Written answers

Tuesday, 17 February 2004

10:00 pm

Photo of John CreganJohn Cregan (Limerick West, Fianna Fail)
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Question 250: To ask the Minister for Finance the entitlements or discretionary benefits, from a tax point of view, for persons. [5030/04]

Charlie McCreevy (Kildare North, Fianna Fail)
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I assume that the Deputy is referring to a married couple who have elected to be jointly assessed for income tax and who are caring for their grandchildren. In that case, the couple would be entitled to receive the married person's credit of €3,040 per annum and, if each spouse is working in the PAYE sector, each would be entitled to receive the employee credit of €1,040 per annum. If one of the spouses is aged 65 or over, they may receive the married age credit of €410 per annum. These entitlements are not affected by the fact that the couple are caring for their grandchildren.

The home carer's tax credit of €770 per annum may be obtained in respect of a child whom the claimant or the claimant's spouse is in receipt of child benefit, provided the annual income of the second spouse does not exceed €5,080. If the annual income of the home carer exceeds that amount, the tax credit is reduced by half the excess (effectively €1 of tax credit is subtracted for every €2 by which the income exceeds €5,080) so that where the annual income exceeds €6,620 no tax credit is due.

If the couple pay medical insurance premiums in respect of themselves and/or in respect of their grandchildren, they would be entitled to receive tax relief at the standard rate at source in respect of such premiums.

In addition, the couple are entitled to tax relief at their marginal rate of tax in respect of unreimbursed medical expenses which they incur in respect of themselves and/or their grandchildren. In such circumstances, a de minimis amount would be applied and the couple would be obliged to bear the cost of the first €250 of unreimbursed expenses in a tax year in respect of themselves and their grandchildren. Further details of this relief may be found in the detailed guide entitled "Health/Medical Expenses Relief" which is available on the Revenue Commissioners website www.revenue.ie

An incapacitated child credit of €500 per annum may be claimed in respect of a child who is permanently incapacitated either physically or mentally from maintaining himself or herself and had become so before reaching 21 years of age or finishing full-time education. The couple may avail of this credit in respect of one or both of their grandchildren if one or both are incapacitated.

An employment of a carer allowance may be claimed where a person, or a spouse or a relative is permanently incapacitated by reason of physical or mental infirmity for a tax year and a person is employed to care for the incapacitated person. The allowance applies at an individual's marginal rate of tax for expenses up to €30,000 per annum. Where the cost of employing a carer is shared by family members, the allowance can be shared between them subject to the overall ceiling in any one year. Therefore, the cost of employing a carer can be shared by the incapacitated person and their relatives.

There are various other discretionary reliefs which may be available to the taxpayers themselves, such as Schedule E expenses, rent relief, mortgage interest relief, relief for service charges, relief for contribution to approved superannuation schemes, but, the fact that the couple are caring for their grandchildren has no impact of the availability of these reliefs.

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