Health Insurance Fairdeal - rental income expenses/medical expenses

[AQuery]

Hi,

Does it seem reasonable that the expenses associated with a rental property should be taken into consideration when calculating the fair deal contribution? The expenses are taken into account when calculating the tax liability, so it would seem to me that they should also be taken into account when calculating the FD contribution.
The complicating factor is that the expenses are variable.

When I queried this, I was told that they are not taken into account, but I can appeal this.

The same question applies to medical expenses. My father has private health insurance (the cost of which is not considered in Fair deal contributions, even though it is a considerable cost). With his medical issues, he has had a lot of medical costs, most of which is not covered by the private medical insurance. While previously he could at least get 20% back on his tax, he will now have no tax to recover as all of it will be offset against his nursing home fees.
Again, when I queried this, the response was that it is not included, but can I can go through the appeals process etc.

Has anyone had any experience with these sort of questions, or advice to offer please?

thanks.

 

[Slim]

Hi,

Does it seem reasonable that the expenses associated with a rental property should be taken into consideration when calculating the fair deal contribution? The expenses are taken into account when calculating the tax liability, so it would seem to me that they should also be taken into account when calculating the FD contribution.
The complicating factor is that the expenses are variable.

When I queried this, I was told that they are not taken into account, but I can appeal this.

The same question applies to medical expenses. My father has private health insurance (the cost of which is not considered in Fair deal contributions, even though it is a considerable cost). With his medical issues, he has had a lot of medical costs, most of which is not covered by the private medical insurance. While previously he could at least get 20% back on his tax, he will now have no tax to recover as all of it will be offset against his nursing home fees.
Again, when I queried this, the response was that it is not included, but can I can go through the appeals process etc.

Has anyone had any experience with these sort of questions, or advice to offer please?

thanks.

I agree it doesn't seem reasonable but the scheme allows for the outstanding mortgage to be offset against the value of the rental property for calculation of the 7.5% contribution. The expenses are taken into account for tax purposes(75%) alright.

Private health insurance is not deductible under the FD scheme. The 80% contribution of income is ongoing so any medical expenses incurred by your dad will be payable from his savings which will reduce and as a result, not be assessed. I suggest that you get the income reassessed every year to reflect the reduced savings. This, in its own way, will offset the expenses, at least until his savings reduce to €36,000.

As you say, any payment by your father towards the nursing home fees will be tax deductible. In the absence of specific amounts, it's difficult to estimate how this will work for him.

You can, of course, appeal as you have been told but this is unlikely to succeed as the scheme is very strict in what is allowed and what is not. Telling you that you can appeal is useful to get you out the door or off the phone.