Eoghan Murphy
Question:32. Deputy Eoghan Murphy asked the Minister for Finance his views on allowing elderly persons to claim health care costs, including health insurance premiums, against their tax and USC. [52048/13]
View answerWednesday, 4 December 2013
Questions (32)
Written answers
Firstly, I would point out that persons aged 65 and over can avail of the age tax credits or the age exemption limits. For the years of assessment 2013 and 2014, in order to qualify for the income tax exemption a single individual’s income must be less than €18,000 or in the case of a married couple or civil partners, €36,000. These exemption limits are increased by €575 in respect of each of the first 2 qualifying children and by €830 in respect of each subsequent qualifying child living with the claimant.
In addition, section 469 of the Taxes Consolidation Act 1997, provides for income tax relief in respect of qualifying expenses incurred in the provision of health care in a tax year against the income tax paid by an individual for that year.
Health care is defined as the prevention, diagnosis, alleviation or treatment of an ailment, injury, infirmity, defect or disability, and includes care received by a woman in respect of a pregnancy. It does not include routine ophthalmic treatment, routine dental treatment, or elective cosmetic surgery.
Relief at the standard rate of income tax is available to all taxpayers, regardless of age for such expenses where they have not been reimbursed under a medical insurance policy. However, the cost of maintenance or treatment in a nursing home, which provides 24-hour nursing care on-site, is available at the claimant’s marginal rate of income tax.
Further details in relation to relief for health expenses are set out in leaflet IT6 which is available on the Revenue website at http://www.revenue.ie/en/tax/it/leaflets/it6.html
Tax relief is also provided at the standard rate of income tax, regardless of age, for medical insurance premiums paid to cover a range of medical expenses. Since 2004, the relief also covers premiums paid on dental insurance policies for non-routine dental treatment. For the payments to qualify for relief, they must be made to an authorised insurer listed in the Register of Health Benefit Undertakings, established under the Health Insurance Act 1994.
Since 2001, the relief is granted under a tax relief at source system to all holders of medical insurance irrespective of whether or not they have a tax liability to offset the value of the relief. The subscriber pays the premium net of tax relief and the insurer obtains a refund of the relevant amount from the Revenue Commissioners.
As you will be aware, from 16 October 2013, tax relief for medical insurance premiums has been restricted to the first €1,000 per adult and the first €500 per child insured. Any portion of premium paid in excess of these ceiling will no longer qualify for tax relief. The new ceilings will ensure continuing support via the tax system for those who purchase standard policies, while reducing Exchequer exposure to more expensive policies.
It should be noted that there is no relief against Universal Social Charge for either health expenses or medical insurance premiums. However, it should be noted that payments from Department of Social Protection such as the State Pension are exempt from the Universal Social Charge (USC). In addition, individuals aged 70 and over, provided their total income does not exceed €60,000, are not liable to the top rate of charge and payments from the Department of Social Protection will not be taken in to account in determining if an individual has exceeded the €60,000 threshold.