Disability Information

Income Tax, Allowance and Exemptions

Who Can Qualify For Special Allowances?

Anyone who is permanently incapacitated either physically or mentally such that he/she is unable to maintain himself/herself, may be able to claim one or more of the special allowances available. In addition, parents/guardians and persons who care for dependent relatives may qualify.

What Special Allowances Are Available?

• Incapacitated Child Tax Credit (Leaflet IT18 ) - can be claimed by a parent for a child who is permanently incapacitated either physically or mentally from maintaining himself/herself and had become so before reaching 21 years of age or finishing full-time education.
• One Parent Family Tax Credit (Leaflet IT9) - can be claimed by a single parent (whether widowed, separated, deserted or single parent) with an incapacitated child.
• Blind Person's Tax Credit (Leaflet IT35) - Can be claimed by a person who is regarded as blind. A higher allowance is due where both spouses are blind.
• Guide Dogs Allowance - can be claimed where an individual or his/her spouse has a guide dog and is a registered owner with 'Irish Guide Dogs for the Blind'. After the first claim this allowance is given automatically for each following year, but the local Revenue Office must be notified where the individual ceases to have a guide dog.
• Dependent Relative Tax Credit (Leaflet IT46) (PDF, 57KB) - a person who maintains an incapacitated or elderly relative or a spouse's relative, a widowed mother or mother-in-law or a child on whom he or she is dependent can qualify.
  • If the relative in respect of whom the Dependent Relative allowance is claimed is resident in an approved nursing home, and the individual contributes to the nursing home fees, tax relief, as medical expenses can be claimed for the actual cost incurred.
    • Form Med 1 - Health Expenses - Claim for Relief (PDF, 342KB)
    • List of Approved Hospitals and Nursing Homes
• Incapacitated Person - Allowance for Employing a Carer (Leaflet IT47) (PDF, 58KB) - can be claimed where an individual employs a person to take care of a family member who is permanently incapacitated.
• Covenants (Leaflet IT 7) (PDF, 361KB) - relief is available in respect of a properly drawn up Deed of Covenant in favour of a permanently incapacitated individual. As a general rule a parent cannot however covenant to a permanently incapacitated minor child i.e. under 18 years and unmarried.
• Revenue Job Assist (Leaflet IT58) - provides tax relief to encourage the long-term unemployed to take up employment and also gives an incentive to employers to employ such individuals. With effect from 1 January 1999, if an individual who was in receipt of Disability Allowance or Blind Person's Pension for a period of at least 12 months takes up a qualifying employment he or she will qualify for the Job Assist Allowance and his/her employer will qualify for the Double Wages Deduction.
• Medical Expenses Relief - available in respect of unreimbursed nursing home, doctors', hospital and other health expenses. Note: S.469 TCA 1997 as amended, The definition of 'healthcare' was revised to include 'care received by a woman in respect of pregnancy'.
  • Leaflet IT 6 - Medical Expenses Relief
  • Form Med 1 - Health Expenses - Claim for Relief (PDF, 342KB)
  • List of Approved Hospitals and Nursing Homes
  • Qualifying Health Expenses (IT6)

What Income is Exempt From Tax?

The following income is exempt from income tax in the hands of a disabled person provided it is included in the annual tax return:

• Form 54 Claims - Income Tax Repayment Claim for the year 2010 (PDF, 573KB) (Incorporating Form 54D - Claim for Repayment of Deposit Interest Retention Tax for the year 2010) - if you are permanently incapacitated or over 65 years you could be entitled to a refund of deposit interest retention tax deducted provided your gross income is exempt from tax or marginally over the exemption limit.
• Leasing of Farmland - rent from farmland may be exempt if you are incapacitated or over 55 years of age.
• Payments to or in respect of Thalidomide Children where payment is either made by the Department of Health or the Hilfswerk Für Behinderte Kinder Foundation. Also exempt is income arising from the investment of these payments, for example deposit interest, rental income, dividend income etc.
• Personal Injury Compensation Payments - Compensation payments received are exempt from tax. Also exempt for 1990/91 and subsequent years is income arising from the investment of certain compensation payments where the compensation payment is both in respect of a personal injury and arising from a civil action for damages. This income must also be the only or main source of income. The injury must have given rise to permanent physical or mental incapacity which prevents a person from maintaining himself or herself.
• Hepatitis C Compensation Payments - payments made by the Hepatitis C Tribunal are exempt from tax. Any investment income arising from the compensation payment is exempt from income tax if the individual is permanently and totally incapacitated by reason of mental or physical infirmity from maintaining himself or herself. The investment income must be the sole or main income of the individual concerned.
• Lump Sums can be exempt where paid by an employer because of injury or disability.
• Disabled Person's Maintenance Allowance where paid by a Health Board is not regarded as income for tax purposes and need not be included in the annual tax return.

