who is incapacitated goes to live with and is looked after by someone else, normally a relative. In these circumstances, the Minister was also disinclined to provide that a charge should be paid on what used to be the incapacitated person's principal private residence. The relative who has taken the incapacitated person under his care has probably relieved the State, at least partially, of the cost that would otherwise be associated with institutional care of one kind or another. The Minister was not inclined to impose a charge in these circumstances, even if the dwelling concerned is rented out.

Section 4(6) addresses the issue of what are referred to as granny flats. In general the Local Government (Charges) Bill does not apply the €200 to dwellings that are not separate. A granny flat that constitutes an integral part of the residence in question will not be liable for any charge, assuming that the overall building of which it is a part is a principal private residence. Nor will a granny flat be liable for a charge where it is owned by the person who resides there if it is his principal private residence.

The question relates only to instances where the granny flat constitutes a separate dwelling and is owned by someone other than the resident, normally the person who owns the primary residential property of which the granny flat forms part or is associated with. This is the situation the amendment is designed to cater for and a valid case has been made to make it clear properties of this kind are exempt from the charge. Accommodation of this nature is usually provided by sons and daughters so they can look after their parents and in circumstances where the parents want to retain a measure of independent living for as long as possible.

Although it is secondary to the consideration I mentioned, the point should also be made that the cost to the State is likely to be far less where people are cared for by their relatives as opposed to taking such people into long-term care.

In drafting this amendment, the Department and the Office of the Parliamentary Counsel have taken note of the legislation that applies in the case of the home carer tax credit and the amendment I am reporting to the House retains many of its features. A number of conditions must be satisfied to avail of the exemption. The property in question must be provided free of rent, be located less than 2 km from the principal residence of the owner and the respected parties in the properties concerned must be related to each other.

There are sound reasons such conditions should apply. This exemption is being provided to recognise the altruism relatives show one another. This would be compromised if rent was charged. Going further, if rent is charged, the owner can afford to pay the €200 annual charge. The criterion of its being on the same property or within 2 km is consistent with the fact that one party is meant to be caring for the other, something that cannot be done if they live long distances apart. The 2 km provision follows precedent from Revenue's legislation dealing with the home carer tax credit.

The definition of relatives is inclusive. It will in no way act as a limitation on bona fide relatives or those of spouses or partners. The provisions on legal guardianship and wards of court complete the amendment in respect of people who are not related as such but whose legal standing to each other amounts to the same thing.

I commend Senators on their previous contributions to the Bill and commend the amendment to the House.