Taxation and Medical Expenses
If you pay medical expenses that are not covered by the State or by private health insurance, you may claim tax relief on some of those expenses. These expenses include the costs involved in nursing home care. More information is available about tax relief on nursing home fees and for dependent relatives.
Tax relief is also available for premiums paid for health insurance and for long-term care insurance. The insurance company grants this tax relief at source.
You can claim tax relief on medical expenses you pay for yourself and on behalf of any other person. You can claim relief only if you cannot recover the expenses from any other source. You cannot claim tax relief for sums already received or due to be received from:
• A public or local authority, for example, the HSE (Health Service Authority)
• An insurance policy
• Any other source, for example, compensation
You can claim tax relief on:
• Costs of doctors and consultants’ fees
• Items or treatments prescribed by a doctor or consultant
• Maintenance or treatment in a hospital or a nursing home
• Cost of employing a qualified nurse at home
• Costs of speech and language therapy carried out by a speech and language therapist for a qualifying child
• Transport by ambulance
• Costs of educational psychological assessments carried out by an educational psychologist for a qualifying child
• Certain items of expenditure in respect of a child suffering from a serious life-threatening illness
• Kidney patients’ expenses (up to a maximum amount depending on whether the patient uses hospital dialysis, home dialysis or CAPD)
• Specialised dental treatment
• Routine maternity care
• In-vitro fertilisation
The following, where prescribed by a doctor, also qualify for medical expenses relief:
• Drugs and medicines
• Diagnostic procedures
• Orthoptic or similar treatment
• Hearing aids
• Orthopaedic bed or chair
• Wheelchair or wheelchair lift (no relief is due for alteration to the building to facilitate a lift)
• Glucometer machine for a diabetic
• Engaging a qualified nurse in the case of a serious illness
• Physiotherapy, chiropody/podiatry services or similar treatment
• Cost of a computer where there is medical evidence that it is necessary to help a person with a severe disability to communicate
• Cost of gluten-free food for coeliacs. As this condition is generally ongoing, a letter (instead of prescriptions) from a doctor stating that the individual is a coeliac sufferer is acceptable. Receipts from supermarkets in addition to receipts from chemists are acceptable.
You cannot claim relief for cosmetic surgery costs, unless you need the surgery as a result of a congenital abnormality, personal injury or disease.
The list of treatments and appliances that attract tax relief is added to from time to time. If you are undergoing a new procedure or availing of a new appliance, it is worth checking whether you can claim tax relief. For more information, see the Revenue website.
Health Insurance Tax Credit
If you are a member of an approved private health insurance scheme, you may get a tax credit. This tax credit is generally granted directly by the insurance company. Your premium will be reduced by the amount of the tax credit so you will probably not even notice that you have got a tax credit. This is known as Tax Relief at Source (TRS). However, in some limited situations TRS does not apply, for example, where an employer pays the medical insurance premiums on behalf of an employee. This is treated as a Benefit in Kind and PAYE, PRSI and USC are due on the total amount. This means that the employee does not benefit from the TRS on the medical insurance premium and can make a claim directly to Revenue. You can get examples of how tax relief is applied where medical insurance premiums are paid directly by employers on Revenue’s website.
Tax relief on private health insurance premiums is limited to €1,000 for each adult and €500 for each child. This applies to policies which are renewed, or entered into, on or after 16 October 2013. A child for the purposes of this provision includes a student over 18 years and under 23 years who is in full-time education. The relief is given at the standard rate of 20%.
Additional age-related tax credits for health insurance starting for people aged 50 and over and increasing for higher age groups were introduced in 2009. From 2011, the additional relief started after age 60. In 2012, the age bands were narrowed. These age-related tax credits were replaced by a new risk equalisation scheme in 2013. Policies taken out or renewed after 31 March 2013 come under the new scheme. You do not need to claim this relief as it is granted directly by the insurance company (Tax Relief at Source).
Long-term care insurance
You can now receive a tax credit for payments to long-term care insurance schemes. This operates in the same way as the health insurance tax credit.
Travelling abroad for treatment
You can claim tax relief on the cost of medical treatment obtained outside the State. You can claim for treatment abroad that is also available in the State but you cannot claim travelling expenses for this care (see below).
The practitioner (GP, consultant or dentist) who provides your care must be entitled to practice in the country in which the care is provided.
You can only claim for the cost of maintenance or treatment in a hospital, nursing home or clinic abroad if the hospital, nursing home or clinic provides access to 24-hour nursing on-site.
