Nursing home charges tax relief - help with calculation

[The Ghoul]

I have posted about this before but am still stuggling with the calculations. If this is the wrong forum for this maybe a moderator could move it. I have a relative who may need a nursing home. If this happens, both of us may be paying the nursing home charge and claiming tax relief.

Let's say the nursing home costs 50k per year.

For simplicity I will just look at my own payslip for now. I am a single, Class A public servant.

Gross pay 55.9k
Pension levy 3.6k
Pension contribution 1.9k
Spouse/children contribution 835
PAYE 9.6k
USC 3k
PRSI 2.2k
Union contributions 260

That leaves me with a net pay of about 34k. I am frugal and have no rent or mortgage and need about 15k to live comfortably.

So if I don't claim any tax relief I have 19k to contribute towards the nursing home cost of 50k. The calculation I need assistance with is - if I DO claim tax relief how much will I be able to pay towards the nursing home and still leave myself with 15k net.

Thanks

 

[Joe_90]

Lets say your taxable income is €50k you have €16,200 (€50,000 - €33,800) taxable at 40% and the balance taxable at 20%.

So if you claim the €19,000 you will get a refund of €16,200 x 40% and €2,800 x 20% in Income Tax = €7,040.

So you contribute €19,000 + €7,040 + €1,760 (20% Tax relief on €7,040 regrossed) = €27,800

 

[The Ghoul]

Very helpful post - thanks Joe_90.

I want to plan ahead for nursing home care and compare tax relief with the Fair Deal etc. From previous experience, if the thinking about the financial aspect is left until the person actually needs a nursing home, it becomes much more stressful for all involved.