Brendan Burgess
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From 16 October 2013, Tax Relief for Medical Insurance premiums will be restricted to the first €1,000 per adult insured and the first €500 per child insured.
tax relief on health insurance restricted to €1,000 and €500 for kids
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In the Minister's speech he gave the example of a family of 2 adults and 4 children having a tax allowance level of 4000.
**In relation to medical insurance relief, I have decided to cap the amount of premium on which tax relief will be available to €1,000 per adult and €500 per child. This will restrict the exposure of the Exchequer in relation to premiums paid for ‘gold plated’ medical insurance policies, while not affecting the majority of individuals who avail of more standard levels of medical cover. For example, a family of two adults and four children will still receive tax relief on premiums of up to €4,000 per annum. Only the portion of any premium that exceeds the new thresholds will not qualify for tax relief.**
However, I have just spoken with someone in the Dept of Finance just to clarify whether the 1000 per adult or 500 per child were transferable or interchangeable, in the case where the policy one member of a family cost more then another, but overall they were within the limits, but it seems not.
So since everyone within a family can have a different policy and/or a different provider, to cope with different health needs, I asked what would the situation be if one adult had a policy costing gross 800 and the other 1200, with one child having a policy costing gross 600 and second child 400. This gives a total of 3000 gross cumulatively. However, the man said that there was no transferability as far as he knew so, in effect a family choosing different policies with different costs, and benefits attached, to suit their needs are going to suffer even if other members are not using the full 1000 or 500 allowed.
Seems very unfair. At least if the overall level was "transferable" it would be something.
I also pointed out that policies that are cost 1000 gross are by no means "gold plated" policy. An ordinary adult on VHI Company Plan Level 1 is around 1400.
**In relation to medical insurance relief, I have decided to cap the amount of premium on which tax relief will be available to €1,000 per adult and €500 per child. This will restrict the exposure of the Exchequer in relation to premiums paid for ‘gold plated’ medical insurance policies, while not affecting the majority of individuals who avail of more standard levels of medical cover. For example, a family of two adults and four children will still receive tax relief on premiums of up to €4,000 per annum. Only the portion of any premium that exceeds the new thresholds will not qualify for tax relief.**
However, I have just spoken with someone in the Dept of Finance just to clarify whether the 1000 per adult or 500 per child were transferable or interchangeable, in the case where the policy one member of a family cost more then another, but overall they were within the limits, but it seems not.
So since everyone within a family can have a different policy and/or a different provider, to cope with different health needs, I asked what would the situation be if one adult had a policy costing gross 800 and the other 1200, with one child having a policy costing gross 600 and second child 400. This gives a total of 3000 gross cumulatively. However, the man said that there was no transferability as far as he knew so, in effect a family choosing different policies with different costs, and benefits attached, to suit their needs are going to suffer even if other members are not using the full 1000 or 500 allowed.
Seems very unfair. At least if the overall level was "transferable" it would be something.
I also pointed out that policies that are cost 1000 gross are by no means "gold plated" policy. An ordinary adult on VHI Company Plan Level 1 is around 1400.
InfoSeeker
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As per the top post this is being introduced today so what will happen for 2013, e.g. adult pays premium of 1200 in February as the cover runs from Feb 1st to Jan 31st 2014.
Is it pro rata, no restriction from Feb 1st to Oct 15th so that part is fully claimable as a credit and then the restriction runs from Oct 16th so you apportion how much you are entitled to from period Oct 16th to Jan 31st and add this?
Is it pro rata, no restriction from Feb 1st to Oct 15th so that part is fully claimable as a credit and then the restriction runs from Oct 16th so you apportion how much you are entitled to from period Oct 16th to Jan 31st and add this?
Yes, so that was potentially going to increase the cost of Med Insurance anyway. A €1000 euro premium does not get you a "gold plated" policy and this measure will just push up the price of "normal" type policies even more and then the restriction on tax relief will have another effect.
Given the Ministers comments last night on Prime Time about the huge rises in the price of policies lately, one would wonder is he playing a game of trying to force VHI etc into just changing their ways and their price offerings, or does he want all of us to just get out of having private health cover and resort to the public system.
I find myself wondering - is he being very smart or very stupid.
But one thing I do know is that for us having Med Insurance is the next priority after the mortgage, forfeiting whatever needs to be forfeited in the meantime. It was hard last year to pay the premiums, so I am not sure what we will do next year.
But given that my husband would probably be paralyzed from the neck down if we had not had private insurance it is a real worry.