If the qualifying health care is only available outside Ireland, you can also claim reasonable travel and accommodation expenses. In such cases the expenses of one person accompanying the patient may also be allowed if the condition of the patient requires it. If the patient is a child, the expenses of one parent are usually allowed and, exceptionally, of both parents where it is clear that both need to be with the child.
Dental and optical treatment
You cannot get tax relief for routine ophthalmic and dental care. Routine ophthalmic treatment covers sight testing, provision and maintenance of glasses and contact lenses. You can get tax relief for orthoptic or similar treatment where prescribed by a doctor. Routine dental treatment covers extractions, scaling and filling of teeth and provision and repairing of artificial teeth and dentures.
The following dental treatments do qualify for tax relief:
• Veneers/Rembrant type etched fillings
• Tip replacing
• Gold posts
• Gold inlays
• Endodontics (root canal treatment)
• Periodontal treatment
• Orthodontic treatment
• Surgical extraction of impacted wisdom teeth: this qualifies for tax relief when it is undertaken in hospital.
Nursing home payments
Maintenance or treatment in a hospital includes maintenance or treatment in a nursing home. If you are paying the nursing home fees, you can get the tax relief – whether you are in the nursing home yourself or you are paying for another person to be there.
You can claim relief on the cost of employing a qualified nurse at home at the standard rate of 20%. See the Revenue website for more information on employing a qualified nurse in the home.
Child oncology patients and children with permanent disabilities
In the case of children receiving treatment for cancer (that is, child oncology patients) and children with permanent disabilities, you can claim tax relief on the following as health expenses:
Telephone: Where a child oncology patient or a child with a permanent disability is being treated at home, you can claim a flat rate payment to cover telephone rental and calls where those expenses are incurred for purposes directly connected with the treatment of the child.
Overnight accommodation: Tax relief is also allowable for parents or guardians of child oncology patients and children with permanent disabilities where the child is required to stay overnight in a hospital as part of their treatment and the parent or guardian is required to stay nearby. Relief is allowable on payments made to the hospital and/or hotel or bed-and-breakfast near the hospital for accommodation.
Travel: The cost incurred in travelling (unlimited journeys) to and from any hospital in respect of:
The patient and accompanying parents or guardians and Parents or guardians of the patient where such trips are shown to be essential to the treatment of the child. There is a mileage allowance if you use a private car.
Hygiene products and special clothing: Tax relief is also allowable for parents/guardians of child oncology patients and children with permanent disabilities for the cost incurred in respect of hygiene products and special clothing. This is subject to a maximum of €500 per year.
Tax relief is granted under specific headings in respect of certain expenses incurred by kidney patients. The amount of relief depends on where the patient receives care (for example, in hospital or at home).
Home dialysis and CAPD patients may claim tax relief on items such as electricity, telephone, laundry and travel expenses. Read more about kidney patients and tax relief on medical expenses here.
Tax relief on medical and health expenses is given at the standard rate of 20%.
However, tax relief on nursing home expenses can be claimed at your highest rate of tax.
How to Apply
You do not need to do anything about tax relief for health insurance or long-term care insurance because the credits are granted automatically at source (TRS).
You must apply separately for medical expenses relief.
You can claim tax relief online using Revenue’s myAccount service. You can use Medical form MED1 (pdf) to claim tax relief on all general medical expenses (including dental expenses). You can only claim for medical expenses if you have receipts to prove your claim.
Do not send your medical receipts (this includes MED 2) with your MED 1 form. However, you must keep your medical receipts for six years because Revenue may investigate your claim.
A medical form MED2 (pdf) is a receipt to prove your dental expenses. Your dentist will normally have a supply of MED 2 forms and should complete it for you.
Relief is given by way of repayment at the end of the year. Since 1 January 2005, the time limit on claims for repayment of tax is four years.
Additional information is available on the Revenue website or from PAYE Lo-call service. Contact information for all tax offices in Ireland is also available at the front of your telephone directory.
Accounting Pro is Ireland’s premier contractor accounting service. We are here to help you, the busy contractor and/or company, with all your accounting and payroll needs. We are both an umbrella company and umbrella corporation and we can create your limited company. We are on your side, always. To learn more about what we do please review https://accounting-pro.ie/ and contact us by email: firstname.lastname@example.org or phone us 01 592 1802. For the UK see Accounting-Pro UK. “Taxation and Medical Expenses” is an article written by Accounting-Pro Ireland for the benefit of everyone. Feel free to share it but please give attribution on a CC BY-SA license.