The position is that section 466 of the Taxes Consolidation Act 1997 enables an individual to claim the dependent relative tax credit, currently €80 for a tax year if, in that tax year, the claimant maintains at his/her own expense:
(a) a relative of the claimant or of the claimant's spouse, who is incapacitated by old age or infirmity from maintaining himself/herself; or
(b) the widowed father (or the widowed mother) of the claimant or of the claimants spouse, whether incapacitated or not, or
(c) a son or daughter of the claimant living with the claimant on whose services the claimant, by reason of old age or infirmity, has to depend.
Entitlement to this tax credit is conditional on the individual, in respect of whom the dependant relative tax credit is being claimed, not having total income from all sources for the relevant tax year in excess of a sum equal to the specified amount. The specified amount means an amount which does not exceed by more than €280 the maximum contributory State pension to which an individual, not necessarily the dependent relative, would be entitled if s/he were over 80 years, had no dependants, lived alone and was ordinarily resident on an island.
Where two or more individuals jointly maintain a dependent relative, the tax credit is divided between such individuals in proportion to the amounts or value of their respective contributions towards the maintenance of that individual. Information on the cost to the Exchequer and the numbers of claimants availing of the dependent relative tax credit relief is available for the income tax years 1998 to 2006 inclusive, the most recent year for which final data is available. The relevant figures are shown in the following table.
Dependent Relative Tax Credit
Year Ended 5th April or 31st December as specified
|
Numbers of Claimants
|
Estimated Cost of Tax Credit
|
|
|
€m
|
05/04/1998
|
22,100
|
1.1
|
05/04/1999
|
21,000
|
1.1
|
05/04/2000
|
20,200
|
1.1
|
05/04/2001
|
17,800
|
1.2
|
31/12/2001
|
17,800
|
0.8
|
31/12/2002
|
16,600
|
1.1
|
31/12/2003
|
16,000
|
1.1
|
31/12/2004
|
15,700
|
1.05
|
31/12/2005
|
15,200
|
1.02
|
31/12/2006
|
15,500
|
1.4
|
The numbers availing of the credit represent income earners who were in a position to absorb at least some of the dependent relative tax credit and thereby give rise to an Exchequer cost. They do not include the numbers of potential claimants whose entitlements to other tax credits were sufficient to reduce their liability to tax to nil. The numbers availing are rounded to the nearest hundred, as appropriate. A married couple who has elected or has been deemed to have elected for joint assessment is counted as one tax unit.