Committee Reports > List of Committees > Dáil > 1979 > Committee of Public Accounts > Interim and Final Report - Appropriation Accounts 1977

APPENDIX 8

HEALTH CONTRIBUTIONS

S 72/19/78.

19 Meitheamh, 1979

An Rúnaí,

An Coiste um Chuntais Phoiblí.

I am directed by the Tánaiste and Minister for Finance to forward herewith for the information of the Public Accounts Committee details of the collection of health contributions since 1971/72, prepared by Department of Health, as requested in paragraph 34 of the Report of the Committee on the Appropriation Accounts 1975 and referred to in paragraph 25 of the Report of the Committee on the Appropriation Accounts for 1976.

C. K. McGRATH,

An Roinn Airgeadais.

Assessment of Liability of Farmers for the Payment of Health Contributions and Overall Situation in relation to Collection of Health Contributions

Position as regards assessment of liability of farmers for the payment of health contributions under the Health Contributions Acts, 1971 to 1978

1. The assessment of farmers in regard to liability to pay health contributions under the Health Contributions Acts, 1971 to 1978, and the difficulty of compiling and updating an accurate register has posed many problems for Health Boards. For example, the establishment of a comprehensive register of farmers with liability to pay health contributions has been complicated by a number of factors.

2. The position as regards liability under the Health Contributions Acts, 1971 to 1978, was that, in general, adult persons whose yearly means were, in the opinion of the chief executive officer of the appropriate Health Board, derived wholly or mainly from farming and whose farm valuations were not more than £60 were required to pay health contributions unless they were exempted from liability to pay contributions, for example, by reason of being holders of medical cards. Since there was no lower limit as regards valuation in connection with the determination of liability to pay contributions and since the circumstances of the land holder were also a relevant factor, it was difficult for Health Boards to determine a suitable base valuation level which while excluding medical card holders, and others entitled to claim exemption from liability to pay contributions, did not at the same time exclude others who had a liability to pay health contributions. As a result demands were issued to persons who were found subsequently to be holders of medical cards and also to others who were entitled to claim exemption. Many farmers were found on investigation to be either not liable to pay contributions at all (because they had full eligibility for health services) or to be paying health contributions as part of the social insurance stamp.

Data regarding levels of collection

3. The data included in the attached tables is based on the actual totals of demands as issued in each year by the Health Boards and not on the position as might be corrected later following investigations. The real position as regards collection rates should be better than is shown in the tables. As information is not available, however, as to the effect of the corrections to their registers made later by the Health Boards it is not possible at this point to quantify the improvements in the collection rates which would result if the total value of the demands issued were based on the registers as revised for each year.

4. The approximate level of collection for all Health Boards for the years 1972 to 1977 based on the total demands made works out at 70.3% approximately. The statement as regards arrears is based on the total demands issued at the beginning of each payment period. As already mentioned, detailed information is not readily available to reflect the revised position as regards arrears due on the basis of the revised registers but the final position for each year should represent an improvement on the arrears position as indicated in the table.

5. It will be noted from the tables dealing with individual Health Boards that while the over-all position in certain instances has been improving, in other instances there appears to have been a falling off. In the case of the Western Health Board the chief executive officer reported to the Department that it is part of the Board’s policy to allocate a contributor’s payment against his oldest debt. The effect of this approach has been to improve the collection data for the earlier years at the expense of recent years. It might be noted also that in the case of the Western Health Board the percentage of the population in possession of medical cards is high (61.1% in 1978). This could account in part for the more unfavourable collection rate in the case of the Western Health Board because of the difficulties mentioned earlier connected with the issuing of demands for the payment of health contributions.

Steps being taken to improve on collection rates generally

6. In accordance with the provisions of the Health Contributions Act, 1979, and the regulations made thereunder farmers will be obliged to pay health contributions not only in respect of farming land occupied by them but also in respect of other income, subject to a ceiling for liability purposes which is at present fixed at £5,500 per annum. Health Boards will be responsible for the collection of health contribtuions from farmers, other than “excepted farmers” who will be assessed for liability purposes by the Revenue Commissioners. It was considered necessary in the light of the new circumstances provided for in the Health Contributions Act, 1979, to examine the existing systems for assessment and collection purposes so as to effect an over-all improvement in this area. A Working Party has been established to examine the over-all systems relating to the collection of health contributions by Health Boards. This Working Party is representative of the Health Boards and the Department. Among the matters being considered by the working party are:—

(a)the difficulties which arise in practice in the working of the existing system and the steps that can be taken to minimise those difficulties,

(b)the establishment of standardised procedures in relation to—

(i) the assessment of liability,

(ii) the updating and computerisation of registers.

(c)the review of systems for the collection of arrears and the question of prosecuting in the event of failure of individuals to pay health contributions.

When the review has been completed and revised systems have been effectively established the result should be a strengthening of the existing systems and an improved collection rate.

7. The Health Contributions Act, 1979, provides for increased penalties in cases of failure to pay health contributions for which individuals are liable. Section 12 (2) of the Act provides that persons found guilty of failure to meet their obligations in regard to payment of health contributions shall be liable on summary conviction to a fine not exceeding £500. The penalty provided for in the Act of 1971 was £100.

The attention of Health Boards has been drawn in a circular letter issued by the Department to the necessity for Health Boards to take all appropriate steps to ensure that the assessment and collection function is efficiently discharged and their attention was also directed to the provisions of section 12 of the Act of 1979 in regard to the penalties which may be imposed by the courts on defaulters.

Collection of Health Contributions

Summary Table

Eastern Health Board

Midland Health Board

Mid-Western Health Board

North-Eastern Health Board

North-Western Health Board

South-Eastern Health Board

Southern Health Board

Western Health Board