General Guide to Taxation for People with Disabilities - IT12
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This is a guide to the tax credits, reliefs and exemptions that may be claimed by an individual with disabilities of a permanent nature. In general, individuals with disabilities are liable to pay tax on their income in the same way as everyone else, however additional tax credits and exemptions may be claimed.
Revenue information leaflets referred to in this guide are available on this website.
Who can qualify for these Tax Credits?
Anyone who is permanently incapacitated either physically or mentally and unable to maintain themselves, may be entitled to claim one or more of the additional tax credits available. In addition, individuals who care for dependent relatives, or who incur expenses on their behalf may also qualify for some of these tax credits and reliefs.
What Tax Credits and reliefs are available?
A complete list of all tax credits is available in Leaflet IT1 - Tax Credits, Reliefs & Rates.
The following is a summary of specific tax credits and reliefs that may be claimed.
Blind Person’s Tax Credit
This tax credit can be claimed by a person who is regarded as blind. If married or in a civil partnership, and both individuals are regarded as blind, they will each qualify for this tax credit.
More detailed information is given in Leaflet IT35 - Blind Person’s Tax Credit.
Note: Tax relief for having a Guide Dog is due where an individual and / or their spouse or civil partner who is regarded as blind at any time during the year, maintains a trained Guide Dog. The individual must hold a letter from 'Irish Guide Dogs for the Blind', in respect of each dog maintained, confirming that they are a registered owner.
Deed of Covenant
A Deed of Covenant is a legally binding written agreement made by an individual to pay an agreed amount to another individual, without receiving any benefit in return. Relief is available in respect of a properly drawn up Deed of Covenant in favour of a permanently incapacitated individual. However, parents cannot claim tax relief on covenants made in favour of a permanently incapacitated child who is aged under 18.
For further information please see Leaflet IT7 - Covenants to Individuals.
Dependent Relative Tax Credit
This tax credit can be claimed by a person who maintains:
- a relative, including a relative of their spouse or civil partner, who is unable due to old age or infirmity, to maintain himself or herself
- the widowed father or mother of the claimant, or of the claimant’s spouse or civil partner, whether incapacitated or not
- a son or daughter, or a child of their spouse or civil partner, who resides with them and on whose services the claimant is compelled to depend upon due to old age or infirmity.
For further information please see Leaflet IT46 - Dependent Relative Tax Credit.
Employed person taking care of an Incapacitated Individual
This relief can be claimed in respect of the cost of employing a person (including a person whose services are provided by or through an agency) to take care of either:
- a family member, including the claimant, their spouse or civil partner, who is totally incapacitated by reason of physical or mental infirmity, or
- a relative of the claimant, or a relative of the claimant’s spouse or civil partner, who is totally incapacitated by reason of physical or mental infirmity. A "relative" in this context includes an individual in respect of whom the claimant is or was the legal guardian.
Tax Relief is available in respect of un-reimbursed medical or non-routine dental expenses paid, either on the claimant’s own behalf or on behalf of another person.
This relief is allowed at the standard rate of tax with the exception of nursing home expenditure which is allowable at the claimant’s highest rate of tax.
Details on the main medical expenses that qualify for relief are given in Leaflet IT 6 - Guide to claiming Health or Medical Expenses Relief.
Incapacitated Child Tax Credit
This tax credit can be claimed where a claimant proves that he or she has living, at any time during the tax year, any child who:
- is aged under 18 and is permanently incapacitated either physically or mentally, or
- if aged over 18 at the start of the year and is permanently incapacitated either physically or mentally from maintaining himself or herself and had become so permanently incapacitated before reaching 21, or
- had become so permanently incapacitated after reaching 21, but while they were in receipt of full-time education at any university, college, school or other educational establishment, or while training full-time for a trade or profession for a minimum of two years,
- is any child who is permanently incapaciated, for whom the claimant has custody of and maintains at his or her own expense.
Where more than one child is permanently incapacitated, this tax credit may be claimed for each child.
For further information see Leaflet IT18 - Incapacitated Child Tax Credit.
How are Tax Credits claimed?
The quickest and easiest way for individuals taxed under the PAYE system to claim most tax credits is online using PAYE Services, which is available in myAccount.
Certain tax credits cannot be claimed online and a claim form must be completed and returned to your Revenue office. The address to send the completed form to can be found on any correspondence received from Revenue. Alternatively, use our Contact Locator to obtain the address.
The relevant claim forms are available on this website.
If there is no claim form required you can apply for the tax credit through MyEquiries in myAccount.
If you pay tax under the self-assessment system tax credits can be claimed by completing the relevant section(s) on your annual tax return.
What incomes are exempt from tax?