Special Trusts for Permanently Incapacitated Individuals

Special tax treatment applies to income arising, following the creation of a trust whose funds have arisen as a result of public subscriptions raised on behalf of an individual or individuals who are permanently and totally incapacitated from maintaining themselves.

• The trustees of a qualifying trust are exempt from income tax in respect of income arising to them from the investment of the trust funds.
• The trustees are entitled to reclaim any DIRT paid by them on or after 6 April 1997.
• The incapacitated individual is exempt from tax in respect of payments made by the trustees to or for his/her benefit, and in respect of any income arising from the investment of such payments, provided that the income to be exempted is the individual's sole or main income.

The exemption applies for 1997/98 and subsequent tax years.

Generally, in order for a trust to be a qualifying trust, any one person may not contribute more than 30% of the total subscriptions raised. (This condition does not apply where the total subscriptions do not exceed €381,000)

The effect of this exemption is to ensure that funds raised by public subscription for incapacitated individuals are treated in the same way as court awards for personal injury.

How Do I Claim for the above allowances and exemptions?

Simply contact your tax office specifying the allowance claimed. A first claim should be accompanied by a doctor's certificate showing:

• the date the incapacity first arose
• the degree and extent of the incapacity
• whether the incapacity prevents you from maintaining yourself.

The doctor's certificate need only be sent in with the initial claim.

Value Added Tax and Vehicle Registration Tax

Vehicles

Repayment may be claimed of VAT paid in relation to vehicles (a) for use by severely and permanently disabled persons as drivers or passengers and (b) for use by organisations for the transport of severely and permanently disabled persons. There is also provision for the repayment of, and in certain circumstances, the remission of Vehicle Registration Tax. Application forms and public notices are available from the Central Repayments Office, Disabled Drivers Section, Office of the Revenue Commissioners, M: TEK II Building, Armagh Road, Co. Monaghan (Tel: 047 - 62100).

Equipment for disabled persons

Repayment may be claimed by disabled persons of the VAT paid on certain special aids and appliances. The relief is also available in certain circumstances to persons other than disabled persons who purchase such goods for handing over to a particular disabled person. Repayment claim form VAT 61A (PDF, 127KB)

• Radios for the blind - An institution or society having for its primary object the amelioration of the lot of blind persons may claim repayment of the VAT borne or paid by it on the purchase or importation of radio sets which are intended for the use of blind persons. Repayment claim form VAT 59 (PDF, 119KB)
• Enquiries - Except where stated otherwise in the preceding paragraphs, all enquiries relating to repayments to unregistered persons should be made to the VAT Unregistered Repayments, 3rd Floor, River House, Charlottes Quay, Limerick. (Telephone 061-212799, LoCall 1890 25 24 49). Similarly, all claim forms referred to, except where stated otherwise, can be obtained, on request, from that Office also.

Vehicle Registration Tax

VRT7 - Vehicles for People with Disabilities - Tax Relief Scheme

General

Facilities for the hearing impaired

We have installed loop counter systems to assist hearing aid users in eight of our public offices in Dublin Cork and Limerick.

Facilities for Visually Impaired Customers

• Leaflet IT35 - Blind Persons' Tax Credits & Reliefs - provides information on Tax Credits and Reliefs available for visually impaired customers,
• We try to provide as comprehensive a service as possible to our visually impaired customers over the telephone and ensure that correspondence and form filling is kept to a minimum.
• A tax support service for our visually impaired customers is available by telephoning your Regional Revenue Office whose LoCall number is listed below:

Where requested to, we will arrange for a visit to be made to a visually impaired customer to assist them with form-filling etc.

(Adobe Acrobat Reader PDF )

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