Yesterday, on behalf of the Government, the Minister for Finance introduced the most swingeing and savage budget in years against the background of the Government's decision that every citizen must now pay for its mistakes. Yesterday, I said the country had a surplus of €6 billion two years ago but now is in deficit of almost €15 billion. There are no answers as to where all that money went or how the Government has led us to this point of recession.

In the course of the budget debate yesterday, we learned not only about the Government striking a blow against elderly people by taking away medical cards granted to those over 70 and how middle income families will now get screwed by taxation at every turn of the road, but also about a change in respect of the health expenses relief. The point raised by Deputy Michael Noonan on the health expenses relief requires clarification, as the Taoiseach is aware. Budget 2009 states in page B.6, "Health Expenses relief will be granted at the standard rate only from 1 January 2009, with the exception of nursing home expenses which will be standard rated from 1 January 2010." There is great confusion over this. The Minister for Defence, Deputy O'Dea, said that the intention of Government was to have this rated at the higher rate of tax and not at the standard one. This seems to have been disputed by the Minister for Health and Children and I therefore want the Taoiseach to clarify it. What will the rate be? Will it remain at 41% or will it be reduced to 20%, which will have a devastating impact on families paying for patients in nursing homes, particularly in the Dublin area where charges can be higher than in the rest of the country? The measure is supposed to yield €150 million in a full year.

The marginal rate is available for the course of 2009. The thinking behind what is to happen in 2010 and beyond relates to the review that will take place upon the fair deal scheme coming into play. As the Deputy knows, there are currently families who must pay considerable sums of money and consequently obtain the tax relief. The idea of the fair deal scheme is to treat everyone the same, be they in beds in private nursing homes or public nursing homes. No one in any circumstances under the new fair deal regime will pay more than 80% of his or her income as part of the funding mechanism. The provision should be reviewed in the context of the fact that the fair deal regime with ensure equality of treatment and that comprehensive, uniform criteria will apply to nursing home provision to deal with historic issues.

I asked the Taoiseach about page B.6 of Budget 2009, which states, "Health Expenses relief will be granted at the standard rate only from 1 January 2009, with the exception of nursing home expenses which will be standard rated from 1 January 2010". The fair deal legislation will not take effect until some time next year. Is what I quoted a mistake? Alternatively, is the commitment made by the Minister for Defence, Deputy O'Dea, yesterday and repeated by the Minister for Finance incorrect? In other words, will the higher rate continue to apply and not be reduced to 20% from 1 January 2010?

We do not know when the fair deal legislation will take effect, how it will be amended or the circumstances that will arise between now and its passage. This measure has caused consternation for thousands whose elderly kith and kin are either in or are likely to be in nursing homes. If the measure is to apply at a reduced standard rate, it will cause mayhem among families that will not be able to pay. As Deputy Noonan pointed out yesterday, charges in Dublin can amount to €60,000 per year. They may be somewhat lower in other places around the country.

Is what I quoted from page B.6 a mistake? It should be very clear to everybody that it is a mistake and that the intention of the Government, as outlined by the Minister for Defence yesterday, is that the higher rate of tax in respect of medical expenses relief will continue to apply. The measure in page B.6, if introduced, will affect many thousands of elderly folk and, as a consequence, their families. Will the Taoiseach clarify whether it is a mistake and whether the rate of 41% will continue to apply in respect of medical expenses relief for patients in nursing homes?

As I explained to the Deputy, the measure in page B.6 assumes the full operation of the fair deal legislation by 1 January 2010. The point I am making is that, if the fundamental reform is to take place whereby all in receipt of nursing home care will pay no more than 80% of their income, regardless of whether they are in private or public nursing homes, one will not be able to argue so rigorously that the tax incentive introduced in the first place is required. If the new system were not to be in place, the present marginal rate would remain until the fair deal system became fully operational, at which stage we would review circumstances fully.

There is a decision here. Is it now a review?

This is Leaders' Questions.

I have just explained that this depends on full operation of the fair deal legislation by 1 January 2010.

Explain it to Willie.

That is the situation. In the meantime, as our true intention here is not to cause problems or concerns for people, I am making it very clear that until such time as it is fully operational, there will be no change to the marginal tax relief that is available for nursing home care because there are——

Therefore, yesterday's statement is wrong. We want a straight answer.

No, it is not wrong.

This is Leaders' Questions.

The Deputies are not prepared to allow the clarification to be made because they want to continue with some confusion. There is no confusion.

There is confusion.

The present marginal rate remains in place in respect of nursing home care for those who require it and are eligible for it until such time as the fair deal scheme is fully operational, which is a fundamental reform, as Deputies will know. It is presumed the fair deal scheme will be fully operational by 1 January 2010. We will review the situation and ensure that if it is fully operational, we will consider the changes that can take place, because this will not affect people. They will not be seeking the 41% marginal tax relief at that time because the whole basis upon which their payment is made will change and that will be the same for everyone regardless of whether they are in a private or a public nursing home.

Is it not an optional scheme?