Tax Relief for Nursing Home Costs

[Slash]

My elderly mother will have to go into a nursing home. The costs are enormous: €800 per week for fully dependent care. She has limited means, so her children will have to pay most of the cost on her behalf.

According to Oasis.gov.ie, it seems to suggest that costs paid to a Revenue approved nursing home can be offset for tax relief on the Med1 Form.

If this is correct:

1. Is there any limit on the amount that can be claimed on the Med1? So, if I pay the full cost, i.e. €40K per annum, can i claim the full 40K?

2. Do you have to claim the relief at the end of the tax year, or can you get your Certificate of Tax Credits amended so that the relief is spread through the year?

3. Is the tax relief available at the marginal rate?

I would appreciate any information that anyone has, as a result of practical experience.

Thank you.

 

[asdfg]

Are you paying the full amount?. Are your sibling helping?

1. Is there any limit on the amount that can be claimed on the Med1? So, if I pay the full cost, i.e. €40K per annum, can i claim the full 40K?

Yes. You claim the amount against your tax, so in effect your income for tax purposes will be reduced by 40K and you pay tax on the balance. Also don't forget to include any additional medicines for yourself, your family including your mother

Salary say 60K
Less Nursing Home fees 40
Taxable income 20
Taxed @ 20% 4K
less credits
Tax due

If you are earning less than 40K then you will pay no tax
From a tax point of view it would be best to spread the 40 K around as many of your siblings and their spouses paying tax @ 42% first

2. Do you have to claim the relief at the end of the tax year, or can you get your Certificate of Tax Credits amended so that the relief is spread through the year?

Normally you claim at the end of the tax year. If this was causing hardship I'm sure revenue would do something for you.

3. Is the tax relief available at the marginal rate?

Yes - up to 42% is available if you are paying tax at that rate. Note that pay before tax is reduced so a proportion of the nursing home fees may be taxed at the lower rate.

 

[Slash]

That's great. Many thanks.