Thursday 19 September 2019

The Grey Budget: Alliance demands supports for elderly

New levy on cuckoo funds also being proposed

Finian McGrath: Met with Finance Minister Paschal Donohoe. Photo: Gareth Chaney, Collins
Finian McGrath: Met with Finance Minister Paschal Donohoe. Photo: Gareth Chaney, Collins
Hugh O'Connell

Hugh O'Connell

Cuts in inheritance tax, a bereavement grant and unpaid leave for workers to look after elderly parents are being demanded by ministers ahead of the Budget.

The Irish Independent can reveal that a new levy on cuckoo funds is also among the list of measures being put forward by the Independent Alliance, which has a particular focus on the "grey vote".

It has also proposed revising the Fair Deal nursing home scheme to incentivise the elderly to rent out or sell their unoccupied homes.

The proposals are set out in a draft policy discussion document prepared ahead of Budget talks with Finance Minister Paschal Donohoe.

Cabinet ministers Shane Ross and Finian McGrath, along with Minister of State Kevin 'Boxer' Moran, met Mr Donohoe for initial Budget talks on Wednesday.

Alliance sources acknowledged not all of the measures would be possible in the Budget, with Brexit looming.

The document also concedes that a previously proposed levy on insurance company profits may have "unintended negative consequences" - including that it would be passed on to consumers, deter insurers from entering the Irish market or prompt existing insurers to leave.

The document sets out a proposal to introduce a 10pc levy on investors buying multiple new properties. The measure would target so-called cuckoo funds, which include large institutional investors such as pension funds, private rental firms and real estate investment trusts (REITs).

TD Maria Bailey leaves the Fine Gael parliamentary meeting in Cork yesterday. Photo: Niall Carson/PA Wire
TD Maria Bailey leaves the Fine Gael parliamentary meeting in Cork yesterday. Photo: Niall Carson/PA Wire

"The levy could be of the order of 10pc of the combined prices of each multiple purchase with the proceeds ring-fenced for suitable purposes such as building social housing," the document states.

The Alliance is also proposing an increase in the threshold at which inheritance tax is levied from €320,000 to €350,000 - which would cost €20m. The Alliance secured a €10,000 increase in the threshold in Budget 2019.

It is also calling for the reinstatement of the €850 bereavement grant to help families with funeral costs, or at a minimum a grant of €500. The grant was abolished by former social protection minister Joan Burton five years ago.

The document also lays out an uncosted proposal to radically revise the Fair Deal nursing home scheme, making it more attractive for elderly people to either rent out or sell their home while in care.

Under the plans, nursing home residents who rent out their property would retain 80pc of rental income, which would be subject to tax. "There is currently little incentive for nursing home residents to rent out their unoccupied homes as the terms [of Fair Deal] provide that 80pc of any rental income must be paid to the State," the document says.

It also proposes extending protections that apply to family homes under Fair Deal - where the financial contribution toward care is capped at 7.5pc of the property's value for a maximum of three years - to cash proceeds generated from selling the property.

Other proposals include a new law that would entitle workers to take a maximum of two weeks' unpaid leave to look after an elderly parent subject to "certification from a doctor that such care is medically necessary".

Meanwhile, Mr Donohoe has played down the likelihood of a €10 hike to carbon tax in the upcoming Budget.

Despite being advised by his own officials he should start to increase the tax on fossil fuels, Mr Donohoe - who discussed the issues with his colleagues at the Fine Gael think-in yesterday - appears reluctant to move too quickly in that direction.

Last year he failed to add anything to the rate of €20 per tonne of CO2 following a backlash from rural TDs within his own party.

Irish Independent

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