The following sources of income and gains are exempt from income tax and capital gains tax for people with incapacities.
Deposit Interest Retention Tax (DIRT)
An individual, their spouse or civil partner, who is permanently incapacitated, or aged over 65 years during the year may be entitled to exemption from DIRT or to a refund of DIRT where deducted, provided their total income is below the relevant annual exemption limit.
For further information see Leaflet IT8 - Income Tax Exemption and Marginal Relief and DE2 - Dirt-free Deposit Accounts for Permanently Incapacitated individuals.
Disabled Persons Maintenance Allowance
This allowance, paid by the Health Service Executive, is exempt from tax.
Hepatitis C Compensation payments and payments made by trustees of the Haemophilia HIV Trust
Payments made by the Tribunal established under the Hepatitis C Compensation Tribunal Act 1997 and payments made to the beneficiaries of the Haemophilia HIV Trust are exempt from income tax and capital gains tax. Also exempt is income arising from the investment of such payments and gains arising on the disposal of assets acquired with such payments, provided the aggregate of the gains and income exceeds 50 per cent of the aggregate of the person’s total income and gains, if the individual is permanently and totally incapacitated from maintaining themselves as a result of the infection.
Payments received following the institution of proceedings on behalf of a person of a civil action for damages in respect of personal injury under this heading are also exempt.
Leasing of Farmland
Rent received from farmland can be exempt if an individual is permanently incapacitated from carrying on the trade, provided certain conditions are met.
Lump Sum payments can be exempt where paid by an employer because of injury or disability.
For further information see Leaflet IT21 – Lump Sum Payments.
Payments to or in respect of Thalidomide Persons
Payments made by the Department of Health or by the foundation known as the Conterganstiftung Für behinderte Menschen are exempt from income tax. Also exempt is income arising from the investment of such payments for example deposit interest, rental income, dividend income). Gains arising on the disposal of assets acquired with such payments or the investment of such payments are exempt from capital gains tax.
Personal Injury Compensation Payments
Certain compensation payments received are exempt from income tax. Also income arising from the investment of such payments, and gains arising on the disposal of assets acquired with such payments or the investment of such payments, may be exempt, provided the aggregate of the gains and income exceeds 50 per cent of the aggregate of the person’s total income and gains. The injury must have given rise to a permanent and total mental or physical incapacity which prevents the person from maintaining himself or herself.
For further information see Leaflet IT13 - Personal Injury Compensation Payments
Special Trusts for Permanently Incapacitated Individuals
Special tax treatment applies on income arising following the creation of a trust whose funds have arisen as a result of public subscription raised on behalf of an individual or individuals who are permanently and totally incapacitated.
Universal Social Charge (USC)
A reduced rate of USC applies to individuals in possession of a full medical card, including a Health Amendment Act card and where their total income for the year is below a specific amount.
The current USC rates and thresholds can be found in Leaflet IT1 - Tax Credits, Reliefs and Rates.
Capital Acquisitions Tax
Exemption Relating to Medical Expenses of Incapacitated Persons
Gifts or inheritances taken by an individual permanently incapacitated because of physical or mental infirmity, to meet their medical expenses (including, for example, the cost of nursing home care) is exempt from gift or inheritance tax.
For more information see Capital Acquisitions Tax
Repayment of VAT paid can be claimed on the purchase or importation of certain special aids and appliances, including parts and accessories (for example, assistive technology, braille books, braille writing equipment, braille converters). Individuals who purchase an aid or appliance for a disabled person can claim a VAT refund provided certain eligibility conditions are met.
Applications for repayment should be made on Form VAT 61A - Claim for Refund of Value-Added Tax (VAT) (PDF, 127KB).
Drivers and Passengers with Disabilities
A range of tax reliefs may be claimed by persons with disabilities on the purchase of motor vehicles.
More detailed information is available in Leaflet VRT7 – Drivers and Passengers with Disabilities (PDF, 236KB).
Time Limit for Repayment Claims
A claim for repayment of tax must be made within four years after the end of the tax year to which the claim relates. For example, claims for 2013 must be made by 31 December 2017. Please note you must have paid income tax during the year of your claim in order to receive a repayment. If you owe income tax to Revenue for an earlier year, your repayment may be reduced by this amount.
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If you are taxed under the Self-Assessment system you may contact the Revenue office shown on your Notice of Assessment acknowledgment letter.
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This leaflet is intended to describe the subject in general terms. As such, it does not attempt to cover every issue which may arise in relation to the subject. It does not purport to be a legal interpretation of the statutory provisions and consequently, responsibility cannot be accepted for any liability incurred or loss suffered as a result of relying on any matter published herein.