Eoghan Murphy (Dublin South East, Fine Gael)
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31. To ask the Minister for Finance his views on allowing working parents to claim child care costs in full against their earned incomes for both tax and USC. [52047/13]

Michael Noonan (Limerick City, Fine Gael)
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The Government acknowledges the continuing cost pressures on parents, particularly those with young children. In recognition of these cost pressures, a number of support measures are in place to ease the burden on working parents. These include the Community Childcare Subvention (CCS) programme, which funds community childcare services to enable them to charge reduced childcare fees to qualifying parents, the Childcare Education and Training Support (CETS) programme which provides free childcare places to qualifying FÁS and VEC trainees and the Early Childhood Care and Education (ECCE) programme which provides for a free pre-school year for children in the year before commencing primary school. Generous entitlements to paid and unpaid maternity leave as well as child benefit payments are also provided. The Department of Social Protection provides financial support to families on low pay by way of the Family Income Supplement (FIS) and to one-parent families through the one-parent family payment.

In addition, a One Parent Family tax credit of €1650 is provided. This credit is payable to any single person with a child under 18 years of age or over 18 years of age if in full time education or permanently incapacitated.

The Universal Social Charge (USC) was introduced in Budget 2011 to replace the Income Levy and Health Levy. It was a necessary measure to widen the tax base, remove poverty traps and raise revenue to reduce the budget deficit. It is a more sustainable charge than those it replaced and is applied at a low rate on a wide base with very few exemptions.

In Budget 2012 I announced that those earning less than €10,036 would no longer be subject to the Universal Social Charge. This in itself has removed almost 330,000 individuals from the charge and is of particular benefit to the low paid.

I have no plans to introduce any further tax reliefs for childcare costs.

Eoghan Murphy (Dublin South East, Fine Gael)
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32. To ask the Minister for Finance his views on allowing elderly persons to claim health care costs, including health insurance premiums, against their tax and USC. [52048/13]

Michael Noonan (Limerick City, Fine Gael)
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Firstly, I would point out that persons aged 65 and over can avail of the age tax credits or the age exemption limits. For the years of assessment 2013 and 2014, in order to qualify for the income tax exemption a single individual’s income must be less than €18,000 or in the case of a married couple or civil partners, €36,000. These exemption limits are increased by €575 in respect of each of the first 2 qualifying children and by €830 in respect of each subsequent qualifying child living with the claimant.

In addition, section 469 of the Taxes Consolidation Act 1997, provides for income tax relief in respect of qualifying expenses incurred in the provision of health care in a tax year against the income tax paid by an individual for that year.

Health care is defined as the prevention, diagnosis, alleviation or treatment of an ailment, injury, infirmity, defect or disability, and includes care received by a woman in respect of a pregnancy. It does not include routine ophthalmic treatment, routine dental treatment, or elective cosmetic surgery.

Relief at the standard rate of income tax is available to all taxpayers, regardless of age for such expenses where they have not been reimbursed under a medical insurance policy. However, the cost of maintenance or treatment in a nursing home, which provides 24-hour nursing care on-site, is available at the claimant’s marginal rate of income tax.

Further details in relation to relief for health expenses are set out in leaflet IT6 which is available on the Revenue website at

Tax relief is also provided at the standard rate of income tax, regardless of age, for medical insurance premiums paid to cover a range of medical expenses. Since 2004, the relief also covers premiums paid on dental insurance policies for non-routine dental treatment. For the payments to qualify for relief, they must be made to an authorised insurer listed in the Register of Health Benefit Undertakings, established under the Health Insurance Act 1994.

Since 2001, the relief is granted under a tax relief at source system to all holders of medical insurance irrespective of whether or not they have a tax liability to offset the value of the relief. The subscriber pays the premium net of tax relief and the insurer obtains a refund of the relevant amount from the Revenue Commissioners.

As you will be aware, from 16 October 2013, tax relief for medical insurance premiums has been 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.

It should be noted that there is no relief against Universal Social Charge for either health expenses or medical insurance premiums. However, it should be noted that payments from Department of Social Protection such as the State Pension are exempt from the Universal Social Charge (USC). In addition, individuals aged 70 and over, provided their total income does not exceed €60,000, are not liable to the top rate of charge and payments from the Department of Social Protection will not be taken in to account in determining if an individual has exceeded the €60,000 threshold.