Should my 86 year old mother in nursing home be paying tax?
- Thread starter mcriot29
- Start date
The 80% is on net income, so after tax. Also, the basic principle of the nursing home loan/fair deal is that you pay out of your after tax income.
Note the bit about Deductions in the HSE page on it:
https://www2.hse.ie/services/schemes-allowances/fair-deal-scheme/financial-assessment/#income
Deductions you can subtract from the financial assessment include:
Edit: A basic calculation on a tax calculator indicates that your mother should not be paying much tax of any kind anyway, given her ages exempts her from PRSI, and her basic tax credits should shield her from most or all of any 20% PAYE, leaving only USC.
Note the bit about Deductions in the HSE page on it:
https://www2.hse.ie/services/schemes-allowances/fair-deal-scheme/financial-assessment/#income
Deductions you can subtract from the financial assessment include:
- Income tax, PAYE, Universal Social Charge and PRSI.
Edit: A basic calculation on a tax calculator indicates that your mother should not be paying much tax of any kind anyway, given her ages exempts her from PRSI, and her basic tax credits should shield her from most or all of any 20% PAYE, leaving only USC.
Note also that the payor may claim tax relief on the amount paid to the nursing home (from own income and assets) which then means you get a tax refund but that may be zero if the tax is already negated by non-refundable credits.
Tax Relief Available
Section 469(2)(b) TCA 1997 provides that individuals who avail of financial support
under the Fair Deal Scheme may claim income tax relief in respect of any
contributions paid for nursing home care based on their own income and assets.
If the contribution is paid by another individual (such as a relative), that individual
will be entitled to relief instead.
Amounts covered by the HSE do not qualify for tax relief in accordance with section
469(2)(c) TCA 1997
Tax Relief Available
Section 469(2)(b) TCA 1997 provides that individuals who avail of financial support
under the Fair Deal Scheme may claim income tax relief in respect of any
contributions paid for nursing home care based on their own income and assets.
If the contribution is paid by another individual (such as a relative), that individual
will be entitled to relief instead.
Amounts covered by the HSE do not qualify for tax relief in accordance with section
469(2)(c) TCA 1997
Just for illustrative purposes. The PRSI calculation is probably incorrect since she's most likely exempt from PRSI.
