Dáil Éireann díospóireacht -
Wednesday, 2 Feb 2000

Vol. 513 No. 4

Written Answers. - Tax Allowances.

Denis Naughten

Ceist:

151 Mr. Naughten asked the Minister for Finance the plans, if any, he has to give additional allowances to either parents or siblings caring for an intellectually disabled child in view of the fact that the child puts an increased financial burden on the family concerned while at the same time reduces the demand for expensive residential care; and if he will make a statement on the matter. [2797/00]

Minister for Finance (Mr. McCreevy)

The current tax system has a number of personal income tax allowance which are related to the care of incapacitated or disabled individuals. These are the incapacitated child allowance, the dependent relative allowance, the tax allowance for the employment of a carer, medical expenses relief and covenant relief.

The incapacitated child allowance can be claimed by a parent-guardian for a child who is permanently incapacitated. Where more than one child is permanently incapacitated, an allowance may be claimed for each child.

The employment of a carer allowance: The allowance for employing a carer for an incapacitated person applies at the taxpayers marginal tax rate for expenses up to £8,500 per annum. Prior to 1999 this tax allowance was only available if a tax payer employed a carer to care for either the incapacitated tax payer or his or her incapacitated spouse. However, in the 1999 Finance Bill I introduced a major widening of the scope of this allowance. The allowance is now available to family members who employ a carer in respect of a totally incapacitated person. This means that a number of family members can now share the cost of employing a carer and share the allowances between them subject to the overall ceiling of £8,500 in any one year. In addition, carers can now be employed on an individual basis or through an agency.

Medical expenses relief is available for un-reimbursed medical expenses and is of particular benefit to those with regular medical expenses and is available to those individuals who incur expense of more that £100 per annum or for families who incur expenses of more that £200 per annum provided these expenses are not reimbursed by any other agency, health board, insurance company, etc. There is no upper limit on what can be claimed and the relief is also available at the taxpayers marginal rate of tax. A taxpayer can claim medical expenses relief on behalf of himself/herself, his/her spouse and children and his/her dependent relatives.

Income tax relief at the marginal rate is also available for those who covenant income to certain individuals. Unrestricted tax relief can be claimed on covenants in favour of permanently incapacitated minors other than from parents to their own minor incapacitated children. Unrestricted tax relief can be claimed on covenants in favour of permanently incapacitated adults.

I announced on 8 December 1999 that the Government had decided to bring forward a £3,000 per annum tax allowance at the standard rate of tax in respect of those spouses of one income families who work at home caring for children, aged and the handicapped. Full details of this relief will be set out in the Finance Bill and the details will be widely publicised at that stage.