Section 465 of the Taxes Consolidation Act, 1997, provides for an incapacitated child tax credit of £238 for the short tax year 2001. The tax credit can be claimed by a parent or guardian in respect of a child who: is under 18 years of age and is permanently incapacitated by reason of mental or physical infirmity – a child under 18 is regarded as permanently incapacitated by reason of mental or physical infirmity only if the infirmity is such that if the child were over 18 there would be a reasonable expectation that he/she would be incapacitated from maintaining himself/herself, if over 18 years of age at the beginning of the year of assessment, is permanently incapacitated by reason of mental or physical infirmity from maintaining himself or herself and had become so permanently incapacitated before reaching 21 years of age or becomes permanently incapacitated after reaching the age of 21 but while still in full-time education or while training for a trade or profession for a minimum of 2 years.
Where a claimant has more than one incapacitated child, a tax credit may be claimed for each child. The legislation provides that where the claimant is not the parent of the child, he or she must have custody of the child and must maintain the child at his or her own expense in order to qualify for the incapacitated child tax credit. Generally speaking, foster parents are paid a weekly foster care allowance from the relevant health board for the maintenance of each child being fostered. This currently amounts to £200 per week for a child under 12 years of age and £220 per week for a child aged 12 or over. In those circumstances the foster parent could not be regarded as maintaining the child at his or her own expense and is not eligible to claim the incapacitated child tax credit, even if the foster parent has custody of the child.