Bernard Durkan (Kildare North, Fine Gael)
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Question 54: To ask the Minister for Finance the full extent to which income tax relief is available in households when more than one student in the household is attending a third level institution; and if he will make a statement on the matter. [26791/11]

Michael Noonan (Limerick City, Fine Gael)
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Section 473A of the Taxes Consolidation Act 1997 provides, subject to certain conditions, tax relief at the standard rate of income tax (20%) as regards qualifying fees paid by an individual in respect of a third level education course including a postgraduate course. Qualifying fees means tuition fees in respect of an approved course at an approved college and includes what is referred to as the "student contribution". For the tax year 2011 and subsequent tax years, the maximum annual relief for tuition fees (including the student contribution of €2,000) is €7,000 per course.

The tax relief is confined to tuition fees only. Tuition fees that are, or will be, met directly or indirectly by grants, scholarships, employer contribution or other means are to be deducted in arriving at the net fees qualifying for tax relief.

An individual can claim tax relief on fees paid by him/her in respect of an approved third level course pursued by him or her and on fees paid by him or her in respect of an approved course pursued by other individuals (e.g. a son or daughter).

A claim for relief may be in respect of a number of students – the maximum amount allowable (i.e. €7,000) applies per course rather than per claim. However:

the first €2,000 of all fees claimed by an individual does not attract tax relief where any one of the students to whom the claim refers is a full time student;

the first €1,000 of all fees claimed by an individual does not attract tax relief where all of the students to whom the claim refers are part-time students.

The disregard of €2,000 or €1,000, as the case may be, applies to each claim, the subject of which may be one or more students. The general effect of this approach is that all claimants will get full tax relief on an amount equal to the student contribution of €2,000 for the second and subsequent students in their claim.

The examples below are premised on a claimant who is within the tax net paying the third level fees. Different scenarios may arise where the student pays the fees or where a parent is not in the tax net and thus could not benefit from tax relief.

Example 1.

Claimant with one student in undergraduate third level education

Example 2.

Claimant with three students in undergraduate third level education

Example 3.

Claimant with one student in part-time third level education

Example 4.

Claimant with two students in third level education

Claimant with two students in third level education