Dáil Éireann Debate, Tuesday - 25 September 2012
130. Deputy Seán Kyne asked the Minister for Finance if consideration will be given, in view of the increased challenges a person with a disability faces to obtain employment, to the extension of the revenue job assist tax allowance into a more long term tax allowance which would support persons with a disability in employment; and if he will make a statement on the matter. [40631/12]
Amharc ar fhreagraSections 472A and 88A of the Taxes Consolidation Act 1997 provide for the Revenue Job Assist scheme, which allows qualifying employees, in addition to their normal tax credits, to claim certain income deductions, including additional deductions for qualifying children, for a three year period after taking up employment. The scheme also permits employers to take a double deduction for the salary of the employee when calculating profits for the purpose of taxation. This incentive applies in respect of individuals who have been unemployed for at least 12 months and are in receipt of a specified social protection payment or, who are in a category approved for the purposes of the scheme by the Minister for Social Protection with the consent of the Minister for Finance. Disability benefit and disability allowance are both qualifying payments for the purposes of this scheme.
The scheme is designed to help the long-term unemployed get back into paid employment by helping to ensure that the income earned from that employment is greater than could be obtained by staying on welfare payments. The additional income deductions are gradually reduced over the three year period.
To amend the scheme such that the disabled would retain access to the additional income deductions in perpetuity would go beyond the objectives of the scheme.
I would point out that if an individual is in receipt of certain disability payments, they may be allowed to do work or training and keep their payment or part-payment on the grounds that it is considered rehabilitative or therapeutic.
People with disabilities are, in general, liable to pay tax on their incomes in the same way as everyone else. The tax system does however provide additional tax credits and exempts certain incomes from tax for persons with disabilities of a permanent nature.
Anyone who is permanently incapacitated either physically or mentally, where he or she is unable to maintain himself or herself, may be able to claim one or more of the additional tax credits available. In addition, parents/guardians and persons who care for dependent relatives may also qualify for some of the relevant tax credits, which are set out below:
Incapacitated Child Tax Credit - can be claimed by a parent in respect of a child who is permanently incapacitated either physically or mentally from maintaining himself or herself and had become so before reaching 21 years of age or finishing full-time education or full-time training for a trade or profession. (Leaflet No. IT18 - Incapacitated Child Tax Credit )
Note: One Parent Family Tax Credit may also be claimed by a single parent (whether widowed, separated, deserted, single or divorced) with an incapacitated child. This credit can be claimed regardless of whether you have already claimed the incapacitated child tax credit. (Leaflet No. IT9 - One-Parent Family Tax Credit)
Blind Person’s Tax Credit -is due to a person who is regarded as blind. If two people, who are regarded as blind, are married, they can each qualify for this tax credit. (Leaflet No. IT35 - Blind Persons’ Tax Credits & Reliefs)
Employed person taking care of an Incapacitated individual - an incapacitated person who employs someone to care for himself, herself or a relative can claim for the cost of the employment. (Leaflet No. IT47 - Employed person taking care of an Incapacitated individual)
Covenants - relief is available in respect of a properly drawn up Deed of Covenant in favour of a permanently incapacitated individual. However, parents cannot covenant to a permanently incapacitated minor child i.e. under 18 years of age and unmarried. (Leaflet No. IT7 - Covenants to Individuals
Medical Expenses Relief - is available in respect of un-reimbursed nursing home, doctors’, hospital and other health expenses. (Leaflet No. IT6 - Health / Medical Expenses Relief)
The following sources of income and gains are exempt from Income Tax and Capital Gains Tax for people with incapacities, provided they are included in their annual return of income:
Deposit Interest Retention Tax (DIRT) - if you are permanently incapacitated or over 65 years of age you could be entitled to a refund of DIRT deducted, provided your gross income is exempt from tax or is marginally over the exemption limit. (Leaflet No. IT8 - Tax Exemption & Marginal Relief)
Leasing of Farmland - rent from farmland can be exempt if you are permanently incapacitated from carrying on the trade, provided certain conditions are met.
Payments to or in respect of Thalidomide Persons Payments made by the Department of Health and Children or the Hilfswerk Für Behinderte Kinder Foundation are exempt from income tax. Also exempt is any income arising from the investment of these payments, for example deposit interest, rental income, dividend income, etc. With effect from 1 January 2004, any gains arising from the disposal of assets acquired with such payments or with such an investment is exempt from Capital Gains Tax.
Personal Injury Compensation Payments Certain compensation payments received are exempt from Income Tax. Also exempt is income arising from the investment of such payments, and with effect from 1 January 2004, gains arising on the disposal of assets acquired with such payments or the investment of such payments, provided the aggregate of the gains and income exceeds 50% of the aggregate of the person’s total income and gains. The injury must have given rise to a permanent and total mental or physical incapacity which prevents the person from maintaining himself or herself. (Leaflet No. IT 13 - Personal Injury Compensation Payments)
Compensation payments made by the Hepatitis C and HIV Compensation Tribunal - are exempt from income tax. Also exempt is income arising from the investment of such payments and with effect from 1 January 2004, gains arising on the disposal of assets acquired with such payments, provided the aggregate of the gains and income exceeds 50% of the aggregate of the person’s total income and gains, if the individual is permanently and totally incapacitated from maintaining themselves as a result of the infection.
Lump Sums - can be exempt where paid by an employer because of injury or disability. Please see Information Leaflet IT21 - Lump Sum Payments on Redundancy/Retirement for further information.
