What are the income exemption limits for incapacitated people?

According to DE1 persons aged 65 or over whose income is below the Exemption Limit can open a DIRT free account.

According to DE2 , people who are permanently incapacitated and who are earning less than the exemption limits are exempt from DIRT.

But IT1 lists exemption limits only for people aged 65 or over. It does not mention permanently incapacitated people.

I presume it's the same limits, but I don't understand why they don't mention incapacitated people in IT1?

Or does the exemption limit only apply to incapacitated people over the age of 65? Which would be pointless as capacitated people over 65 get the exemption anyway.

OK, I think I understand it now. There isn't an income exemption limit as such for incapacitated people. According to Citizens Information

People with disability

You can get your deposit interest paid without the deduction of DIRT or a DIRT refund, if you are:

• Permanently incapacitated from maintaining yourself and
• Your tax credits (including your spouse's) for the year exceed the tax that would be chargeable on your (and your spouse's) income for the year.

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So a single person with a tax credit of €1650 and no other income would be able to earn up to €1650 in DIRT before paying DIRT?

But a single person with no other income other than deposit interest, would presumably get a social welfare payment?

It's the tax chargeable rather than the tax credit so it's 8,250 not 1650.

Means assessed social welfare payments are not generally taxable so wouldn't affect calculations.

Sybil

Hi

Can you point to the specific legislation in TCA 97 where it says that incapacitated people must be earning less than the exemption limits to get a refund. S267 (1) specifies that an incapacitated person or persons over 65 are relevant persons. S267 (3) goes onto specify that relevant persons would be entitled to repayment of the tax but does not specify income limits. S2561A specifies income limits for over 65's but not for incapacitated persons.

I am finding it hard to link it all together and this was the only thread I could find about it.

thankyou

swiggy said:

Can you point to the specific legislation in TCA 97 where it says that incapacitated people must be earning less than the exemption limits to get a refund.

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Hi Swiggy,

Those who are permanently incapacitated could be either over or under 65.

Under 65s are prohibited from claiming a DIRT refund, even where their taxable income (on gross income including gross interest) is reduced to nil by their tax reliefs.

Section 267(3) exempts from this prohibition, the permanently incapacitated irrespective of their age, who would be due a refund because of either their tax reliefs or exemptions.

Thanks Sophrosyne

From my understanding S267(3) specifies that they can claim a refund if they are entitled to but where does it mention the tax reliefs and exemptions that entitles them to claim the refund? I am having difficulty finding this in S267 (3) or indeed any other section.

S256A1 specifies that over 65's (no mention of incapacitated persons) income must not exceed a specified amount. S2561B then goes onto say that an incapacitated person can claim relief if they are entitled to it but no mention of how they would be entitled to it?

The legislation seems to specify income limits for the over 65's but where in the legislation does it specify income limits for incapacitated persons?

Swiggy

Hi Swiggy,

I think you may be looking for some sort of exemptions that refer only to the permanently incapacitated. There are none.

Section 267(3) refers to normal tax credits and exemptions.

The exemptions for over 65s, obviously also apply to a person who is over 65 and permanently incapacitated and so, there is no difference.

In the case of under 65s:

Let’s say A is single and aged 24.

His gross income is 15,000 + gross deposit interest of 500, which suffered 205 DIRT

Tax payable 15,500 @ 20% = 3,100

Let’s say his tax credits for 2014 are:

Single & PAYE Credit 1650 + 1650 = 3,300

Since his tax credits exceed his tax payable, he is not liable for income tax but cannot claim a refund of the DIRT paid, unless he is permanently incapacitated.

Many thanks Sophrosyne

So I am not going mad! There is no specific exemption for incapacitated people. The person in question is my uncle who is over 65 and incapacitated and is above the income threshold. I know he is not exempt being merely over 65 but am looking to see if he could be exempt because he is also incapacitated. But I have to take it that the legislation that applies to over 65s also applies those who are over 65 and incapacitated.

Hi Swiggy,

I used only two tax credits as an example in my last post. However, your uncle would also be entitled to the Age credit, €490 and to relief for any non-reimbursable health expenses he may have incurred.

This link to Revenue’s website provides - on the left-hand panel - information for Persons with a Disability and under Change in Circumstances click and scroll to Older Person.

Great, thanks for all your help.