Alex White (Dublin South, Labour) | Oireachtas source

I thank Senator Michael D'Arcy for raising this issue. For the record, we are agreed that the text of this Adjournment debate matter should read "notional" rate as opposed to "nominal" rate.

As the Senator will be aware, medical cards are provided to persons who, under the provisions of the Health Act 1970, as amended, are in the opinion of the Health Service Executive unable without undue hardship, having regard to their overall financial situation, to arrange GP services for themselves and their dependants. The assessment for a medical card is, therefore, determined primarily by reference to the means, including the income and expenditure, of the applicant and his or her partner and dependants.

The notional interest rate to which the Senator refers, is only relevant to the supplementary assessment process for medical cards for persons aged 70 and over, where means testing is on a gross income basis. The gross income qualifying limits under this scheme are €500 per week for a single person and €900 per week for a couple. For the purposes of assessment for this medical card, savings or similar investments of €36,000 for a single person or €72,000 for a couple are disregarded. For amounts in excess of these limits a notional rate of interest is applied to the savings to determine the amount to be taken into account as income for assessment purposes.

The notional rate is set by the HSE on a quarterly basis by taking an average of the current deposit interest rates of a number of the major Irish banks and building societies on 1 January, 1 April, 1 July and 1 October. The notional rate is 2.3 % with effect from 1 January 2014, having been reduced from a previous 3%. It is therefore the average of the current deposit interest rates, which is determined by taking four different readings throughout the year and then determining the average.

Alternatively, a medical card applicant may opt to have the actual income in interest received from the financial institution applied for the purpose of means assessment. In those circumstances, the applicant must provide a certificate of interest paid on savings in the last full calendar year.

In respect of fixed-term or long-term savings products in respect of which interest is applied following a fixed period - and if the applicant so wishes - the HSE can take account of the interest earned in the year of maturity of the investment or apply the notional rate to determine the income. Interest on savings or investments that are the proceeds of certain State compensation or redress schemes are exempt from assessment of means for medical card-GP visit card eligibility. Therefore, only the interest or income earned on savings and similar investments above a certain value will be counted as income and not the total values of the savings or investments themselves.