Dáil Éireann - Volume 529 - 06 February, 2001
Written Answers. - Tax Allowances.
Ms Shortall Ms Shortall
147. Ms Shortall asked the Minister for Finance the consideration he has given to the introduction of a disabled tax-free allowance in order to assist people with disability to live independently and in recognition of the hidden extra living costs which are incurred over and above those of an able-bodied person (details supplied); and if he will make a statement on the matter. [3220/01]
Mr. McCreevy Mr. McCreevy
Minister for Finance (Mr. McCreevy): The Deputy will be aware that the overall budget tax measures will substantially improve the net income position of taxpayers. The major tax improvements of general application are: the increase in the personal allowances of £800 single-£1,600 married to £5,500 single-£11,000 married; the widening of the standard band to £20,000 single, £29,000 married one earner and £40,000 married two earners; and the 2% reductions in both the standard and top income tax rates.
However, there are a number of other tax-free allowances available in respect of people with disabilities. These are the incapacitated child's allowance, the dependant relative allowance, and the allowance for employment of carer for an incapacitated person. In addition, there are a number of further tax measures from which disabled persons can benefit.
Section 469 of the Taxes Consolidation Act, 1997 provides for tax relief in respect of various defined health expenses. The disabled drivers scheme, details of which are set out in the Disabled Drivers and Disabled Passengers (Tax Concessions) Regulations, 1994, (SI No 353 of 1994) provide valuable benefits to those severely and permanently disabled persons who qualify under its term. Under the scheme, a new car may be purchased every two years free of VAT and vehicle registration tax, subject to certain monetary limits. In addition, the annual road tax is not charged and the qualifying person is eligible for the provision per annum of 2,728 litres of road fuel free of excise duty.
The VAT Act, 1972, as amended, provides for the application of a zero rate of VAT on a range of medical equipment and appliances for example, hearing aids. Certain disabled persons may be entitled to a refund of VAT for certain  equipment which is not zero rated under the VAT (Refund of Tax) Order (No. 15) 1981 (SI No 428 of 1981). Further information on operation of this order is available from Revenue Commissioners VAT Repayments (Unregistered Section), Kilrush Road, Ennis, County Clare.
Income arising from the investment of compensation payments made by the courts to those who are totally and permanently incapacitated is free from income tax. There is a special exemption from income tax in respect of income derived from leases for incapacitated farmers.
As the Deputy will appreciate, I receive numerous requests, many from very worthwhile causes, for the introduction of new reliefs or the extension of existing ones. Tax reliefs by their very nature reduce the tax base and make general reform of the tax system much more difficult. Government policy in recent years has been to reduce the burden of taxation to reward effort and to improve the incentive to take up employment. This has benefited all taxpayers.
Dáil Éireann 529 Written Answers. Tax Allowances.