Jim O'Callaghan (Dublin Bay South, Fianna Fail)
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234. To ask the Minister for Finance if consideration has been given to increasing tax relief on medical expenses currently set at the standard rate of tax; and if he will make a statement on the matter. [42619/24]

Jack Chambers (Dublin West, Fianna Fail)
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Section 469 of the Taxes Consolidation Act 1997 provides for tax relief where an individual proves that they incurred costs in respect of qualifying health expenses. Since 1 January 2009, income tax relief in respect of qualifying health expenses, with the exception of relief in relation to nursing home expenditure, has been granted at the standard rate of tax. Prior to that date, tax relief was available at the taxpayer's marginal rate of income tax. The decision to standardise the health expenses relief was made with a view to widening the tax base and bringing the rate at which relief was granted into line with the majority of tax expenditures. In addition, the standard rating of the relief has made the tax system fairer, in that all beneficiaries may receive tax relief at the same rate, currently 20 per cent.

The rationale behind the income tax relief for health expenses is that it is intended to provide assistance for significant or exceptional health expenses. I would note that this is a broadly availed of relief. In 2022, the cost of tax relief for health expenses (excluding nursing home expenses) was €201.1 million and it was availed of by c. 662,900 claimants. As Minister I must be mindful that the expansion of any tax relief creates a cost to the Exchequer in terms of revenue foregone and that cost must be recovered elsewhere. Tax reliefs, no matter how worthwhile in themselves, reduce the tax base and make general reform of reform of the tax system that much more difficult.

In my view, the availability of tax relief at the standard rate of income tax for health expenses is sufficiently calibrated and is the most appropriate use of fiscal resources. Accordingly, I currently have no plans to increase the relief.