Paul Gogarty (Dublin Mid West, Green Party)
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Question 219: To ask the Minister for Finance if over 65s will have their SSIA tax waived, in line with the situation that pertains with the DIRT waiver; if this issue was advertised sufficiently in advance of the SSIA scheme; if a non-waiver means that the advantages enjoyed by the over 65s in saving compared with younger people are effectively negated; and if he will make a statement on the matter. [17240/06]

Brian Cowen (Laois-Offaly, Fianna Fail)
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The SSIAs were introduced in the 2001 Finance Act and give a tax credit to all SSIA investors of 25%. The aim of the SSIA scheme was to encourage savings. This aim has been successfully achieved with 1.1 million persons availing of the special scheme.

It is widely acknowledged that one of the reasons for the success of the SSIA scheme was its simplicity. It was clearly stated from the very outset that the SSIA investment returns would be subject to a 23% exit tax at maturity with no exemptions for anyone. Although all SSIA accounts are subject to an exit tax, it should be noted that the SSIA scheme represented a very good deal for all of those taking it up, whether over 65 years of age or not. A person who will have saved €254 per month over 5 years, into their SSIA account, will receive a credit of €3,800 even before any interest is taken into account.

It should be noted that DIRT on deposit interest was introduced in 1986 and only two reliefs apply, i.e. for the over 65s and for the physically or mentally incapacitated, where the DIRT is deducted by the financial institution on the deposit interest and is refunded if the person claiming the refund is not otherwise liable to income tax on their total income. It is not a total tax exemption for all those aged over 65 or incapacitated.