Saturday 1 October 2016

Valentine's Day massacre when Kenny made sure farm assets wouldn't count when it came to education grants

Education Minister Jan O'Sullivan is right politically not to pursue the idea, says John Walshe, who recalls how the Taoiseach's representatives made sure such a plan stayed off the Cabinet agenda when it was previously mooted

John Walshe

Published 23/08/2015 | 02:30

Former Education minister Ruairi Quinn
Former Education minister Ruairi Quinn

Hard-pressed PAYE workers who went to college years ago still rail about the children of the well-off who got a higher education grant - usually the offspring of farmers, vintners or other self-employed. When their grant money arrived, it was time to celebrate and they seemed to do so with gusto at the taxpayer's expense.

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The rules have been tightened up since, but the belief is still out there that some groups are able to finesse the system by reducing their 'reckonable' income in the year before their children go to college in order to help them qualify. Grants are awarded on the basis of family income, and for PAYE workers it's easy to calculate whether or not they are above the income limit. For others, it can be a bit harder to work out - which is where the suspicion of unfairness arises. Every year there are still the apocryphal stories of farmers' or vintners' children getting grants while the children of the farm labourer and bar staff cannot. In Irish society, perception is all.

Then there is the question of whether or not assets such as second homes, luxury boats, big pension pots, huge savings, land etc, should be taken into account. Over two decades ago a group chaired by Donal de Buitleir published a report saying that "the means test is defective in that it fails to take full account of ability to pay - particularly since it ignores the accumulated wealth of individuals. Some people with clearly expensive lifestyles obtain grants while others, who are hard-pressed, lose out."

It recommended changes, including the introduction of a capital assets test, a radical idea that provoked inevitable opposition from farming groups but support from many trade unions, PAYE workers and the Labour Party.

The idea surfaced again last week when figures were published showing that a lower proportion of students in urban areas get grants compared with those in rural counties, particularly along the western seaboard. The Irish Farmers' Association was quick off the mark with Tom Doyle, chair of its farming business committee, saying it made "perfect sense" because average farm income was less than €24,000. "On a lot of farms, there is no outside income. Their income is at such a low level it is inevitable that they would qualify, and should qualify, for a grant," he said.

Political reaction was muted - nobody really wants to upset the farmers in the run- up to the election. Besides, all the parties know Fine Gael won't wear any discussion on farming assets being taken into account. They remember what happened when former minister Ruairi Quinn tried to introduce a capital assets test. He was particularly exercised when I, as his special adviser, gave him documentation showing how a farmer with €300,000 in the bank was able to legally declare such a low income that his daughter easily qualified for a grant. The family's details obviously could not be revealed for data protection reasons, but the information was genuine and had been passed on to us by an official dealing with applications who was enraged over the ease with which some people could still get grants.

Quinn managed to get provision for a capital assets test tucked away into the Coalition's first budget in late 2011. In the hurly burly and frenetic discussions leading up to that budget, it was barely noticed by Fine Gael. It got through Cabinet with a promise from Quinn to come back with an implementation plan for approval. The intention was to introduce the test for those starting college in 2013, but Fine Gael advisers were to ensure that it never happened.

An inter-departmental committee was set up and drafted proposals for a scheme - it was not a unanimous report as the Department of Agriculture representative consistently opposed farming assets being considered. This never got to Cabinet and it took ages to get the issue discussed at adviser level between ourselves and the Taoiseach's representatives at what turned out to be a very heated meeting. They made it clear that Fine Gael would not accept any version of a capital assets test that included farming assets. It's the Taoiseach's prerogative not to allow proposals go on the Cabinet agenda, and it was obvious from his advisers that capital assets was not a runner, not then, and not in the lifetime of this Government.

Whatever her views, the current Education Minister Jan O'Sullivan has decided not to pursue it and politically she is right - it's not going to happen. She is well aware of what transpired at that memorable meeting of advisers on February 14, 2013, when the whole idea was killed off by Fine Gael. Not for nothing was the meeting described afterwards as the 'St Valentine's Day Massacre'.

John Walshe was special adviser to former education minister Ruairi Quinn

Sunday Independent

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