Derek Keating (Dublin Mid West, Fine Gael)
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109. To ask the Minister for Finance if the stamp duty collected by means of the health insurance levy has resulted in a surplus in the years 2009, 2010 and 2011; the amount of such surpluses; and if he will make a statement on the matter. [23111/13]

Michael Noonan (Limerick City, Fine Gael)
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The Health Insurance (Miscellaneous Provisions) Act 2009 was introduced to make the cost of private health insurance accessible to older people, to support the Government’s policy of community rating of health insurance. Community rating, in principle, provides that everybody is charged the same premium for a particular health insurance plan, irrespective of age, gender and the current or likely future state of their health. This measure is in response to the Supreme Court's decision in July 2008 to strike down elements of the previous risk equalisation scheme as ultra vires. It was intended that the measure would be cost neutral over its duration – that is, the cost of the age related income tax credit would be met by the yield from the health insurance levy, which is a Stamp Duty. The scheme was initially intended to run for three years but was extended for a further year before being replaced by the current permanent risk equalisation scheme under the Health Insurance (Amendment) Act 2012.

I am assuming the Deputy is asking whether the yield from the health insurance levy exceeded the cost of the age related income tax credit in the years in question. However, it is more appropriate to look at the interim scheme as a whole, rather than individual years. I am informed by the Revenue Commissioners that the annual yield for the years 2009 to date from the health insurance levy, and the cost of age related income tax credits paid out over the same period, are as follows.

As can be seen from the figures, in 2009 the health insurance levy yield was €19m below the age related income tax credits paid out; in 2010 the levy yield was €10m in excess of the cost of the credits; in 2011 the levy yield was €14 m in excess of the cost of the credits; and in 2012 the levy yield was €1m in excess of the credits. While the levy yield in 2013 to date is significantly higher than the credits paid out, no further levy will be received in respect of the interim scheme while payments of age related credit will continue until January 2014 in respect of policies paid by instalment. The interim scheme is still broadly on target to be revenue neutral.

Under the new permanent risk equalisation scheme, the health insurance levy continues to be collected as a Stamp Duty but it is paid into the new Risk Equalisation Fund rather than the Exchequer. The age related income tax credits have been replaced by “risk equalisation credits” which operate outside the tax system. It is also intended that the permanent scheme will be cost neutral – that is, the cost of the risk equalisation credit will be met by the yield from the health insurance levy. The projected turnover (levy yield/credit cost) of the new scheme is c. €500m per annum.