Seán Fleming (Laois-Offaly, Fianna Fail) | Oireachtas source

I thank Senator McGreehan for raising this matter. I am replying on behalf of the Minister for Public Expenditure and Reform, with regard to incentivising the purchase of electric vehicles as a sustainable option under the primary medical certificate. It is clear from listening to Senator McGreehan that she has done detailed work on her presentation and has worked on it with other people. The Senator is so well informed she could have almost written the Minister's script. That is a credit to the research and work she has done on this important area.

The disabled drivers and disabled passengers tax concession scheme provides relief from VAT and vehicle registration tax, up to certain limits, and an exemption from motor tax and a grant in respect of fuel on the purchase of an adapted car for transport of a person with specific, severe and permanent physical disabilities. In order to qualify for the scheme, an applicant must be in possession of a primary medical certificate. We all understand that. In order to qualify for a primary medical certificate, an applicant must be permanently and severely disabled and satisfy one of the following conditions, as set out in the Finance Act 1989: be wholly or almost wholly without legs or the use of both legs; be wholly without the use of one leg and almost wholly without the use of the other leg such that the applicant is severely restricted as to movement of the lower limbs; be without both hands or without both arms; be without one or both legs; be wholly or almost wholly without the use of both hands or arms and wholly or almost wholly without the use of one leg; or have the medical condition of dwarfism and have serious difficulties of movement of the lower limbs. It is very narrow and specific. As everyone will know, the issue relating to the primary medical certificate resulting from recent court decisions is under review. A working group is currently working on that to update the conditions and make sure the scheme is consistent with the legislation.

The scheme represents a significant tax expenditure. Between the vehicle registration tax, VRT, VAT foregone and the fuel grant, the scheme cost rose from €50 million in 2015 to €67 million in 2020. This figure does not include the revenue foregone in respect of motor tax, which is paid directly by the people concerned. The drivers and passengers with disabilities scheme provides for the remission or repayment of VRT up to certain limits. The Finance Act 1992 further provides that a category A series production vehicle can avail of relief of up to €5,000 on the VRT due. Under the drivers and passengers with disabilities scheme, there is no differentiation between electric and other vehicles in terms of VRT or VAT refund. The amount of VRT due or paid on a vehicle is remitted or repaid up to the maximum relief applicable, which is €10,000 for VRT or VAT relief in most cases. As there is a separate VRT relief for electric vehicles provided for by section 135C(3)(b) of the Finance Act 1992, the amount of VRT due or paid on an electric vehicle may be lower than the maximum relief permitted. In such a case the VRT relief will equate to the actual VRT paid. The VAT element of the refund is given regardless of whether it is an electric vehicle. There is no distinction as to the category of the vehicle.

Members of the scheme may claim payment of a fuel grant based on a per litre rate of 61.9 cent for petrol, 51.5 cent for diesel and 11.8 cent for liquefied petroleum gas. Outside of the disabled drivers and passengers scheme, full battery-electric vehicles can currently avail of a VRT relief of €5,000. Since 2008 VRT has been calculated according to a vehicle's CO2 emissions. Budget 2021 introduced a new VRT charging rate for low-emission vehicles. My time is up but I will provide further information in the second round.