Written answers

Thursday, 28 April 2022

Photo of Holly CairnsHolly Cairns (Cork South West, Social Democrats)
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185. To ask the Minister for Finance the criteria that are used in assessing the incapacitated child tax credit regarding the requirement in cases in which there is a reasonable expectation that the child will be unable to maintain themselves when over 18 years of age; the forms of evidence that are acceptable in such cases; and if he will make a statement on the matter. [21649/22]

Photo of Holly CairnsHolly Cairns (Cork South West, Social Democrats)
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186. To ask the Minister for Finance his views on broadening the criteria for the incapacitated child tax credit to include children who may have temporary or partial incapacitations. [21650/22]

Photo of Paschal DonohoePaschal Donohoe (Dublin Central, Fine Gael)
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I propose to take Questions Nos. 185 and 186 together.

The Incapacitated Child Tax Credit (ICTC) is provided for in section 465 of the Taxes Consolidation Act 1997 (TCA 1997) and is available to any individual who proves that he or she has living, at any time during a year of assessment, a child who:

- if under the age of 18, is permanently incapacitated by reason of mental or physical infirmity to such an extent that there is a reasonable expectation that the child would be incapacitated from maintaining him or herself if they were over the age of 18; or

- if over the age of 18, is permanently incapacitated by reason of mental or physical infirmity from maintaining him or herself and had become so incapacitated either before attaining the age of 21 or whilst in full-time instruction at any university, college school or other educational establishment.

The credit may also be available where an individual has custody of and maintains at his or her own expense any child who fulfils the above criteria.

If the child is under 18, the incapacity must be such that the child would be unlikely to be able to maintain him or herself when they reach the age of 18 even with the benefit of any treatment, device, medication or therapy. For the purposes of this credit, “maintaining” means the ability to support oneself by earning a living from working.

Whether or not an individual is entitled to claim the ICTC, and the nature of the supporting documentation required to prove that entitlement, will be determined having due regard to the facts and circumstances of each individual case, and the nature of the individual child’s incapacity.

In practice, Revenue will generally accept certification from a doctor as to whether:

- there is a reasonable expectation that a child will be incapacitated from maintaining himself or herself in the future; and

- a particular incapacity can be improved by the use of any treatment, device, medication or therapy,

where such certification fully addresses the key elements required in order to prove eligibility for the credit.

In certain cases, having due regard to the specific nature of the incapacity, it is considered reasonable to expect that a clinical diagnosis would have been made by a consultant.

The ICTC is valued at €3,300 and a separate credit is available in respect of each child who is permanently incapacitated. If an individual has more than one child who is permanently incapacitated, he or she may therefore claim a credit for each such child. However, only one credit may be claimed in respect of an individual child. Therefore, if a permanently incapacitated child is maintained by more than one person, the tax credit is divided between those persons who maintain the child.

Further information in relation the ICTC can be found on Revenue’s website or in Tax and Duty Manual Part 15-01-05, both of which may be found at the links below:

- Revenue website: www.revenue.ie/en/personal-tax-credits-reliefs-and-exemptions/children/incapacitated-child-credit/index.aspx

- Tax and Duty Manual Part 15-01-05: www.revenue.ie/en/tax-professionals/tdm/income-tax-capital-gains-tax-corporation-tax/part-15/15-01-05.pdf.

Regarding broadening the criteria for the ICTC to include circumstances where a child has a temporary or a partial incapacity, in practice such extensions to the criteria would be extremely difficult to administer.  In particular, determining what constitutes temporary or partial incapacity would introduce a significant degree of subjectivity into the conditions for the tax credit. Due to this, I have no plans to amend the credit in the near future.

Finally, I would note that this credit is available in addition to other supports provided by Government bodies such as the Department of Health, the Department of Social Protection and the Department of Children, Equality, Disability, Integration and Youth to assist those with caring responsibilities.

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