Michael Lowry (Tipperary, Independent)
Link to this: Individually | In context | Oireachtas source

358. To ask the Minister for Finance concerning the current rate of tax concessions associated with tax relief for health insurance premiums, the present tax relief available is equivalent to the lesser of the following: 20% of the policy's cost or 20% of €1,000 which is equivalent to a maximum €200 credit, given the increased cost of health insurance premiums and as this tax concession currently stands at the basic income tax rate of 20%, would he consider reinstating it to the higher rate of 40% tax relief; and if he will make a statement on the matter. [16644/23]

Fergus O'Dowd (Louth, Fine Gael)
Link to this: Individually | In context | Oireachtas source

370. To ask the Minister for Finance if consideration will be given to a proposal regarding restoring a tax concession (details supplied); and if he will make a statement on the matter. [16672/23]

Louise O'Reilly (Dublin Fingal, Sinn Fein)
Link to this: Individually | In context | Oireachtas source

371. To ask the Minister for Finance in relation to health insurance policies for older people, if (details supplied) has been considered. [16850/23]

Michael McGrath (Cork South Central, Fianna Fail)
Link to this: Individually | In context | Oireachtas source

I propose to take Questions Nos. 357, 358, 370 and 371 together.

The position is that section 470 of the Taxes Consolidation Act 1997 (TCA 1997) provides for tax relief in respect of payments made to authorised insurers under relevant contracts in respect of medical insurance and dental insurance.

Qualifying medical insurance policies can be for health insurance, dental insurance or health and dental insurance combined.

Generally, tax relief is given as a reduction on the cost of the policy. This is known as tax relief at source, and under this treatment policy holders pay a reduced premium to the medical or dental insurer (i.e. pay the net of tax relief amount) and the authorised insurer makes a claim to Revenue for the tax relief granted at source to the policy holder.

Tax relief for medical insurance premiums is provided at the standard rate of income tax, of 20 per cent.   The relief available is equal to the lesser of (a) 20 per cent of the cost of the policy or (b) 20 per cent of €1,000 per adult or €500 per child insured.  

It should be noted that a child for the purpose of this credit is a child under 21 years of age in respect of whom a child premium has been paid.

The current 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.  In addition, despite the increasing cost of the relief, the numbers insured were estimated to have reduced by around 150,000 over the same period, while at the same time the level of medical cover had decreased on some policies. Against this background the increase in costs was unsustainable. 

It is important to point out that the ceilings introduced in Budget 2014 ensured a level of continuing support via the tax system for those who purchased 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.

Section 470B TCA 1997 previously provided for an age-related tax credit in the case of payments made for medical insurance policies renewed or entered into on or after 1 January 2009 but before January 2013, where the payment was in respect of an insured person aged 50 years or more. However, the Risk Equalisation Scheme, introduced from 1 January 2013 replaced this tax credit.

Furthermore, it should be noted that tax relief in respect of medical insurance has always applied at the standard rate of tax, it has never been granted at the marginal rate of income tax and I have no plans to enhance the tax relief.

Finally, as the Deputies may be aware, the Commission of Taxation and Welfare recommended that in the context of the implementation of Sláintecare relief for private health insurance should be phased out over time. Further details are set out in the Commission’s report - www.gov.ie/en/publication/7fbeb-report-of-the-commission/