TDs’ second home perk faces chop

[Ah Well]

Source: Sunday Independent 5th April 2009

Ministers claimed €1m for city pads

A CONTROVERSIAL tax loophole that has allowed Cabinet ministers to claim almost €1m in allowances to fund second homes in Dublin is facing the axe.
Under the scheme, government ministers from outside the capital were effectively paid by taxpayers to buy a second home in the city.
The Department of Finance has confirmed that the “dual abode allowance”, which has cost taxpayers €935,883 since it was introduced in 1997, has been placed under review.
Last year alone, 16 ministers received, on average, €5,500 each to help them pay their mortgages on second homes in Dublin.
Both Taoiseach Brian Cowen and Tanaiste Mary Coughlan qualify for the allowance because they are elected to rural constituencies. In Mr Cowen's case, he would have qualified to make a claim every year since 1997.
Spokespersons for both the Taoiseach and Tanaiste did not respond to a request for comment this week.
The new figures show that the allowance has been used by a succession of Fianna Fail ministers and junior ministers to pay a mortgage on a second home in Dublin. It may even have been used to rent or pay hotel accommodation.
However, a spokesman from the Department of Finance confirmed last week that: “All TD allowances have been placed under review.”
In the first year of the tax relief, 1998, 19 ministers and ministers of state claimed €160,570, the highest amount claimed to date.
This had fallen to €88,335, claimed by 16 ministers in 2007, the last year for which figures are available.
Under the 1997 legislation, a minister or minister of state who owns a Dublin property and uses it as a second home can claim the allowance up to the value of their mortgage. Costs associated with buying the home can also be claimed.
On top of this, the officeholder is also entitled to choose either an annual lump sum payment of €6,500, or have their maintenance costs, such as lighting, heating repairs and insurance, paid by the State.
If the minister or minister of state is renting accommodation, the office-holder can claim an allowance equivalent to the actual cost of renting the accommodation as well as choosing between an annual €4,500 lump sum or having the cost of maintaining the accommodation covered.
The Act also stretches to hotel room costs. Where the office-holder is staying in a hotel, the allowance will be equivalent to the actual cost of room rental. Even where an office holder is using the home of a relative or a friend as his second residence, the minister or minister of state can still claim € 3,500 per annum under the Act.

[Watcher1]

Too right to have it scraped. I thought a better solution would be to call those houses into the ownership of the state, since we the taxpayer have been paying for them. I do fear now though, if the allowance is scraped it will be replaced by something else, probably costing more. I am surprised it has "only" cost 1M since 97.

[orbit]

I seriously question the rationale behind some of these cuts. The amounts aren't that great, and they seem justified to me, that is unless they plan to move the Dáil to Mullingar. It would be far simpler to just cut their basic salaries. This stuff is just window dressing to make it look like they are taking a hit.

[Watcher1]

I seriously question the rationale behind some of these cuts. The amounts aren't that great, and they seem justified to me, that is unless they plan to move the Dáil to Mullingar. It would be far simpler to just cut their basic salaries. This stuff is just window dressing to make it look like they are taking a hit.

I agree. While it is good that they seem to be cutrting the perks, being selective ensures it is only window dressing. I've heard reports that a mandatory 10% salary cut will be announced for politicians, that in itself is only window dressing too especiall;y against the harsh realities being experienced outside of political circles.

To "share/feel the pain" TD's salaries should get choped by 40-50%, Taoiseach should not be paid more than 150K, Tainaste - 140, Minister for Finance - 130 and other ministers 100.

And I think that might be a little generous given our current situation.

[Wakeupcall]

I agree. While it is good that they seem to be cutrting the perks, being selective ensures it is only window dressing. I've heard reports that a mandatory 10% salary cut will be announced for politicians, that in itself is only window dressing too especiall;y against the harsh realities being experienced outside of political circles.

To "share/feel the pain" TD's salaries should get choped by 40-50%, Taoiseach should not be paid more than 150K, Tainaste - 140, Minister for Finance - 130 and other ministers 100.

And I think that might be a little generous given our current situation.

I agree... 40 - 60% cut across the political board!