Older Person

Introduction

Copies of the leaflets and forms which are referred to can be downloaded, picked up at your local tax office or obtained by telephoning our Forms and Leaflets Service at 1890 30 67 06 or 00353 1 70 23 050 for callers outside the Republic of Ireland. This is an automated telephone service and you will be asked to give your name, address and the title of the leaflet you want.

For details of the current amount of any of the tax allowances mentioned please refer to Leaflet IT1 - Tax Credits, Reliefs & Rates.

Back to Top

Income Tax

This section describes reliefs and allowances which may reduce the amount of tax which you will have to pay on your income. They may also benefit members of your family. If you are exempt from paying income tax or if you qualify for marginal relief the allowances outlined in this section do not apply to you.

  • Age Tax Credit - is available where you or your spouse is 65 years of age or over in the tax year. You should let your tax office know when you or your spouse reach that age.
  • Blind Person's Tax Credit - is available if you are regarded as blind. This allowance is also due for your spouse if he/she is regarded as blind. Download Leaflet IT 35 - Blind Persons Allowances & Reliefs.
  • Deeds of Covenant - relief of up to 5% of your total income is available on a Deed of Covenant in favour of a person aged 65 and over. This 5% restriction does not apply where the person receiving the covenant is permanently incapacitated. Download pdfLeaflet IT 7 - Covenants to Individuals (PDF, 361KB).
  • Dependent Relative Tax Credit - is available if you maintain at your own expense:
    • A son or daughter, who lives with you and on whom you depend because of old age or infirmity.
    • A relative who is unable, due to old age or infirmity, to maintain himself or herself. Download pdfLeaflet IT 46 - Dependent Relative Tax Credit (PDF, 57KB).
  • Incapacitated Person - Allowance for Employing a Carer - if you or your spouse are incapacitated, and you employ someone to care for the incapacitated person, you can claim for the cost of the employment. This relief is also available to family members who employ a carer. Download pdfLeaflet IT 47 - Employed Person Taking Care of an Incapacitated Individual (PDF, 58KB).
  • Service Charges - income tax relief at the standard rate of 20% is available if you pay service charges in full and on time. Alternatively, if a son or daughter who lives with you pays the service charges, they may claim the relief. Download pdfLeaflet IT 27 - Tax Relief for Service Charges (PDF, 57KB).
  • Exemption - you or you and your spouse will not have to pay tax if your total income is less than a certain limit. The limits vary depending on your age and marital status. Marginal Relief is available where your total income is slightly over the exemption limit. Leaflet IT 8 - Income Tax Exemption & Marginal Relief.
  • Medical Expenses Relief - is available for most unreimbursed, non-routine medical and dental expenses e.g. cost of doctors visits, maintenance or treatment in a hospital/approved nursing home, transport by ambulance, specialised dental treatment and certain items prescribed by a doctor.
  • Example of some items which qualify for relief
    • Cost of doctors/consultants visits
    • Certain items prescribed by a doctor/consultant, (see below)
    • Maintenance or treatment in a hospital
    • Maintenance in an approved nursing home (The nursing home must be approved by the Minister for Health and Children or approved for the purposes of health expenses relief by the Minister for Finance after consultation with the Minister for Health. See list of Approved Hospitals and Nursing Homes).
    • Transport by ambulance
    • Specialised dental treatment
    • Kidney patients expenses (up to a maximum amount depending on whether the patient uses Hospital Dialysis, Home Dialysis or CAPD)
    • Certain items of expenditure in respect of a child suffering from a serious life threatening illness.
  • The following where prescribed by a doctor qualify for medical expenses relief:
    • Drugs and medicines
    • Diagnostic procedures
    • Orthoptic or similar treatment
    • Hearing Aid
    • False Eye
    • Orthopaedic bed/chair
    • Wheelchair/Wheelchair lift (no relief is due for alteration to the building to facilitate a lift)
    • Glucometer machine for a diabetic
    • Engaging a qualified nurse in the case of a serious illness
    • Physiotherapy or similar treatment
    • Cost of a computer where it is necessary to alleviate communication problems of a severely handicapped person
    • Cost of gluten free food for coeliacs. As this condition is generally ongoing, a letter, instead of prescriptions, from a doctor stating that the taxpayer is a coeliac sufferer is acceptable.
  • Where qualifying health care is only available outside Ireland, reasonable travelling and accommodation expenses can also be claimed.
  • Items which do not qualify
    • Relief is not given in respect of routine dental, ophthalmic or maternity treatment.
    • Routine dental treatment covers extractions, scaling and filling of teeth, and provision and repairing of artificial teeth and dentures
    • Routine ophthalmic treatment covers sight testing, provision and maintenance of spectacles and contact lenses
    • Routine maternity treatment covers the first fourteen days of treatment in a hospital and all treatment and care not provided by the hospital.

Back to Top

Capital Gains Tax

Principal Private Residence

If you sell your home (including grounds of up to one acre) and the house has been occupied as your sole or main residence throughout your period of ownership you may be entitled to full Principal Private Residence relief and thus exempt from capital gains tax on the sale. Examples of where this relief may be reduced would be where the home has also been used for business purposes or is being sold as development land.

