Fairness and college grants
A GOVERNMENT decision to subject third-level maintenance grants to a new capital asset test for farmers and the self-employed is generating strong resistance within the agricultural community. Intense lobbying of rural Fine Gael TDs, and meetings with Ministers, have taken place in recent months as the Irish Farmers’ Association has argued that the inclusion of productive assets in such assessments would show “a complete bias against farmers and the self-employed”.
The reality is somewhat different. As things stand, Government cutbacks in third-level education have been compensated for through the imposition of higher registration fees. Students receiving maintenance grants do not pay such fees. As far back as 1993, the De Buitléir report found these groups easily avoided paying third-level fees by declaring lower income levels for the qualifying years. As a consequence, fee-paying students from PAYE families frequently find themselves in the company of well-off, grant-aided colleagues. Such inequity should not be allowed to persist.
Just what the Government intends to do is unclear. Before the last budget, Minister for Education and Skills Ruairí Quinn announced that from 2013, the value of some capital assets would be taken into account, in addition to income, in assessing means. But a decision on what assets will qualify has yet to be taken. In that regard, the Minister commissioned an inter-departmental report that will be discussed at Cabinet next month. In the interim, the political temperature can be expected to rise as TDs worry about retaining their seats in a smaller Dáil chamber.
There is more at stake here than access to education grants. As the Government moves towards the imposition of a broad-ranging property tax, farmers are extremely concerned that agricultural land might, once again, be subjected to a form of rates. Urban businesses have continued to pay rates since the abolition of the household charge in 1977. But farmland has been exempted because of the absence of an accurate valuation system. The introduction of a new capital assets test would be regarded as a dangerous development.
Providing education grants for asset rich/income poor families is justifiable. But many full-time farmers and self-employed people manipulate their incomes to ensure their children qualify. Their behaviour may be no different from wealthy individuals who avail of tax breaks and engage in aggressive tax avoidance. That does not mean, however, that such obvious loopholes should not be closed. The ability of farmers to minimise their tax liabilities was starkly exposed in 2008 when the then minister for agriculture Brendan Smith revealed that full-time farmers, with average incomes of €43,900, paid average annual income tax of €1,895.
This campaign contains the same kind of ingredients that fuelled opposition to the septic tank charge. It is socially divisive and comes perilously close to advocating a civil disobedience-style “won’t pay” response. It is not a challenge the Government can avoid.