Given the Ministers comments last night on Prime Time about the huge rises in the price of policies lately, one would wonder is he playing a game of trying to force VHI etc into just changing their ways and their price offerings, or does he want all of us to just get out of having private health cover and resort to the public system.
I find myself wondering - is he being very smart or very stupid.
But one thing I do know is that for us having Med Insurance is the next priority after the mortgage, forfeiting whatever needs to be forfeited in the meantime. It was hard last year to pay the premiums, so I am not sure what we will do next year.
But given that my husband would probably be paralyzed from the neck down if we had not had private insurance it is a real worry.
No, the price you are paying at the moment will continue until Jan 31st 2014.
The new prices will apply to people renewing from 16th October 2013 onwards.
The HIA will be updating their website to take account of the new pricing changes as a result of the Budget.
www.hia.ie/latest-news/latest-news/budget-2014-tax-relief-16.10.2013/
Snowyb
All health insurance premiums include tax relief at source of 20%. This is how the relief is granted. A person's own particular set of tax credits plays no part in getting tax relief on health insurance premiums.
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newseeker1
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Similar question to elcato
My current premium is as follows as per heatlh insurance cert for 1 person
Gross Premium - EUR 1025
Annual Premium Payable (including government level and factoring in tax relief at source)- EUR 1048
My policy renewal date is Feb 2014
Does that mean that if at renewal time my policy still were to cost 1048 gross i'll only get tax relief on the 1st 1000 eur relief of 200 eur
When people talk about gross and net what do the mean - is the gross premium the figure including government level and the tax relief factored in and the net premium is the premium before these are added in
Thanks
My current premium is as follows as per heatlh insurance cert for 1 person
Gross Premium - EUR 1025
Annual Premium Payable (including government level and factoring in tax relief at source)- EUR 1048
My policy renewal date is Feb 2014
Does that mean that if at renewal time my policy still were to cost 1048 gross i'll only get tax relief on the 1st 1000 eur relief of 200 eur
When people talk about gross and net what do the mean - is the gross premium the figure including government level and the tax relief factored in and the net premium is the premium before these are added in
Thanks
It would appear so. See http://www.finance.gov.ie/documents/guidelines/budgetmedinsurance.pdf
'All Medical Insurance policies taken out or renewed from the 16th of October will receive 20% tax relief up to the thresholds of €1000 per adult & €500 per child. This represents a change from the previous system where a tax relief of 20% was available for the full cost of the policy, including policies costing in excess of €1,000 per adult& €500 per child.'
newseeker1,
I'm assuming your premium is €1,025 and your levy is €285, meaning your total "gross premium" is €1,310.
Currently you are getting 20% Tax Relief at Source or €262, meaning you only pay €1,310 - €262 = €1048. This is your net premium.
In future you will only get Tax Relief on the first €1,000 which means a maximum of €200 meaning you will pay the extra €62 per year, as the government is no longer paying this for you.
However that's not the full story. The Government Levy has also gone up this year from €285 to €290 (or perhaps even to €350 depending on if you are on an "advanced" plan). So, assuming you are not on an advanced plan, you will be paying €1,025 + €290 - €200 = €1,115 or an extra €67 per year.
But even that's not the full story. Your premium will most likely have gone up too, from the €1,025 you paid last year. This is for a number of reasons, including: 1) the insurers are claiming the number and expense of claims have gone up, 2) the government is going to charge the insurers considerably more for hospital visits (e.g. if you have insurance you will be charged private beds even for using public beds).
You have not stated which plan you are on, but it should be easy enough to check on the insurer's website if the premium has gone up.
The reality is that people will be paying a LOT more on their health insurance this year, than they did last year for the same cover. You can offset some of this by shopping around, but that's not going to be enough. You will be paying more.
newseeker1
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Thanks BazzaDP for the reply and information
yes you are right - my Premium (called Gross premium) on my cert is 1025 and the government level is 285 so my gross gross premium is 1310 like you correctly point out
My tax relief is 262 which brings my net preium to 1048 again as you correctly pointed out
Thanks clarifying this for me
Sounds like we going to be paying lot more for our health insurance plans :-(
yes you are right - my Premium (called Gross premium) on my cert is 1025 and the government level is 285 so my gross gross premium is 1310 like you correctly point out
My tax relief is 262 which brings my net preium to 1048 again as you correctly pointed out
Thanks clarifying this for me
Sounds like we going to be paying lot more for our health insurance plans :-(
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