The proposals would allow the relevant agencies to share specified information held by the Department of Works and Pensions on its Client Information Service system.
The aim is to identify and target those most likely to qualify for lone pensioner allowance, disabled persons allowance and the means tested rates relief scheme in order to increase take-up.
The minister said: "On the return of devolution a priority of the Executive was to make a real difference quickly to the most vulnerable ratepayers, and pensioners in particular.
"The introduction of a lone pensioner allowance and an increase in the savings limit applied under the means tested rate relief scheme by April 2008 demonstrated this commitment.
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"However, evidence shows a low take-up of rate reliefs, particularly among pensioners. Therefore, as part of a wider strategy to improve take-up I hope to introduce legislation to give increased data sharing powers to relevant agencies."
"This will allow this information to be used to better target advice towards those most likely to qualify for the various rate reliefs, potentially allowing take-up to increase."
Mr Dodds dismissed calls for the automatic delivery of rating reliefs and allowances.
He said: "This is not possible at present as, taking lone pensioner allowance as an example, no organisation within or even outside government holds reliable data on whether pensioners who are aged 70 and over, live alone.
"What these proposed new powers will do is improve targeting of reliefs and make the verification system easier, with automatic delivery remaining a longer term aim."
Mr Dodds said he wanted as full and varied a response as possible: "I am particularly interested in hearing what people think about the relevant agencies sharing data for the purposes outlined and on what Government can do to reassure them."
"I am committed to taking full account of what local people say before finalising the detail of this new proposal," he added.
The consultation paper provides background to the Executive's decision to examine the possibility of introducing legislation giving increased data sharing powers to relevant agencies.
It also examines what data is to be shared, for what purpose and how it is to be secured.
Views are welcome during the consultation process on the policy detail and the privacy impact assessment. It is expected that the legislation governing the data sharing proposals would be in place by April 2010.
(PR/JM)
