Written Answers – Department of Finance: Budget Measures (18 Feb 2014)
Séamus Healy (Tipperary South, Independent)
205. To ask the Minister for Finance if he will reverse the budget 2014 measure regarding health insurance due to the fact that as a result health insurance premiums have been increased excessively; and if he will make a statement on the matter. [8154/14]
Michael Noonan (Minister, Department of Finance; Limerick City, Fine Gael)
In the first instance, decisions taken to increase the cost of health insurance premiums are made by health insurance providers and are beyond my control. However, it is the case that in Budget 2014 tax relief for medical insurance premiums was 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 cost of Income Tax relief in respect of medical insurance has increased significantly in recent years, estimated at €404 million in 2011, €448 million in 2012 and €500 million in 2013. Despite the increasing cost of the relief, the number of individuals insured has reduced over the same period, while at the same time the level of medical cover has decreased on some policies. Against this background the increase in costs is unsustainable. If the relief were to remain unchanged and the trend was to continue, the cost would increase to approximately €1 billion by 2020.
Prior to this reform the State was effectively paying 20% of the cost of all private medical insurance premiums via the system of income tax relief. In effect this means that those taxpayers who could never afford private health insurance, or who have had to give up their policies due to personal circumstances, are providing financial support via the tax system to those individuals who can afford such insurance.
Although it is true that the restriction of the tax relief may have in some cases, led to a net increase in medical insurance premiums payable by individuals, it should be noted that many would only be affected marginally, depending on the cost of the policies that individuals choose to purchase.
The measure to restrict tax relief in respect of medical insurance premiums was approved by the Dáil via Financial Resolution on Budget night and confirmed by the Oireachtas via the enactment of Section 8 of Finance (No. 2) Act 2013, which was signed into law by the President on 18 December 2013. I have no plans to review the restriction in the short term.
Minister Burton Refuses Healy Request To Restore Fuel Allowances Despite Cold Weather while Minister Rabitte(Labour) Sheds Crocodile Tears for those being Cut Off!
1200 unnecessary deaths on the island of Ireland due to fuel poverty each year
Minister Alan Kelly must intervene now to save lives!
In a reply to a parliamentary question, which I had tabled last week, Minister Burton (Labour Party Deputy leader) refused to restore the cuts in fuel allowances to the old and the poor which she had implemented since coming to office despite the cold weather. To-day, at the energy conference, her fellow Labour Minister cried crocodile tears for those whose heating is being cut off.
At the same conference, academics pointed out once again that there are 1200 unnecessary deaths on the island of Ireland due to fuel poverty each year. The cuts in heating units and in the heating period are cruel and unnecessary.
In my question I had pointed out that the Minister for Finance had told me recently in a reply that the top 1% of income recipients had a gross income of 8.74 billion Euro per year and an average income of €404,000 each and an after-tax income of €249,000 each per year. A tiny tax increase on these would pay for the restoration of cuts in fuel allowances. They would not even notice the change!
In addition the Government claims to be saving 1 billion per year due to the promissory note deal. But like Margaret Thatcher, Minister Burton was not for turning.
This is the centenary year of the formation in Clonmel of a political wing of the trade union movement on the proposal of James Connolly and Jim Larkin. What would they have thought of the actions of the current Deputy Leader?
I call on Minister Alan Kelly, MEP Phil Prendergast, Senator Landy and all Labour Party representatives to force Minister Burton to change her mind immediately and to come to the assistance of those who are shivering in their homes.
Statement By Seamus Healy TD 087-2802199
Workers & Unemployed Action 