Disabled driver fund 'abused by relatives'
Published 19/07/2010 | 05:00
THE cost of the disabled drivers' scheme has reached almost €500m in the past decade amid fears that unscrupulous relatives are exploiting the "family rule".
The scheme allows people with a disability to avoid up to €9,525 in VAT and VRT when buying a new car -- and their relatives can claim up to €15,875 if they are the main carer.
But while the number of disabled drivers claiming the relief increased by 43pc during the boom years, the number of relatives entering the scheme soared by 82pc.
A Revenue source said some of the successful claims by relatives were extremely tenuous -- such as claiming to be the sole driver for a disabled family member living at the other end of the country.
There are also concerns among officials that some relatives may be claiming for disabled family members who are living in nursing homes-- and therefore getting very little benefit from the vehicle.
The criteria for entry to the Disabled Drivers and Disabled Passengers Tax Concessions scheme had been tightly controlled before 2001 due to the value of the benefits -- which also include free road tax and 2,728 litres of tax-free fuel a year.
But the Revenue source said the criteria been relaxed following a ruling by the then Ombudsman, Kevin Murphy, in 2001.
The ruling had led to a steep rise in the number of relatives joining the scheme. Although there is a 'residency' requirement for relatives to be living with the disabled person, the Revenue can waive this in "exceptional circumstances".
The cost of the disabled drivers scheme to the taxpayer over the past decade was €472m -- and the annual cost has climbed steadily from €27m in 2000 to a high of €68m in 2008.
The cost of exemptions from motor tax alone was €8m in 2008.
There are strict medical tests in place for disabled drivers to join the scheme. They have to show they are severely and permanently disabled, or have the medical condition of dwarfism.
The number of disabled drivers admitted to the scheme rose from 380 in 2003 to 543 in 2008 -- an increase of 43pc. But the number of passengers increased by 82pc in the same period -- from 924 in 2003 to 1,690 in 2008.
The numbers of drivers and passengers admitted to the scheme dropped to 428 and 1,046 respectively last year -- as new car sales collapsed.
That led to the first drop in cost for 10 years -- down from €68.3m in 2008 to €48m last year.
The Department of Finance estimates there are around 9,600 people currently benefitting from the scheme. The annual value to each person is estimated at €5,500.
In 2001, Mr Murphy successfully intervened on behalf of three carers refused the tax concession for their disabled passengers on residency issues.
A Revenue spokesman said it monitored all such schemes carefully. "Of course, we would examine any evidence of abuse anyone wishes to provide. But I would have to say that it is not Revenue's view that the scheme is being widely abused," he said.