Home Instead Blog

Carers are missing out on millions of euro in tax reliefs
Mar 10, 2017

By Charlie Weston
Source: Irish Independent, 21st February 2017

Millions of euro in tax refunds are going unclaimed by those caring for incapacitated relatives, experts have calculated.

Up to a third of eligible taxpayers appear to be unaware they can get sizeable tax reliefs to offset some of the cost of nursing home fees, home-care costs and medical expenses.

Caring for relatives who have become ill or infirm, or for children who have disabilities of a permanent nature, is a heavy financial burden for thousands of families.

The cost of care is hugely expensive yet unavoidable in many cases, according to Taxback.com's commercial director Eileen Devereux. But tax relief at 40pc is available for those funding nursing home fees.

Read more: Report - €212,000 a year for a resident in most expensive public home

Large numbers of the 30,000 people in nursing homes are part of the State's Fair Deal scheme, where costs are covered largely from the patient's pension and by the State taking a chunk of the value of their home. But not everyone qualifies for this scheme, and other costs may also be incurred even for those in the Fair Deal scheme.

"We believe many people are unaware they are eligible for a tax rebate on 'carer' expenses incurred on a regular basis," Ms Devereux said.

"These rebates could go a long way to alleviating at least some of the financial burden people are under."

According to figures from the Revenue Commissioners, just 1,910 people claimed the 'Person Employed to Take Care of an Incapacitated Individual' tax credit in 2014.

Ms Devereux said her firm's experience suggests that this figure is relatively low considering a number of home-care agencies have more clients on their books than this.

She said 20,300 people claimed the Incapacitated Child Tax Credit in 2014.

However, in the 2011 Census more than 106,000 families indicated they had a child with a disability. "While, not all of these families may qualify for the tax credit, we are confident that the number could be higher than the current 20pc currently claiming it."

Taxback.com says recent reports have suggested that the average cost of private sector nursing homes is €1,000 a week, with some costing as much as €2,000.

Families who employ home carers to look after their relatives or children typically pay up to €1,800 for a five-day working week to one of the 150 private home-care companies.

The personal and corporate tax solutions site said that, similar to nursing home expenses, the tax relief available for employing a home carer has also "bucked the trend" by increasing recently to a taxpayer's higher income tax rate.

"Relief is given by taking a deduction from your taxable income rather than by tax credit. Taxpayers can submit a claim by completing a Form HK 1," Ms Devereux said.

For 2016, you can claim tax relief at the higher rate on the actual cost incurred up to the maximum of €75,000.