Michael McGrath (Cork South Central, Fianna Fail)
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The legislation governing entitlement to the incapacitated child tax credit is contained in section 465 of the Taxes Consolidation Act 1997, as amended. An individual is entitled to the incapacitated child tax credit if he or she proves that at any time during the year of assessment, he or she has a child who is:

• under 18 years of age and is permanently incapacitated by reason of mental or physical infirmity, or
• if over the age of 18 years at the beginning of the year, is permanently incapacitated from maintaining himself/herself and had become so permanently incapacitated either before reaching 21 years of age or after that age while receiving full-time instruction at any university, college, school or other educational establishment.

The incapacitated child tax credit is valued at €3,300 per qualifying child for the 2023 year of assessment. As announced in Budget 2024, I am increasing the incapacitated child tax credit by €200 to €3,500 per qualifying child for 2024 and subsequent years.

A child under 18 is regarded as permanently incapacitated by reason of mental or physical infirmity only if that infirmity is such that, if the child were over 18, there would be a reasonable expectation that he or she would be incapacitated from maintaining himself or herself.

For the purposes of the credit, “maintaining” means the ability to support oneself by earning a living from working. Where the child is under 18, the incapacity must be such that, even with the benefit of any treatment, device, medication or therapy, the child is unlikely to be able to maintain themselves when he or she reaches 18.

In order to establish entitlement to the credit in respect of any such child, medical evidence provided by the child’s medical practitioner is required to confirm both the extent of the incapacity and whether the incapacity permanently prevents the child from being able, in the long term, to maintain himself or herself independently when over the age of 18 years.

Detailed information on the operation of the tax credit is available on Revenue’s website, at: www.revenue.ie/en/personal-tax-credits-reliefs-and-exemptions/children/incapacitated-child-credit/index.aspx.

It is noted that this credit applies in addition to other various supports from other parts of Government, including the Department of Social Protection, the Department of Health and the Department of Children, Disability, Equality and Integration that assist those with caring responsibilities. I also note that, in its 2009 report, the former Commission on Taxation recommended for reasons of equity that, ultimately, “the appropriate level of State support be provided to all incapacitated children through direct expenditure and that the tax credit be discontinued”. Such a course of action would obviously require very careful consideration and is not on the agenda at the present time. As with all tax measures and reliefs, the incapacitated child tax credit is kept under regular review by my Department as part of its ongoing programme of work.