Ned O'Keeffe (Cork East, Fianna Fail)
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Question 110: To ask the Minister for Finance if he will examine the tax refund scheme in respect of medical or dental expenses where a person does not pay any income tax in year one but incurs medical and dental expenditure during that year and where during the following year pays income tax which exceeds the medical or dental expenses for the two years, that he would permit this taxpayer to claim the refund of tax in respect of both years. [42149/06]

Brian Cowen (Laois-Offaly, Fianna Fail)
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Section 469 of the Taxes Consolidation Act 1997 provides for relief from income tax in respect of certain qualifying health expenses incurred by an individual in respect of himself/herself and/or on behalf of his or her relatives or dependents in a tax year. Section 469(5) provides that where health expenses are incurred in one year but not paid until a following year, an individual has the option to claim health expenses tax relief either in the year in which the expense was incurred or in the year in which payment in respect of such expense was made. However, where an individual incurs health expenses in a tax year and pays for such expense in that year, any claim for health expenses must relate to that year.

I am informed by the Revenue Commissioners that, in the circumstances described by the Deputy, that is, where the individual incurred and paid for qualifying medical or dental treatment in two separate tax years but paid tax in only one of those years, the individual would not be entitled to tax relief in respect of the health expense incurred and paid for in the first year. However, the person would be entitled to claim tax relief in respect of health expenses incurred and paid in the second year.

Health expenses relief is generally provided by way of repayment of tax paid and only to the extent that tax has been paid. Where a person has paid for qualifying health expenses but has not paid tax in a year, it is not possible to provide relief under the scheme to him or her. I have no plans at present to change this position.