Brendan Griffin (Kerry, Fine Gael)
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328. To ask the Minister for Finance his views on a matter (details supplied) regarding health insurance; and if he will make a statement on the matter. [28709/17]

Paschal Donohoe (Dublin Central, Fine Gael)
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Considerations relating to the cost of hospital admissions are a matter for my colleague the Minister for Health, Mr. Simon Harris T.D.  With regard to tax relief for medical insurance premiums, income tax relief is provided at the standard rate of income tax, currently 20%, and is restricted to the first €1,000 per adult and the first €500 per child insured.  Any portion of premium paid in excess of these ceilings no longer qualifies for tax relief.

The ceilings on the premium values qualifying for tax relief were introduced in Budget 2014 as the cost of the tax relief had increased significantly in the years leading up to this change.  The Exchequer cost was €404 million in 2011, €448 million in 2012 and was projected to reach €500 million in 2013 if no policy change were made. Furthermore, despite the increasing cost of the relief, the numbers insured were estimated to have reduced by approximately 170,000 over the same period, while at the same time the level of medical cover decreased on some policies. Against this background the increase in costs was unsustainable. 

The ceilings introduced in Budget 2014 ensure a level of continuing support via the tax system for those who purchase medical insurance policies, while reducing Exchequer exposure to more expensive policies. The relief is provided at source, which ensures that individuals on lower incomes can receive the full benefit of the available relief.

The Commission on Taxation in its 2009 report recommended the retention of medical insurance relief but that it should be limited. I am satisfied that the introduction of an upper ceiling on the amount of a medical insurance premium that can qualify for tax relief achieves this recommendation, and it is not intended at this time to revert to a system of unlimited tax relief.