With the cost of living increasing, saving money in relation to our healthcare and medical expenses has become a priority for many people. Any qualifying medical expenses incurred in 2012 (or unclaimed medical expenses incurred in 2011, 2010 and 2009) may reap an unexpected cash windfall.
Health Insurance Premiums
Tax relief is granted on health insurance premiums at source. Therefore, any payments made to VHI, Laya Healthcare, Aviva Health or other such health insurance bodies, are made at a reduced premium equal to 80% of the gross amount to your health insurance provider. This is the same as getting tax relief of 20%, but the tax credit is granted directly by the health insurance provider. For those whose employer pays their medical insurance, tax relief at source is not available. Instead, an employee can claim the relief due by having the credit coded onto their certificate of tax credits. In addition, where an employer pays your medical insurance premium, a benefit in kind charge arises and PAYE/PRSI and the USC must be deducted by your employer on the value of the benefit provided.
Qualifying Medical Expenses
For those who do not have any health insurance, a claim for tax relief at a rate of 20% can be made on any qualifying medical expenses that have been incurred. It is important to note that you must have actually incurred the cost of the medical expenses and, therefore, tax relief cannot be claimed on any expenditure that:
- Has been, or will be, reimburses by another body such as the VHI, Laya Healthcare, Hibernian Aviva Health, the Health Service Executive or other body or person;
- Has been, or will be, the subject of a compensation payment; and,
- Relates to routine dental and ophthalmic care.
Thereafter, it must be a qualifying medical expense which is outlined in Revenue’s Information Leaflet IT6. Some of these expenses are as follows:
- Doctors and consultants fees;
- Treatments prescribed by a doctor or consultant, e.g. physiotherapy;
- Drugs or medicines prescribed by a doctor, dentist or consultant;
- Treatment in a hospital or approved nursing home;
- Transport by ambulance;
- Routine maternity care;
- Kidney patients’ expenses (up to a maximum amount depending on whether the patient uses hospital dialysis, home dialysis or CAPD);
- Cost of educational psychological assessments for your child;
- Certain items of expenditure in respect of a child suffering from a serious life threatening illness;
- Laser vision correction surgery; and,
- Trained guide dog supplied by the Irish Guide Dogs for the Blind.
If any of these treatments are carried out abroad, these will also qualify for tax relief provided that the practitioner carrying out the treatments is entitled under the laws of the country in which the care is provided to practice medicine there.
The cost of travelling abroad is not an allowable expense. However, there are limited exceptions (e.g. where the healthcare is only available outside of the state). In this case, the cost of reasonable travelling and accommodation expenses are allowable. Relief is not available in respect of cosmetic surgeries such as Botox injections.
Tax relief is available only in respect of non-routine dental treatment. Therefore, routine dental treatment such as extraction, scaling and filling of teeth and the provision and repairing of artificial teeth or dentures is not allowable.
You must claim non-routine dental expenses on Form Med 2 which is signed and certified by a dental practitioner. The below list outlines the type of dental treatments for which tax relief is allowable:
- Veneers/Rembrandt-type etched fillings;
- Tip replacing;
- Endotonitics – root canal treatment;
- Periodontal treatment;
- Orthodontic treatment;
- Surgical extraction of impacted wisdom teeth; and,
Tax relief on non – routine dental treatments obtained outside the state may also be available provided the dentist is a qualified practitioner.
Michael Coll is a partner and founding member of www.thetaxclinic.ie. His office is located on the High Road Letterkenny.