Tax proposal to keep junior doctors in Ireland
Details obtained by the Irish Examiner show three departments — Health, Finance and the Taoiseach — are examining the detailed proposal, which could be implemented as soon as next year’s budget.
Under the potential policy switch put forward by individual medics and Fine Gael senator Colm Burke, the State has been asked to write off interest rate repayments against income tax for recently qualified junior doctors who entered the profession through the Graduate Entry Programme.
The programme was set up in 2006 to encourage people, who have qualified in other sectors, to undergo a four-year course to retrain as doctors, with the aim of widening diversity among medics and encouraging those best suited into the profession.
However, with yearly college fees of €16,000 and additional living costs, 60% of the estimated 400 new graduates from the scheme per annum had to take out loans of €60,000-€100,000 in order to take part.
The significant financial support has to be repaid within 10 years, with a 7.33% interest rate applying — costing €1,178 a month.
While experienced doctors’ salaries are high, the average starting pay for a junior doctor per month stands at €2,114 net.
Medical unions have warned the issue is pushing a large number of graduate entry programme doctors to choose better-paid roles in Australia and Canada as a way to address the financial difficulty — with 33% of EU medical graduates who emigrate coming from the relatively small programme.
Speaking to the Irish Examiner, Mr Burke said the emigration issue is putting an already overstretched health service under increasing strain.
While he admitted the €5m annual cost of writing off the interest rate repayments against new doctors’ income tax may lessen the likelihood of public support, he insisted it will ultimately save the State money and ensure standards are not further depleted in the health service.
“The basic salary of a first year NCHD [junior doctor] is €31,000 per annum before tax.
“Most NCHD’s were able to earn additional income from overtime and cut in basic salary was not a real issue. However, because of the full implementation of EU Working Time Directive, that earning capacity has decreased.
“These doctors cannot now service the repayments on their loans because of the huge reduction in income. If the issue is not addressed many more Irish medical graduates will leave,” he said.
The Government senator, who has been an outspoken advocate of junior doctor issues for a number of years, added that a similar policy is already in place for developers who build student apartments.
Under existing policy, the capital costs of these facilities can be written off against the developer’s income tax.
The Departments of Health, Finance and the Taoiseach are considering the proposals and are due to make a decision within the coming weeks.
