'Use tax-dodge money to pay for nursing home charges'

The money recovered from tax-evading insurance investors should be ring-fenced to pay for the overcharging of nursing home patients, it was claimed today.

Fine Gael TD Michael Noonan said the ongoing Revenue Commissioners investigation into single premium insurance payments could net hundreds of millions of euro in unpaid taxes.

“I believe that it is reasonable that the costs of meeting the State’s liability in relation to the illegal nursing home charges are met by a one-off windfall for the Exchequer, on foot of a tax dodge investigation, rather than by the ordinary compliant taxpayer,” he said.

The Revenue Commissioners’ investigation, which began last January, is focusing on large lump-sum investments which people made in single premium insurance policies.

More than €33bn was invested in the policies between 1988 and 2001.

Mr Noonan, who is the head of the Dail Public Account Committee, said he had received information that people were using the policies to invest “black economy” cash and avoid declaring it for tax purposes.

He said that with around €1.5bn being raised from the DIRT tax inquiry, the Ansbacher investigation and others, there was reason to believe that the current investigation could lead to a windfall for the state.

“This money should be ring fenced and used to meet some or all of the costs associated with the repayment of illegal nursing home charges,” he said.

The Supreme Court found last month that medical card holders were illegally charged for nursing home fees over a 30-year period.

The overall compensation bill may be up to €1bn.