Paddy Burke (Fine Gael)
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I welcome the Minister of State at the Department of Health, Deputy Alex White, to the House. I call on Senator D'Arcy who has four minutes.

Michael D'Arcy (Fine Gael)
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The Minister of State is very welcome. Many of us who do our day-to-day work in constituency offices receive queries concerning medical cards. One area of continuing confusion is the notional rate of interest that is applied to applicants' savings. I am referring to the full medical card. When I tried to discover how the rate is applied, I found the situation was confused. The Department and the HSE did not seem to know themselves. I was given a number of different rates and was also told there was no rate.

I have tabled this Adjournment matter in order to clarify the matter. I hope the Minister of State can explain how the nominal interest rate is calculated by the HSE on savings as part of the means test for medical card applicants. The net rate for couples is very low, so I would like to hear what the Minister of State has to say about the matter.

Alex White (Dublin South, Labour)
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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.

Michael D'Arcy (Fine Gael)
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In light of what the Minister of State is saying, I presume the notional figure will change again on 1 January 2015. While people will receive certificate of interests, I am of the view that deposit interest retention tax, DIRT, which is charged at a rate of 41%, is going to have to be taken into consideration in the context of the calculation of interest. For a single person, interest is earned at a rate of 2.3% on all moneys additional to the first €36,000, while the figure which applies in this regard for a couple is €72,000.

In my opinion, the rate of 2.3% should be reduced by the amount of DIRT paid in order that actual amount of money any couple or individual have can be calculated. The calculation relating to the notional rate of 2.3% is fair and reasonable. However, I ask the Minister to State to consider reducing this by the amount of DIRT paid, which is charged at a rate of 41%. The final amount involved is, after all, that which remains when the latter has been paid, not that which obtains when the 2.3% rate has been applied. I ask the Minister of State to bring my view on this matter to the attention of the HSE and the relevant policymakers in order that they might be considered. While people are nominally benefitting from a rate of 2.3%, their savings, etc., are being automatically reduced by 41%.

Alex White (Dublin South, Labour)
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I understand the point the Deputy is making. Deposit interest retention tax or DIRT applies right across the board and not just to the individuals affected in this instance. However, I will certainly take into account the Senator's observations. If he wishes to write to me separately, I will ensure that he receives a response. I will certainly communicate his views through the system.