# Tax relief on Fair Deal nursing home fees



## Meath Lady (5 Feb 2017)

I would like some opinions on this. My father spent almost three years in  a nursing home under the Fair Deal scheme where he paid about 27000 per year. I am reasonably sure he could claim tax relief himself on this expense but unfortunately his pension is small and he pays only a small amount of tax on it.
Whilst I know that anybody can claim tax relief on nursing home fees for another person, I am wondering because its the Fair Deal and therefore means based can his son or daughter or both claim this relief although he has paid the bills.


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## twofor1 (5 Feb 2017)

Meath Lady said:


> Whilst I know that anybody can claim tax relief on nursing home fees for another person, I am wondering because its the Fair Deal and therefore means based can his son or daughter or both claim this relief although he has paid the bills.



AFAIK you can only claim tax relief, if you actually pay, I’d be surprised if you could claim tax relief simply because your parents paid nursing home fees, the fact that it is Fair Deal or private I think is irrelevant, the only difference is with private you would be paying more, so could claim more.

Having said that I am aware of a few who effectively launder payments by paying nursing home fees on behalf of a relative to get the tax relief and the relative simply refunds them, both nursing homes and financial advisers have advised this as the way to go.


It also seems bizarre that, as a person in under Fair Deal only pays 80% of their income /assets, and in most cases this is a small percentage of the actual cost of their care, Why should this be eligible for tax relief to a relative unless they paid the cost  themselves ?

In my opinion, if the nursing home resident has the means to pay whether under Fair Deal or privately, in that case a family member should not be allowed claim tax relief in this way.


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## Meath Lady (5 Feb 2017)

Thats exactly what I was thinking but just wondered, and I am not interested or suggesting in any way  anything to do with laundering payments. Because he had paid in excess of 80.000 euro to the nursing home I wanted to claim tax relief if it is considered an allowable expense. However I would not  entirely agree that it is a small percentage of the cost of their care.  Depending on a persons means it *may* be a small percentage of the cost of their care or equally it could be almost the* full* amount of the cost of their care. In my dads case he had paid approximately 50% of the cost of his care which amounted to over 80,000 euro because he was thrifty all his life and saved for the rainy day. He also paid all his taxes etc all his working life.


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## Brendan Burgess (5 Feb 2017)

Only your father can claim tax relief on the money he spent. 

However, if you pay his expenditure from now on, you can claim tax relief on it. 

Brendan


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## twofor1 (6 Feb 2017)

Meath Lady’s question has been answered, can I ask another Fair Deal tax question.

Last year I looked at a single room in a well known south Dublin nursing home on behalf of an elderly relative looking for long term care.

The nursing home explained that they only offer single rooms as part of their ‘’Premium Package’’ at a cost of between €200 - €400 weekly on top of one’s contribution for Fair Deal, If you had a sharing room there was an additional charge of €60 weekly for ‘’Activities’’

For the €200 premium package, you got hairdressing, toiletries, Wi-Fi in your room and a daily paper.

For the €400 premium package, you got all the above plus a slightly bigger room on the 5th floor with stunning views. I was assured that the additional charge for premium packages was fully allowable for tax relief.

Most other nursing homes have an additional charge of €40 - €90 which apply to each resident in single or sharing rooms, which they also say is for activities. Again they all assured me that this charge was fully allowable for tax relief.

Whatever you pay either privately or under Fair Deal is allowable for tax relief, I would have thought that additional  ‘’Activities Charges’’ are at best dodgy for tax relief but an additional €400 weekly for a ‘’Premium Package’’ surely is not eligible for tax relief.

Any views ?


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## Meath Lady (6 Feb 2017)

Thanks Brendan. Sadly he passed away some time ago but we are just finalizing his tax returns etc. Thanks for the help

two for one. I cannot imagine paying 400 euro weekly ON TOP OF of one contribution for Fair Deal, unless a very short stay is expected  .l  have no idea about tax relief in this instance sorry.


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## The Ghoul (6 Feb 2017)

I was under the impression that tax relief couldn't be claimed on Fair Deal fees as the assessment is based on the applicant's net income? Net income is asked for in the form.
http://www.hse.ie/eng/services/list/4/olderpeople/nhss/AppForm.pdf


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## twofor1 (7 Feb 2017)

Contributions you make under Fair Deal are allowable for tax relief.

The application form asks for net income because that part of your contribution is assessed on net income.


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## TheManWho (13 May 2019)

twofor1 said:


> Having said that I am aware of a few who effectively launder payments by paying nursing home fees on behalf of a relative to get the tax relief and the relative simply refunds them, both nursing homes and financial advisers have advised this as the way to go.



When you say laundering, is the implication that it is illegal?

If someone in a nursing home gives the nursing home fee to a relative to pay, and relative pays CAT at 33% once exceeding the gift threshold then it is all legal right?

This relative can then claim 40% of the nusing home fees back if they are on the top rate of tax.

This gives a 7% gain for the relative who paid the nursing home.

If the relative gifts this 7% back to the nursing home resident then the nursing home resident is liable for CAT at 33%, leaving them an overall gain of 4.69%.

Taking 1200 a week fees as an example, this would give a saving of almost 3000 a year to the nursing home resident.

Sound correct and legal?


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## TheManWho (13 May 2019)

Or the nursing home resident could loan the nursing home fee to their relative, drawing up documentation to state the debt ceases on their death i.e. no payable to the estate. Then the relative pays no CAT on receiving the nursing home fee. 

This would leave the relative with a 40% gain when they claim tax back on nursing home payment. 

The relative could gift the 40% back to the nursing home resident leaving them with 26.8% after CAT. Or they could loan them the 40% back with no tax bill?


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## RedOnion (14 May 2019)

metricspaces said:


> state the debt ceases on their death


That's a gift.

There are some anti-avoidance measures regarding the rest of your post. Here's an easy read that touches on it:


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## AlbacoreA (14 May 2019)

I was under the impression that the deceased estate can claim the tax back.


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