Are the feepayers of Kilkenny’s 17 nursing homes failing to claim tax relief?

Tax experts at Taxback.com say that an assessment of the most recent Revenue figures for Nursing Home relief reveal that, while there are more than 30,000 people in Nursing Homes nationwide, just 6,800 claimed the relief (which all fee payers are entitled to) in 2016. The tax refund specialists have also observed that the average refund received is significantly lower than one would expect at €5,000[ – which they believe highlights the fact that even of those who do apply for the relief – most are not maximising their full entitlement.

Eileen Devereux, Commercial Director at Taxback.com said there are approximately 711 beds in the 17 nursing homes in Kilkenny. And while many of these homes are at full capacity, most of the residents and/or the feepayers are not making use of the tax relief available.

"Anyone paying nursing home fees, either for themselves or for someone else, is eligible to claim relief at their marginal rate of tax. Many nursing home occupants in the country have part of their fees paid under the Fair Deal Scheme, but these people can still claim relief on their contributions," she said.

The fact that just 6,800 people out of 30,000 claimed the relief in 2016 says to us that many are simply not aware of the tax reliefs available – or perhaps some believe that applying for the refund would be “too much hassle”. We want to stress to these people that the application process really is very straight forward.”

Ms. Devereux continued: "There’s no doubt that nursing home costs are expensive – people pay anywhere from €50,000 to upwards of €80,000 a year. And these fees are paid in a myriad of different ways. Many people are part of the Fair Deal Scheme. This scheme only contributes part of the fees, depending on the person’s financial position. Frequently fees are paid out of the individual’s estate, while it is often the case that payment of the costs falls to family members. The point is that everyone who contributes is entitled to claim something – and the refunds due can be significant amounts of money.

Full payment of fees for a nursing home start at €50,000 a year at least – even tax relief at the lower rate that would still entitle the payer to €10,000 in tax relief, which is €5,000 more than the average refund.”

Taxback.com say that many nursing home fees are paid by the children of the occupants, or are spread across siblings, some of whom could be paying tax at the higher rate and would be eligible for an even-greater relief of up to €20,000 on fees of €50,000.

Ms Devereux said that while they are, “conscious that the paying of nursing home fees is a sensitive area in most families, and often fraught with tension as it can highlight the differences in income and tax relief of siblings, a pragmatic family discussion on how to maximise the tax relief is warranted in all cases.” Taxback.com teamed up with Nursing Homes Ireland (NHI) to produce a free Nursing Home Finance and Tax Guide, aimed at ensuring anyone who is paying for nursing homes and the costs associated claims all the reliefs and refunds available to them.

 The Taxback.com Nursing Home Finance & Tax Guide provides user friendly advice on how money can be saved and/ refunded. Ms. Devereux provided an outline of what is covered in the guide: “There are six main areas that should be looked at. While people might not be eligible to get money back in each category – that changes are they will certainly meet the criteria for the majority.

NURSING HOME EXPENSES - If you are paying nursing home fees for yourself or a parent or loved one, you can claim relief on nursing home expenses at your highest rate of tax subject to certain conditions
FAIR DEAL SCHEME - Many people avail of tax relief under the Fair Deal Scheme (or the Nursing Homes Support Scheme). Operated by the Health Service Executive (HSE), the scheme aims to provide financial support to people who need long-term nursing home care. Under Fair Deal, you make a contribution towards the cost of the care and, if your accessed contribution is less than the amount of the fees, the HSE will pay the rest. While you can claim tax relief on the contribution you make, you can’t claim any relief on the contribution made by the HSE.
DEPENDENT RELATIVE TAX CREDIT - If you’re caring for a dependent relative you may qualify for the Dependent Relative Tax Credit.
MEDICAL EXPENSES - If you pay for medical costs, either for yourself or a loved one, you can claim medical expenses at a rate of 20%.  There are a variety of expenses on the list.
KIDNEY PATIENTS - Kidney patients are entitled to a number of additional reliefs to the normal health expenses. For example, you can claim relief on the cost of travelling to and from the hospital if you or your loved one travels regularly for dialysis treatment. If you’re travelling in your own car you can claim relief at €0.27 per mile or €0.17 per km (2017).
MEDICAL APPLIANCES - You can claim relief on the cost of purchasing, maintaining, and repairing medical appliances for yourself or on behalf of a loved one (that you’ve been advised to use by a registered practitioner