Business/Farm

If you are aged 55 or over you may be entitled to relief from Capital Gains Tax if you sell your business, farm or shares in a family company which you have owned for at least ten years. Full relief, subject to certain conditions, is available where the assets are:

  • Transferred or sold to a son or daughter
  • Sold to a niece or nephew who has worked full time on the farm or in the business for the previous five years
  • Sold to someone other than a son or daughter and the total proceeds of the sale(s) are not more than €750,000.

This relief applies to farm property, transferred by lease as part of the EU Early Retirement Scheme, provided it first satisfies the 10 year qualifying requirement.

Marginal relief may be due where the proceeds do not greatly exceed €750,000.

Back to Top

Capital Acquisitions Tax

Gifts or inheritances from a spouse are entirely exempt from Gift Tax or Inheritance Tax regardless of the amount involved. Each child can receive gifts or inheritances of up to €414,799 in 2010, tax free from their parents provided no previous gifts or inheritances were taken by the child since 5th December 1991.

Dwelling House Exemption

An exemption from Gift Tax or Inheritance Tax in respect of a dwelling house exists where the beneficiary has been living in the house for 3 years prior to the gift or inheritance and stays there for a further 6 years. The beneficiary cannot have an interest in any other residential dwelling. In the case of a gift, this exemption will not apply if the disponer lived in the house for the 3 year period before the gift, unless the person giving the gift was required, due to ill-health or infirmity, to depend on the services of the donee for that period.

Exemption Relating to Medical Expenses of Incapacitated Persons

If you are permanently incapacitated because of physical or mental infirmity, a gift or inheritance taken by you to meet your medical expenses (including for example the cost of nursing home care) is exempt from gift or inheritance tax.

Nursing Homes Support Scheme

The Nursing Homes Support Scheme commenced on 27th October 2009.

The Nursing Homes Support Scheme is a scheme of financial support for people who need long-term nursing home care. Under the scheme, a person can make a contribution towards the cost of their care and the State will pay the balance. This applies whether the nursing home is public, private or voluntary.

Individuals who are assessed as requiring long-term residential care will undergo a financial assessment carried out by the Health Service Executive (HSE).

Full details of the scheme can be found on the Department of Health & Children website www.dohc.ieExternal link.

Ancillary State Support

Under the scheme, individuals will contribute 80% of assessable income and 5% of the value of any assets in excess of the asset disregard per annum. The asset disregard is the amount of one's assets that is totally excluded from the means assessment - €36,000 for an individual or €72,000 for a couple. If the assets include land and property, the 5% contribution based on such assets can be deferred (deferred contribution). This means it does not have to be paid during the person's lifetime [monies advanced by way of ancillary State support] and may be collected from their estate. The principal private residence (PPR) will only be included in the financial assessment for the first 3 years of the person’s time in care.

Revenue's Role

Revenue is responsible for collection and recovery of monies advanced by way of ancillary State support.

When monies advanced become due and payable the HSE will notify the person responsible for the making of the payment - known as the relevant accountable person - as well as notifying Revenue of the amount due. Revenue will then contact the person to make arrangements for the payment.

A payment slip to make the payment will be provided to the person. The payment slip is also available on the Revenue website: pdfNursing Homes Support Scheme Payslip (PDF, 35KB).

Other Useful Information

Deposit Interest

Deposit Interest Retention Tax (DIRT) at 25% is deducted at source by Banks and Building Societies. There is no further tax liability on this interest but it must be declared on your annual tax return. If your total income is below your exemption limit a refund of DIRT tax can be claimed if you or your spouse is aged 65 or over, or permanently incapacitated by reason of mental or physical infirmity.

To claim a refund of DIRT use pdfForm 54D (PDF, 573KB).

Special Savings Accounts

Special Savings Accounts are subject to DIRT deducted at 25%. There is no further tax liability on this interest and it need not be declared to your tax office unless a refund of the DIRT is being claimed. The conditions necessary to qualify for a refund are outlined in the paragraph above.

Social Welfare Pensions

Pensions paid by the Department of Social ProtectionExternal link are taxable and should be declared to the tax office in your tax returns. Tax is not deducted at source by the Department. If a Social Welfare Pension is your only source of income it is unlikely that there will be any tax due as your tax-free allowances or exemption limit will generally cover this income. If you have income in addition to your pension your tax-free allowances will be reduced by the amount of your Social Welfare pension for PAYE purposes. If you pay tax under self assessment your Social Welfare pension will be included in your notice of assessment.

See also pdflist of Social Insurance Pensions and Allowances 2005/2009 (PDF, 53KB).

US Social Security Pensions

From 6 April 1998 an Irish resident in receipt of a United States social security pension is chargeable in Ireland on such pension for income tax purposes. The pension should be declared on your annual tax return. If you have other income which is subject to PAYE your tax-free allowances will be reduced by the amount of your US Social Security pension to collect the tax due. If you pay tax under self assessment the pension will be included in your notice of assessment.

Planning for Retirement

See:

PRSI/Levies

If you are aged 66 or over you are not liable to pay PRSI. The Health Contribution Levy is payable except on payments, including pensions, from the Department of Social ProtectionExternal link.

See Income Levy for information on exemptions applying to older persons.

(Adobe Acrobat Reader PDFExternal link)

Back to Top


Print this page