Written answers

Tuesday, 5 December 2006

11:00 pm

Photo of Richard BrutonRichard Bruton (Dublin North Central, Fine Gael)
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Question 207: To ask the Minister for Finance if persons paying tax under PAYE receive relief in respect of the health levy, of standard pension contributions, and AVCs; and if similar concessions apply to the self employed. [41366/06]

Photo of Brian CowenBrian Cowen (Laois-Offaly, Fianna Fail)
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Employee contributions to approved occupational pension schemes, including AVCs, are exempt from income tax, subject to certain limits, as are contributions made by self-employed individuals to retirement annuity contracts. Similar relief applies to contributions to personal retirement savings accounts (PRSAs). With effect from 1 January 2006, the maximum annual tax relieved contribution that an individual may make towards all of his or her pension funds is determined by the individual's age and the level of his or her remuneration, subject to an overall earnings cap which currently stands at €254,000. The age related percentage limits are as shown in the table.

AgeLimit as a % of relevant earnings
%
Under 3015
30 to 3920
40 to 4925
50 to 5430
55 to 5935
60 or over40

If the pension contribution (including an AVC contribution) exceeds these percentages, the excess contribution can be brought forward to a following tax year against relevant earnings for tax relief purposes (subject of course to the above annual percentages not being exceeded in any one tax year).

I understand that the position regarding PRSI refunds on pension contributions (which also cover the health contribution elements of PRSI), insofar as it relates to individuals paying tax through the PAYE system, was set out to you in a recent response to a question to my colleague the Minister for Social and Family Affairs, Deputy Brennan. My understanding is that such refunds do not apply in the case of self-employed individuals paying tax under the self-assessment system.

Photo of John GormleyJohn Gormley (Dublin South East, Green Party)
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Question 208: To ask the Minister for Finance the reason tax breaks for private hospitals represents good value for money; and if he will make a statement on the matter. [41669/06]

Photo of Brian CowenBrian Cowen (Laois-Offaly, Fianna Fail)
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By using capital allowances for the construction of private hospitals, I believe that the hospitals will come on stream quicker than if they were being provided by the public sector. The Government is committed to exploring fully the scope for the private sector to provide additional capacity needed in the health system. The HSE will be able to take up a proportion of the additional beds at a discounted price to address their waiting lists - the legislation specifies that a qualifying hospital must undertake to make available 20% of its capacity for public patients at a discount of 10%. The effect of this measure will be to reduce the pressure on public hospital beds. Providing hospital facilities for those with private health insurance in private hospitals will enable more beds in public hospitals to be made available for public patients.

I should also point out that the scheme of capital allowances for the construction of private hospitals was reviewed by Indecon Economic Consultants as part of the overall review of property tax incentives in 2005. Indecon consulted widely in the course of their review, including consultations with the Department of Health and Children and the Health Service Executive. The report was published on 6 February and is available on my Department's website. Among the findings of the review, it is stated that: "While it is too early to provide detailed estimates of the impact of the scheme on the supply and on the costs of hospital beds, Indecon believes the scheme has the potential to address supply shortages in the sector and to reduce costs."

Photo of Denis NaughtenDenis Naughten (Longford-Roscommon, Fine Gael)
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Question 209: To ask the Minister for Finance further to Parliamentary Question No. 138 of 22 November 2006, his views on reducing the level of VAT paid on such products; and if he will make a statement on the matter. [41068/06]

Photo of Brian CowenBrian Cowen (Laois-Offaly, Fianna Fail)
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The position is that the VAT rating of goods and services is subject to the requirements of EU VAT law with which Irish VAT law must comply. Under the Sixth VAT Directive, Member States may only apply the reduced VAT rate to those goods and services which are listed under Annex H of the EU Sixth VAT Directive. While Annex H does include the supply of children's car seats, it does not include car safety equipment. The reduced rate cannot therefore be applied to such goods.

With the exception of child car seats the only rate of VAT that can apply to car safety equipment, under EU law, is the standard VAT rate which in Ireland is 21%.

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