Relief is available at the standard rate on medical/health expenses. Nursing home expenses qualify for relief at the marginal rate. The person who incurs the expenses may claim the relief.
Relief is not available where the expense is covered by health insurance or another sources.
Revenue published detailed guidelines as to what expenses are or are not allowed. Qualifying health expenses, include
- expenses in relation to the services of a medical practitioner;
- diagnostic procedures carried out on the advice of a medical practitioner;
- maintenance and treatment incurred in connection with the services of a practitioner or such diagnostic procedures;
- drugs and medicine supplied on prescription of a practitioner;
- physiotherapy, prescribed by a practitioner;
- orthopaedic treatment prescribed by a practitioner;
- transport by ambulance;
- supply of medical, surgical and dental appliances on advice of a practitioner;
- maternity care;
- cost of educational and psychological assessments and speech and language therapy services for children
- certain expenses for kidney patients and children suffering from serious life-threatening illnesses;
- non-routine dental and ophthalmic treatment;
- nursing home fees for full time (24 hours) care; After 2010 this was extended to nursing home fees generally
A practitioner includes a medical practitioner, a dentist or person with equivalent qualification abroad.
The expenses need not be incurred in Ireland. If it is only available abroad, travel and accommodation costs may also be allowed.
Where persons have particular serious illnesses indirect expenses such as travel overnight accommodation for parents costs of certain products and expenses may also be available. Revenue publish detailed criteria.
Routine ophthalmic treatment and routine dental treatment are excluded. Routine ophthalmic treatment includes sight testing, advice on spectacles, lens and their repair and the purchase of glasses.
Routine dental treatment covers extraction, scaling, and filling of teeth and the repair of artificial teeth and dentures. Certain orthodontic veneers crowns and wisdom teeth work qualify as nonroutine and may be claimed using MED2 form
Cosmetic surgery and equivalent procedures are excluded, unless they are necessary to improve a physical deformity arising from personal injury, congenital abnormality or a disease. Certain procedures are permitted provided that they are shown to be necessary by medical prescription or otherwise as the particular treatment requires.
Nursing Home Expenses
Nursing home expenses are allowable at the marginal rate. See the separate section.
Nursing home expenses are allowable as a medical expenses. The nursing home must be a full-time nursing home with care on site. The fact that the claimant may also be indirectly subsidised by the fair deal scheme does not affect the credit.
The nursing home must be a full-time nursing home with care on site. The fact that the claimant may also be indirectly subsidised by the fair deal scheme does not affect the credit.
Private Health Insurance
Formerly tax relief was given for medical and dental non-routine insurance policies. This relief is re now deducted at source and the Revenue give a deduction of 20% directly to the insurer. The insurer receives the equivalent of the tax credit from
Revenue and the policy holder pays the net amount. The taxpayer gives his tax number to the insurer who reclaims the sum concerned.
Relief is given at the standard rate. Therefore, if the taxpayer pays €80, Revenue pay an additional €20.
The relief is for health insurance policies entered with an entity authorised to provide health insurance in Ireland or under EU rules, with or without their own establishment in the State. It is available in respect of certain policies taken out by persons resident in other EU states at the time it was taken out, which would not otherwise qualify.
In 2009, an additional credit was given for a person aged over 50 years, at the date of renewal. It increased from a credit of €200 for persons between 50 and 60 years old, €500, for persons aged 60 to 70 years old, €975, for person aged 70 to 80 years old and €1250 for persons aged over 80 years old. The rates vary depending on the date the contract was entered. The credit is given as source.
The Finance Act 2011 changed the age-related tax credit for private health insurance payments The credit was increased for those between 60 and 69, €625, those between 70 and 79, €1275 and those over age 80, €1725. The tax credit for individuals aged 50 to 59 was abolished.
A ceiling is introduced on premiums for insurance against illness expenses. It is restricted to €1,000 per adult and €500 per child. The effect of the provision is to cap relief at €200 and €100 respectively for children and adults.
Now Relief at Source
The standard rate tax relief at source is net of any ‘‘risk equalisation credit’’ under the health insurance risk equalisation scheme. It ensures that following the commencement of the risk equalisation scheme, the correct tax relief at source is granted in respect of medical insurance premiums paid by individuals.
Tax relief at source for health-insurance premiums is limited to the premium, net of tax credits under the risk equalisation scheme under the Health Insurance Act.
Employers who pay a premium on behalf of employees, effectively pay it net of tax due to the tax relief at source mechanism. Tax relief at source is clawed back as employers are obliged to self-assess and pay Revenue income tax on the premiums.
This is allowed as an additional deduction so that employers are placed in the same position, as if they had paid the premiums gross to the insurers. It is treated as a benefit in kind on which the employee is liable to income tax at the marginal rates.
There is tax relief for qualifying insurance policies which cover long-term future needs in the event of being unable to perform two activities of daily living or severe cognitive impairment. Relief is granted at source. The policy must be for benefit of the taxpayer and his family.