Michael McGrath (Cork South Central, Fianna Fail)
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203. To ask the Minister for Finance the cost of allowing the full adult ceiling of €1,000 for private medical insurance qualify for tax relief at 20% for all adults aged 21 years and over, regardless of whether they are availing of a reduced premium; and if he will make a statement on the matter. [10126/15]

Michael Noonan (Limerick City, Fine Gael)
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As the Deputy may be aware, I recently announced my intention to amend tax relief for medical insurance premiums for young adults from 1 May 2015 on foot of changes introduced under the Health Insurance (Amendment) Act 2014, which provides that those aged between 21 and 25, can avail of reduced premium rates below the full adult price and that those aged between 18 and 20 can avail of a child's premium price, should an insurer choose to offer such reduced premiums.

With a view to ensuring consistency between health legislation and the tax code in relation to medical insurance and with the intention of keeping the tax relief for medical insurance premiums as simple as possible, I have decided to allow the full adult ceiling of €1,000, or the relevant premium where this is lower, for tax relief at 20%, for all adults aged 21 and over, regardless of whether they are availing of a reduced premium. I am retaining the child ceiling of €500 for those aged 18 to 20 that are continuing to avail of insurance at the child premium rates.

The Revenue Commissioners have agreed to operate the changes on an administrative basis pending the provision of the underpinning legislation as part of the next Finance Bill. Therefore, the changes will be effective for all policies purchased or renewed (or which come into effect) on or after 1 May 2015.

The current regime for tax relief on medical insurance premiums provides a maximum tax relief ceiling of €500 in respect of a child, which is defined as an individual under the age of 18 years or, if over 18 years of age and under 23 years of age, who is receiving full-time education and in respect of whom a child premium is paid.

It is important to note that it is not compulsory for insurers to offer child premium rates to young adults under the current system and it will not be compulsory for them to offer reduced premiums under the new system. Therefore, where a full adult premium is payable, the full adult ceiling for tax relief of €1,000 has always been available and this will continue to be the case. It should be further noted that the maximum tax relief is available at the rate of 20% of the premium payable or €200, whichever is lower. Thus, where a reduced premium is being availed of, the full adult ceiling for relief may not be employed depending on the premium price.

The Revenue Commissioners tentatively estimate that the cost of extending the full €1,000 adult ceiling for private medical insurance tax relief to all persons aged 21 or over, would be approximately €1 million.

This provisional estimate is based on returns to Revenue for the year 2013 (the most recent year for which data is available) and does not take account of any changes in the level of medical insurance coverage or premium rates in the interim.