Róisín Shortall (Dublin North West, Independent)
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166. To ask the Minister for Finance how the new tax arrangements in respect of persons with medical insurance, as announced in budget 2014, will work in practice, with an example of the impact on a family paying a premium just below the new tax relief cap, an example of the impact on a family paying slightly above the new tax relief cap, and an example of a family paying a premium well in excess of the new tax relief cap. [44888/13]

Michael Noonan (Limerick City, Fine Gael)
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The position is that from 16 October 2013, tax relief for medical insurance premiums will be restricted to the first €1,000 per adult and the first €500 per child insured. Any portion of premium paid in excess of these ceiling will no longer qualify for tax relief. The new ceilings will ensure continuing support via the tax system for those who purchase standard policies, while reducing Exchequer exposure to more expensive policies.

The examples below demonstrate how the new upper ceilings on the amount of medical insurance premiums that will qualify for tax relief will work.

Example 1

John and Mary are married with two children. Barry and Denise who are aged 9 and 11 years. They have medical insurance cover and pay gross premiums of €2,600 in 2013 and 2014 before tax relief at source is applied. The breakdown of the medical insurance premiums is as follows: €900 per adult and €400 per child = €2,600 total medical insurance cost before tax relief at source is applied.

This family will see no change in the cost of their medical insurance premium as a result of Budget 2014.

Example 2

Paul and Sinead are married with two children. Gary and Kate who are aged 7 and 9 years. They have medical insurance cover and pay gross premiums of €3,400 in 2013 and 2014 before tax relief at source is applied. The breakdown of the medical insurance premiums is as follows: €1,100 per adult and €600 per child = €3,400 total medical insurance cost before tax relief at source is applied.

This family will pay an additional €80 towards their medical insurance cover as a result of Budget 2014.

Example 3

Gerry and Clare are married with two children. Paul and Laurna who are aged 5 and 7 years. They have medical insurance cover and pay gross premiums of €6,000 in 2013 and 2014 before tax relief at source is applied. The breakdown of the medical insurance premiums is as follows: €2,000 per adult and €1,000 per child = €6,000 total medical insurance cost before tax relief at source is applied.

This family will pay an additional €600 towards their medical insurance cover as a result of Budget 2014.