Tax relief on Nursing Home bills

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onekeano

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I have an elderly relative who has been in a nursing home for >18 months now. The cost is around €45,000 p.a. and thankfully the person has a good pension (c. €40,000 p.a.).

I read an article in the Sindo yesterday that tax relief can be claimed at whichever rate of tax applies to that person - I know for a fact that my relative (aged 90+) has no idea about this.

So, a couple of questions - any idea at what income a widow would hit the higher rate of tax? Would it be around €35k / €40k / €45k?

If this person could claim at the higher rate - does that mean they could get €45k @ 41%?

If they claim it this year (2014) can they also claim for 2013 and a portion of 2012?

Any advice would be appreciated.
Roy
 
Hi Roy,

The info should be available here:

Health/Medical Expenses Relief

You may claim tax relief on a Form MED 1, at the standard rate of tax (20%), (with the exception of nursing home expenses for which tax relief is still available at your highest rate of tax) for certain medical expenses incurred by you, on your own behalf or on behalf of another person. Most medical expenses, with some exceptions e.g. routine dental and ophthalmic care, qualify for relief.
You cannot claim relief for any expenditure which has been or will be reimbursed, e.g. by VHI, Laya Healthcare, Aviva Health, etc., or where a compensation payment is or will be made.
For more information see Leaflet IT 6 - Health / Medical Expenses Relief, Form [broken link removed]MED 1 (PDF, 1.14MB) or phone your Regional LoCall number.


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Have yet to claim for last year for parent but I would have thought that this type of claim is similar to any other tax relief insofar as it can be claimed for 4 years back:

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Is there a time limit for claiming refunds?

Yes. Claims for refunds must be made within 4 years of the end of the year to which the claim relates. Claims made after this time cannot be repaid.
 
Hi Onekeano. Firstly, I am assuming that the 40,000 pension includes any State Pension. The approx tax payable on 40,000 would be about x. ( 32,800@ 20%, 7,200 @41%, =9,512. less Credits 2,1900 widow, 1,650 PAYE gives Tax payable of 5,672.

So, in answer to your direct question, this (5,672) is the maximum tax refund they would get,( because that is all the tax they have paid) eventhough they are paying 45,000 pa in care fees.

In order to get full relief on the 45,000 annual fees, one needs 45,000 taxable income at the 41% rate.
 
Sue / Brendan / Mizen, thank you all very much - this is very helpful and appreciated.

Roy
 
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