Jim O'Keeffe (Cork South West, Fine Gael)
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Question 76: To ask the Minister for Finance if he will review the exclusion of SSIAs from the terms of the DIRT refund scheme whereby pensioners or persons with a disability are entitled to a refund of tax on interest deducted at source. [19430/06]

Brian Cowen (Laois-Offaly, Fianna Fail)
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The SSIAs were introduced in the 2001 Finance Act and give a credit to all SSIA investors of 25%. The aim of the SSIA scheme was to encourage savings. This aim has been successfully achieved with 1.1 million persons availing of the special scheme.

It is widely acknowledged that one of the reasons for the success of the SSIA scheme was its simplicity. It was clearly stated from the very outset that the SSIA investment returns would be subject to a 23% exit tax at maturity with no exemptions for anyone. The information leaflets that were published at that time reflected this position.

Although all SSIA accounts are subject to an exit tax, it should be noted that the SSIA scheme represented a very good deal for all of those taking it up, whether aged 65 and over or not. For example, a person who will have saved €254 per month over 5 years, into their SSIA account, will receive a credit of €3,800 from the Exchequer even before any interest is taken into account.

It should be noted that DIRT on deposit interest was introduced in 1986 and only two reliefs apply, i.e. for those aged 65 or over and for the physically or mentally incapacitated, where the DIRT is deducted by the financial institution on the deposit interest and is refunded if the person claiming the refund is not otherwise liable to income tax on their total income. Thus, it is not a total tax exemption for all those aged 65 or over, or for the incapacitated.