Revealed: How families are missing out on up to €25k in nursing home reliefs
Confusing system to blame as thousands fail to claim back tax
Large numbers of people who have relatives in nursing homes are failing to claim generous tax reliefs because they find the system confusing.
People can claim back up to 40pc of the cost of paying for nursing home care, according to Taxback.com.
But thousands of families are missing out on this.
Having a person cared for in a residential home can cost between €50,000 and €80,000 in nursing home fees and associated medical care charges.
But Eileen Devereux, of Taxback.com, said families can save anywhere between €400 and €25,000 a year by getting the tax back they are entitled to claim.
Taxback.com has teamed up with Nursing Homes Ireland to produce a guide to financing and claiming tax refunds for nursing home fees, and the other costs that form part of residential care.
"We have found that although many people struggle to pay all the associated costs, not everyone is aware of the reliefs and entitlements that already exist that could save them tens of thousands a year," Ms Devereux said.
She said working with families that were funding nursing home fees either directly or indirectly, she has found many are either not claiming for them at all, or are not claiming as much as they could.
Tadhg Daly, of Nursing Homes Ireland, said many people paying for nursing home care were not aware of the tax reliefs available to them.
"We believe there's simply not enough awareness of these tax refunds and the system can be quite confusing, which leads to high levels of tax not being reclaimed by people," he said.All residents and their families should take full advantage of all the tax reliefs that were available to them, he added.
Some 30,000 people are in around 577 nursing homes. These include public, private and voluntary homes across the State.
Some 23,000 of these people are over the age of 65, according to Census 2016 data. Over half of those availing of nursing home care are aged 85-plus, while there are more women than men in residential care.
This cohort of the population is forecast to increase by 46pc by 2021.
"This will lead to a substantial growth in numbers requiring nursing home care and, hence, a corresponding increase in the numbers eligible to claim tax relief," Mr Daly added.
Costs of nursing home care can be crippling even when the person in care qualifies for the Fair Deal scheme.
Extra costs for nursing home residents who are part of the State's Fair Deal scheme have proved hugely controversial lately.
The Health Information and Quality Authority (Hiqa) revealed recently how elderly people in care and their families have been enraged by unfair top-up charges.
In the case of an elderly woman, who is blind, she is being levied €2 a day for a newspaper that she cannot read.
Meanwhile, the State's competition watchdog said last month it was considering launching an investigation into the nursing home sector after reports of potential pricing abuse.
The Competition and Consumer Protection Commission (CCPC) said that it had "serious concerns" about practices in the industry.
How refunds work for those paying fees
If you are paying nursing home fees for yourself or a parent or loved one, you can claim relief on nursing home expenses at your highest rate of tax, subject to certain conditions.
This means that someone who contributes €300 a week to the cost of the care of a relative, and is taxed at the higher rate, can claim back €6,240 at the end of the year.
In this instance the relative in the nursing home does not qualify for the Fair Deal scheme.
In certain circumstances it is possible to claim relief on your nursing home expenses during the tax year.
If you pay for medical costs, either for yourself or a loved one, you can claim medical expenses at a rate of 20pc.
You can claim relief on the cost of purchasing, maintaining, and repairing medical appliances for yourself or on behalf of a loved one that you have been advised to use by a registered practitioner.
Kidney patients are entitled to a number of additional reliefs to the normal health expenses.
For example, you can claim relief on the cost of travelling to and from the hospital if you or your loved one travels regularly for dialysis treatment.
Many people avail of tax relief under the Fair Deal scheme (or the Nursing Homes Support Scheme). Under Fair Deal, you make a contribution towards the cost of the care and, if your contribution is less than the amount of the fees, the HSE will pay the rest.