Michael McGrath (Cork South Central, Fianna Fail)
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68. To ask the Minister for Finance if there is an exemption from the universal social charge in respect of an occupational pension which goes directly to a State hospital for the long-term care for a terminally ill patient; and if he will make a statement on the matter. [47558/14]

Michael Noonan (Limerick City, Fine Gael)
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The Universal Social Charge (USC) was introduced from 1 January 2011 and replaced the Income and Health Levies.  The USC is an annual tax payable on an individual's total income in a year, subject to a small number of exemptions and reliefs.  In particular, an individual is not liable to pay USC where his or her total income in the current tax year does not exceed €10,036.  For 2015, it is proposed in the current Finance Bill, which is before the Oireachtas, to raise this exemption figure to €12,012.  In addition, individuals aged 70 and over benefit from a lower rate of USC provided their total income does not exceed €60,000.

The precise circumstances in which a pension is going directly to a State hospital are not clear from the Deputy's question.  If the funds are being paid into a Personal Private Property Account (PPPA) operated by the HSE, then they belong to the individual and to no other person or body including the HSE.  If it is the case that some of the pension is being paid over as part of an individual's contribution under the Fair Deal Scheme, then this is a disbursement of income after tax.  Indeed, the income part of the calculation of an individual's contribution under the Fair Deal Scheme is based on after-tax income.  In any case, there is no exemption from USC where income from any source including an occupational pension is used to meet the costs of long term care in a hospital. 

However, the Deputy will be aware of the income tax relief available on expenditure on the provision of health care.  This includes maintenance or treatment in a hospital for which relief at the standard rate of tax is provided, and maintenance or treatment in a nursing home where on-site 24-hour nursing care is available, for which relief is available at the marginal rate of tax.

Further information in relation to relief for medical expenses is available on the Revenue website at .