Michael McGrath (Cork South Central, Fianna Fail)
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The Disabled Drivers and Disabled Passengers Scheme provides relief from VRT and VAT on an adapted car, as well as an exemption from motor tax and an annual fuel grant.

The Scheme is open to severely and permanently disabled persons as defined, as a driver or as a passenger and also to certain charitable organisations. In order to qualify for relief, the applicant must hold a Primary Medical Certificate issued by the relevant Principal Medical Officer (PMO) or a Board Medical Certificate issued by the Disabled Driver Medical Board of Appeal. Certain other qualifying criteria apply in relation to the vehicle, in particular that it must be specially constructed or adapted for use by the applicant.

To qualify for a Primary Medical Certificate an applicant must be permanently and severely disabled by satisfying at least one of the following medical criteria that is set out in legislation, in order to obtain a Primary Medical Certificate:

• be wholly or almost wholly without the use of both legs;
• be wholly without the use of one leg and almost wholly without the use of the other leg such that the applicant is severely restricted as to movement of the lower limbs;
• be without both hands or without both arms;
• be without one or both legs;
• be wholly or almost wholly without the use of both hands or arms and wholly or almost wholly without the use of one leg;
• have the medical condition of dwarfism and have serious difficulties of movement of the lower limbs.

My Department and I share concerns that the Disabled Drivers and Disabled Passengers Scheme (DDS) is no longer fit-for-purpose. The Government is considering proposals to replace the DDS.

The final report of the National Disability & Inclusion Strategy Transport Working Group's review of mobility and transport supports including the DDS, endorsed proposals for a modern, fit-for-purpose vehicle adaptation scheme in line with international best practice that would replace the DDS.

The Working Group was chaired by Minister Anne Rabbitte and led by the Department of Children, Equality, Disability, Integration and Youth (DCEDIY).

Access to transport for people with disabilities is a multifaceted issue that involves work carried out by multiple Government departments and agencies. Under the aegis of the Department of Taoiseach officials from relevant Departments and agencies are meeting to discuss the issues arising from the NDIS report and to map a way forward.

Department of Finance officials are proactively engaging with this group's work as an important step in considering ways to replace the DDS, as one specific personal transport response, in the context of broader Government consideration of holistic, multifaceted and integrated transport and mobility supports for those with a disability. Four meetings of the group have been held, in July, November, December 2023; and March 2024.

The Department of Finance submitted a note to the group with my approval in mid-January 2024. This note outlines a proposal for a replacement scheme for the DDS which would be a needs-based, grant-led approach for necessary vehicle adaptations that could serve to improve the functional mobility of the individual. This proposal is in line with what the National Disability Inclusion Strategy Transport Working Group Report endorsed. The note was considered at the March 2024 meeting.

In that context, any further changes to the existing DDS would run counter to NDIS proposals to entirely replace the scheme with a modern, fit-for-purpose vehicular adaptation scheme.

Finally the Deputy should be aware that while my Department has oversight of the DDS, it does not have responsibility for disability policy, so any decision to put in place a new scheme to replace it will be a matter for Government.

Michael McGrath (Cork South Central, Fianna Fail)
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Section 22 of Finance Act 2022 removed the difference in treatment between PRSAs and occupational pension schemes in relation to the funding rules, by abolishing the Benefit-in-Kind (BIK) charge on employer contributions to an employee’s PRSA. In addition, employer contributions to an employee’s PRSA are no longer counted towards an employee’s age related and salary percentage limits on tax deductible contributions. These changes were recommended by the Interdepartmental Pension Reform and Taxation Group (IDPRTG) with a view to improving and simplifying the pension landscape in Ireland.

I can confirm that my Department did receive a paper from the organisation referenced by the Deputy in summer 2022 which related to the relevant recommendation of the Interdepartmental Group on Pensions and Tax Reform: “The differential treatment of PRSAs for funding purposes should be abolished and employer contributions to PRSAs should not be subject to BIK” .

When considering the appropriate way to implement the IDPRTG recommendation, removing the BIK limits for PRSAs was examined in detail, and the paper referred by the Deputy fed into these considerations.

As PRSAs do not require employer contributions and are not subject to the two-thirds final salary funding limit that is imposed on OPSs, it was clear that removal of BIK for employer contributions would result in PRSAs having less restrictions on employer contributions, albeit still subject to the overall tax relieved limit of €2 million (the Standard Fund Threshold).

Some alternative options were explored: an additional separate BIK limit for employer contributions to PRSAs; and a new PRSA product mimicking the salary-based limits on occupational pension schemes, to be used where an employer wished to make contributions to an employee’s PRSA. However, both these options were ultimately rejected.

While an additional BIK free limit for employee and employer contributions could result in an effective equalisation for most individuals, given the low levels of contributions, the rules for tax treatment of contributions would not be equalised and it was considered unlikely to be seen by stakeholders as meeting the recommendation of abolishing differential treatment of PRSAs. It would introduce new rules into an already complex legal and regulatory framework.

A PRSA product that tried to mimic the additional salary-based controls for OPS, in line with the submission referenced by the Deputy, would be the closest to complete equalisation of the tax treatment of contributions and was also considered. However, it was seen as over-complex, difficult to implement in practice and not aligned with the overall policy goal of simplification of the pension landscape.

Therefore, the decision was made to proceed with a proposal to fully remove the BIK charge for employer contributions to a PRSA in order to continue to work towards the overall goal of simplifying and harmonising the pension landscape.

In relation to tax planning, I am informed by Revenue that there is a continuous focus on compliance across pensions, identifying and confronting non-compliant behaviour across schemes. This is in line with Revenue’s Corporate Priorities 2024 commitment to comprehensively use the full suite of interventions set out in their Compliance Intervention Framework to assist voluntary compliance and to provide an appropriate response to non-compliance.