Updated Guide on medical expenses

In previous briefings we have highlighted the fact that Revenue have increasingly used the Tax/E briefing facility to advise practitioners and indeed the general public on their views on how tax law and practice should be implemented.  This mode of communication has also been used to clarify certain technical matters an example of which is set out below.

Revenue have updated their Guide recently and it is worthwhile highlighting some matters of interest:

Nursing home expenses

Unlike all other qualifying medical expenses, nursing home expenses incurred by a taxpayer may be claimed at his/her marginal tax rate. The full cost incurred by a third party of maintaining an individual in a nursing home may be allowed where the claimant has actually incurred the cost and has not been reimbursed directly or indirectly by the nursing home resident.

It is irrelevant as to whether or not the nursing home resident has income in their own right BUT any reimbursement  they actually make to the claimant is netted off in calculating the claim arising.

In cases where the resident pays some of their nursing home costs from own income and a third party pays some costs there can be issues in identifying exactly what proportion of costs are actually paid towards nursing home care by each party. This updated Revenue briefing confirms the long standing practice that in such cases the resident will be regarded as paying 60% of his/her income towards their maintenance with the balance then claimable by the other party.

Where a patient has availed of support under the nursing home support scheme the position is as follows:

  1. The individuals weekly contribution is identified
  1. If not in a position to make this contribution the HSE will make it on that persons behalf effectively creating a “nursing loan”
  1. On death of the individual the payments are repayable to the HSE and if defrayed out of the deceased’s Estate the Executor can claim the full amount of tax relief at that stage against that individuals tax liability at their marginal tax rate.

Other useful points

Insurance/compensation for injury incurred
Where a specific award for personal injury is granted against specific vouched medical expenses no tax relief will be granted. However it can be the case that a lump sum to cover future potential medical expenses may also be awarded. In such cases any actual expense subsequently incurred will be generally regarded as coming from current income and tax relief will still be available.

Health care outside the State

The costs of such health care may also be claimed in certain circumstances once the practitioner is entitled under the laws of that overseas country to practice there. This will include the cost of maintenance in a hospital or nursing home etc and may also include the reasonable travel and accommodation costs of an accompanying person.

Specific medical conditions

Costs associated with specific conditions such as special foods for coeliac or diabetic patients may also qualify for tax relief under the heading of medical expenses but unfortunately current tax law does NOT allow for tax relief on additional educational type costs incurred for children with autism or dyslexia.

Medical equipment

The updated Guide also contains helpful assistance as to the type of costs incurred on medical equipment which may qualify for tax relief. For example where medical evidence shows that a computer is necessary to alleviate communication problems of a severely incapacitated person the cost may be allowed.

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