Thanks for your reply Sahd.
I've looked at the exemptions for the Local Property Tax & the Household Charge and there does seem to be a difference, as you said.
The LPT states: A property previously occupied by a person as his or her sole or main residence that has been vacated by the person for 12 months or more due to long term mental or physical infirmity. An exemption may also be obtained where the period is less than 12 months, if a doctor is satisfied that the person is unlikely at any stage to return to the property. In both cases, the exemption only applies where the property is not occupied by any other person.
(Note: Where a property is owned by more than one person, the owners are jointly and severally liable for the payment of the tax. Therefore, this exemption would not apply if the property in question was jointly owned with others.)
The Household charge states: Residential property where a person has to leave their house due to long-term mental or physical infirmity (e.g. a person that has moved into a nursing home).
"Long term mental or physical infirmity" is defined in the legislation as an infirmity requiring the person to vacate the property in which he/she had been dwelling for a continuous period of more than 12 months and that is certified as such by a registered practitioner.
There's no mention of occupancy being relevant to the Household Charge and as our query is in relation to it, my mother-in-law should have been exempt and Revenue shouldn't be looking for collection of the arrears.