Medical Insurance Relief Query

[AllAboutNumbers]

Hi All-looking for some assistance please.

Myself and my wife are jointly assessed. For the first time in December 2024 my wife’s employer offered Health Insurance. Her own policy was covered by her employer and then an amount deducted weekly by her employer covering myself and our 4 kids. The policies all commenced 1st December 2024.

Now trying to claim Medical Insurance Relief for 2025 and have no clue what to input in the various fields.

In her weekly payslip there was Health BIK €31.01 and then Health Deduction €57.79. In ROS I’m being requested to input below:

1. Gross Amount Paid By Employer - is that purely for my wife’s policy (€1,422.30) as that was the only one they “paid” for or do I put the full amount for the entire family as it was deducted through her payslip so they in essence paid it all?

2. Do I calculate it pro rata from 1st Jan 2025-30th November or put in the full policy amount even through it commenced in 2024?

3. Number of Adults Covered By Policy: 2
Is amount paid for 1st Adult (my wife) €0 or how much the policy was “worth” which was €1,422.30? And then for myself assume I put the full policy amount eg €1,615.80 (I’m paying more as it was my cost time with Health Insurance)? As per above do I base this across Jan-end November only?

Number of Children Covered By Policy: 4
For each assume I put the full policy amount eg €347.40?

Apologies if this is all very obvious but I’ve read all online I could see but still can’t get my head around it so any assistance would be appreciated. Thanks everyone

 

[Ciru75]

Does the employer pay for your wife's insurance with tax on that BIK deducted through her payslip and your wife pay for the insurance for you and the kids with the premium being paid out of her payroll?

1 In that case I think you should only enter your wife's policy (the BIK amount) into the tax return. You should have got the benefit of tax relief at source on the premium for you and the kids.

2 You should enter the 2025 total on the 2025 tax return and add the December 2024 amount to your 2024 return. This will work out better for you anyway.

3 You'll just enter 1 adult and no children as only your wife's insurance hasn't received tax relief at source.

I'm open to correction on how tax relief at source works on insurance being paid through payroll (as opposed to paid by the employer) but this is how I'd expect it to work.

 

[AllAboutNumbers]

Thanks for that-I hadn’t considered the difference between “paid by employer” and “paid through payroll”. I’ve been trying to get through to Revenue to clarify but just says they can’t take a call.

 

[odyssey06]

I hadn’t considered the difference between “paid by employer” and “paid through payroll”. I’ve been trying to get through to Revenue to clarify but just says they can’t take a call.

Your employer's HR \ accounts \ payroll department may be able to clarify that point for you.

 

[Villaines]

Her own policy was covered by her employer

Your wife should have been granted a tax credit of €200. That is the only credit for medical insurance she is entitled to through her tax credit certificate based on what you've said (20% of the first €1,000 of the policy paid for by her employer). She pays BIK at up to 52.2% of the gross policy cost dischargeable by the employer (before deduction of the €200 TRS - tax relief at source on medical insurance).

The credit on the policies for you and your children is granted by way of a reduction in the amount that is paid to the insurer via deduction from her pay.

When the employer pays for it, the tax relief at source is re-grossed so that she suffers maximum BIK.

When it's paid for by the employer, the employer initially pays the Insurer the cost of the policy minus €200 (per adult assuming policy is >€1,000). The employer then must separately pay the €200 credit granted by the Insurer back to Revenue (I don't make this up - even though it sounds crazy). Then your wife has to claim the €200 back from Revenue (or ensure it is granted by Revenue via the tax credit certificate i.e. what you're trying to do. Ridiculously complicated, but they want to apply BIK on the cost of the policy before deduction of credit, "they is hungry little hobbitses" as Gollum might say.

 

[AllAboutNumbers]

Thanks folks-far from straightforward for the novice! Ha! Appreciate all the responses and all the info…..as it turns out she recently left the job so won’t be occurring again in that fashion but good to know so appreciate the steer.