On Sunday April 23rd the Sunday Business Post reported that the Irish Professional Mediators’ Organisation have called on the Minister for Justice to lower the VAT rate on family mediation services and family law services, to at least 9%.

In 2019 Róisín O’Shea and Shane Dempsey, the current Chair and Treasurer of the IPMO, made a submission to the Joint Oireachtas Committee for Equality & Justice on reform of the family law system. In that submission they included a proposal that the VAT rate on family mediation should be reduced from 23% to no more than 9%. A journalist from the Sunday Business Post came across this 2019 proposal and reached out to ask if the Government had taken any steps to action this suggestion. The Board of IPMO had previously discussed calling again on the Government to consider this idea and last week the Board made a submission to the Minister for Finance Michael McGrath TD proposing that the State provide support to families who are going through the breakdown of a relationship or marriage by reducing Value Added Tax on family mediation fees and family law services.

Those who need the services of a family mediator, and a family law solicitor are individuals rather than businesses and therefore cannot reclaim VAT on their fees. At the current rate of 23% this is almost a quarter on top of the fees charged.

It is also the case that the majority of people engaging in mediation to agree parenting, child/spousal maintenance, and terms for separation or divorce will also need the services of a family law solicitor before they enter into a legally-binding mediation settlement or separation agreement. Therefore, separating families currently pay VAT at a rate of 23% for both their mediator and solicitor, substantially increasing the total costs. This extra cost likely depresses demand for mediation of marital separation, which the government is actively trying to promote as an alternative to litigation.

Lowering the VAT rate for both family mediation and family law services to at least 9% would have an immediate beneficial effect on the thousands of families experiencing marital separation, which are already impacted by the cost of living crisis.

IPMO looks forward to discussing this proposal further with the Minister.

The link to the Sunday Business Post article is below: 

https://www.businesspost.ie/news/couples-divorcing-should-be-spared-penal-vat-charges-mcgrath-told/