The following is a summary of the main tax reliefs and credits available to taxpayers aged 65 or over.
Taxpayers aged over 65 years have an entitlement to an age tax credit of €325 if single and €650 if married and either spouse is over 65.
An exemption from income tax of €20,000 for a single person aged 65 years or over or €40,000 for a married couple where either spouse is aged 65 years. There are increases for qualified children.
Rent relief for persons over 65 years. Relief of €4,000 per annum at the standard rate is available for a single person or €8,000 for a married couple or widowed person.
An income levy exemption applies for persons aged over 65 years whose aggregate income for the year of assessment is less than €20,000 or €40,000 in the case of a married couple where either is over 65 years.
DIRT exemption for persons aged 65 years and over.
Where agricultural land is leased by a person aged over 40 years then income up to a limit between €12,000 and €20,000 is exempt from tax.
Age-related tax credit (ARTC) in relation to private health insurance premiums.
The table below sets out the costs to the Exchequer of the aged-related tax reliefs to the extent that they are available for the years indicated.
Tax Relief for Aged Persons over 65
|
Estimated cost to the Exchequer
|
|
€m
|
Age tax credit
|
34 (2007)
|
Age exemption
|
77 (2011)*
|
Rent relief
|
4.4 (2007)
|
Income levy exemption
|
7.5 (2011)*
|
DIRT exemption
|
Not available
|
Leasing of farm land
|
27 (2005)
|
Medical Insurance Premia
|
216 (2009)
|
*Provisional and subject to revision.
The costs for 2011 are estimates from the Revenue tax-forecasting model using actual data for the year 2008 adjusted as necessary for income and employment trends for the year 2011. They are therefore provisional and likely to be revised.
The medical insurance premia tax credit is part of a scheme designed to address the issues covered by the Supreme Court judgment of 2008 that found against the risk equalisation scheme for the provision of private health insurance.
The scheme is two-fold, an age-related tax credit to compensate for the higher cost of insurance for older persons, which is funded by a levy on health insurance companies based on the number of people covered by policies underwritten by them. This scheme is a temporary measure for three years from 1 January 2009 to 31 December 2011. It is intended that it will be revenue-neutral over its duration. Part of the cost of contributions to permanent health benefit schemes is not identifiable as a result of the move to a "net pay" basis for contributions by PAYE taxpayers from 6 April, 2001.