Section 467 of the Taxes Consolidation Act provides for an income tax deduction in respect of the cost of employing a person to care for an incapacitated person.
Where an individual proves that, throughout the tax year a relative is totally incapacitated by physical or mental infirmity, and the individual has employed a person to care for the incapacitated person, an income tax deduction equivalent to the cost of employing the carer, subject to a maximum of £10,000 in a full year or £7,400 in the current short year, may be claimed. A relative includes a relation by marriage and a person in respect of whom the claimant is or was the legal guardian. The carer may be employed on an individual basis or through an agency.
Where a number of individuals are incurring the cost of employing the carer in respect of any one incapacitated person, the income tax deduction is apportioned between them on the basis of each individual's contribution.
The cost of employing a carer is not a health expense for the purposes of section 469 of the Taxes Consolidation Act. The MED 1 form is used to claim tax relief on health expenses. It cannot be used to claim the deduction for employing a carer. A form for claiming the deduction for the employment of a carer can be obtained from the tax office.