Caring for a family member can have a huge impact on the financial situation of the whole family. Different types of tax relief are available for dependent older people and their family carers to help with the costs of daily living. Below is a list of tax reliefs you or your loved one may be eligible for.
Tax Relief on the Costs of Employing a Home Carer
You can claim tax relief on the cost of employing a carer if you employ one for yourself, or for another family member. You can employ the carer directly or you can use an agency that employs carers. If you employ the carer yourself, you should register as an employer and you will be responsible for your employee’s tax and social insurance (PAYE and PRSI). You will also have other duties and obligations as an employer, for example regarding hours of work, contracts of employment, payslips, holidays and the minimum wage. If you pay an agency to provide the carer, the agency will employ the carer and be responsible for their tax, social insurance etc. You can still claim tax relief on the cost of paying the agency to provide a carer.
For more information see here.
Tax relief on Nursing Home Fees
You may get tax relief on nursing home fees if you have an income above the tax exemption limit.
You claim tax relief for nursing home expenditure under the general scheme for tax relief on certain medical expenses. Maintenance in a hospital or approved nursing home qualifies for relief. Most nursing homes are approved for tax relief. Revenue has a list of the hospitals and nursing homes that are approved for tax relief. You can claim tax relief on nursing home expenditure at your highest rate of tax (either 20% or 41%).
For more information see here.
Employing a Carer – Tax Credit
Where a person is permanently incapacitated due to physical or mental infirmity, a tax allowance of up to €50,000 is available towards the cost of employing a person to care for the incapacitated person. You can claim this at your marginal tax rate. This credit may be claimed either by the incapacitated person or by a relative, including relatives by marriage.
Dependent Relative Tax Credit
This tax credit is available if you are maintaining either:
- a relative of your own or of your spouse who is so incapacitated by old age or infirmity as to be unable to maintain himself/herself.
- your own or your spouse’s widowed mother/father whether she/he is incapacitated or not
- a child of yours who lives with you and on whose services you are dependent because of old age or infirmity.
The Dependent Relative Tax Credit is €70. If the income of your dependent relative exceeds €13,873 in 2012, no tax credit is due. All of your dependent relative’s income (for example, social welfare payments, pensions and deposit interest) is taken into account for income limit purposes. You no longer need to qualify for the Dependent Relative Tax Credit in order to claim health expenses.
Tax Relief for Disabled Drivers and Disabled Passengers
The Disabled Drivers and Disabled Passengers Scheme provides a range of tax reliefs linked to the purchase and use of vehicles by disabled drivers and disabled passengers in Ireland. The rules of the scheme are set out in the Disabled Drivers and Disabled Passengers (Tax Concessions) Regulations 1994 (SI No. 353/1994) as amended. Under the terms of the scheme, you can claim remission or repayment of vehicle registration tax (VRT), repayment of value-added tax (VAT) on the purchase of a vehicle, and repayment of VAT on the cost of adapting a vehicle, up to a maximum of €9,525 for a disabled driver and €15,875 for a disabled passenger. For more information see here.
Motorised Transport Grant
The Motorised Transport Grant is a means-tested HSE payment for people in Ireland with disabilities who need to buy a car in order to retain employment. This payment is also for people with disabilities who need to have a car or other vehicle adapted in order to enable them to drive and, as a result, earn a living.
On 26 February 2013, the Department of Health announced that the Motorised Transport Grant scheme was closed to new applicants. An alternative scheme is being devised to replace it. Applications received by the HSE before the announcement were processed. For more information see here.
Exemption from Toll Road Fees
Vehicles adapted for disabled drivers or passengers are entitled to exemption from toll road fees. Toll road operators issue special passes which are recognised by all other toll road operators and which allow such vehicles pass through the tolls without paying. To obtain a special pass apply to your nearest toll road operator (pdf).