Wednesday, 29 September 2021
Nithe i dtosach suíonna - Commencement Matters
Cuirim fáilte roimh an Aire Stáit. This Commencement matter is a practical way to update an existing and very important scheme, which is in line with our sustainable and carbon neutral ambition. We should be cognisant of the huge cost to living with a disability. I have been working with some of our Ógra Fianna Fáil members on this proposal, notably Brian Crehan from Kildare North.
Disabled persons have not been properly accommodated or encouraged by the green initiatives taken by the Government, in particular, on electric cars. To provide equity among the most vulnerable in our society, special and extra arrangements should be made to facilitate those with mobility issues in the green transition. We ask for a expansion of the tax relief and fuel allowances available under the disabled drivers and disabled passengers scheme.
I ask the Minister to look at three areas. First, I would like to expand the disabled drivers and disabled passengers scheme. The scheme currently covers tax relief in the form of remission of vehicle registration tax, VRT, repayment of VAT on purchase of a vehicle and on the cost of adapting that vehicle. We ask the Minister to expand the scheme to include electric and hybrid electric vehicles across the three areas of that tax relief, mainly the remission of VRT on electric and hybrid electric vehicles and repayment of VAT on the purchase of electric vehicles and the cost of adapting them.
Second, I ask the Minister to increase the maximum rate of reimbursement in order to incentivise the green transition. The maximum amounts available under the scheme are €10,000 for disabled drivers and €16,000 for disabled passengers. There is a cap of €16,000 on the amount available for specially adapted vehicles for drivers with severe disabilities and a cap of €22,000 on extensively adapted vehicles. We ask the Minister to increase the reimbursement figures by up to 50% to allow for the higher cost of purchase and adaption of electric vehicles.
Third, I ask the Minister to look at the fuel allowance. Disabled drivers who qualify under the disabled drivers and disabled passengers scheme are given a fuel allowance for up to 2,730 l per annum. We ask the Minister to consider expanding this tax relief allowance to include electric charging to the maximum amount, which would possibly reach between 120 and 240 per 100 km.
The most glaring and obvious challenge our citizens with disabilities face is mobility and essentially being trapped in their own homes or small community. The statistics back that up, in that 24% of our people with disabilities do not have access to a car or van, compared with 12% of the general population. If we could expand the scheme and assist, incentivise and empower people to make environmentally conscious choices, it could be a clear and definitive way of helping disabled persons to adapt their car and have a mode of transport and would incentivise them to make the green choice we all want to make.
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.
As the Minister of State mentioned, the primary medical certificate is not perfect. I look forward to the review because even the descriptions he read out are incredibly crass. There are some aspects that we have to look at. He also mentioned that there is a significant tax expenditure on this. It is money very well spent, however, and it will do no harm for the State to spend more. We refuse to publish the Indecon report on the cost of disabilities in this country. There is a huge cost involved and we should do anything we can to incentivise people with disabilities and alleviate the cost on them. One way of doing that would be to increase those bands. It is very good to hear that there is no differentiation between electric and other vehicles in the scheme. I hope that is clear to everyone. I am glad we had have obtained clarity today because electric vehicles are very expensive. I will take this up again at a later date. I thank the Minister of State for coming here this morning.
I thank the Senator for her second contribution. Budget 2021 introduced a new VRT charging table which reduced the rate for low-emission vehicles. Battery-electric vehicles now have zero tailpipe emissions and are therefore not subject to the nitrogen oxide surcharge. This, coupled with the relief, means that many electric vehicles end up paying no VRT at all. This complements a broad range of supports for battery-electric vehicles, which includes no taxable benefit-in-kind up to a value of €50,000, the Sustainable Energy Authority of Ireland purchase grant, the home charger installation grant and reducing tolls, etc.
There are a number of provisions to help with the cost of electric vehicles that are available to everybody, including people under this scheme. In the context of incentivising the purchase of electric vehicles, there are a number of incentives already in place in the context of the scheme. These are available to everybody who is part of the scheme. I acknowledge the importance of the disabled driver and passenger scheme and the relief I hope it provides for those involved. I also hope that we will have a review of the medical certificate as quickly as possible in the coming year.