IT12 - Revenue Commissioners

IT 12
General Guide to Taxation
for People with Disabilities
ver 13.11
RPC003465_EN_WB_L_4

Introduction
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 www.revenue.ie or can be requested by contacting Revenue’s
Forms and Leaflets service - LoCall 1890 306 706, (ROI only),
+ 353 1 703 3050 (if calling from abroad). This is an automated
telephone service and you will be asked to give your name, address
and the title of the leaflet you require.
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.
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Note: Guide Dog Allowance is due where an individual and/
or their spouse or civil partner who is regarded as blind at any
time during the tax 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
covenant to a permanently incapacitated minor child, i.e. under
18 years of age.
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.
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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.
Health/Medical Expenses
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 individual.
This relief is allowed at the standard rate of tax (20%) with the
exception of nursing home expenditure which is allowable at the
individual’s highest rate of tax (20% or 41%).
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 under 18 years of age and is permanently incapacitated
either physically or mentally, or
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• if over 18 years of age at the commencement of the tax
year and is permanently incapacitated either physically
or mentally from maintaining himself or herself and had
become so permanently incapacitated before reaching 21
years, or
• had become so permanently incapacitated after reaching
21 years, but while he or she has been in receipt of fulltime
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 for whom the claimant has custody of
and maintains at his or her own expense and who is
permanently incapacitated.
Where more than one child is permanently incapacitated, a tax
credit may be claimed for each child.
For further information see Leaflet IT18 - Incapacitated Child
Tax Credit.
How do I claim these Tax credits/reliefs?
Complete the relevant claim form available either on
www.revenue.ie or attached to the Revenue information leaflet
dealing with the subject and return it to your Revenue office.
The return address can be found on any correspondence you
have received from Revenue. (e.g. Tax Credit Certificate) or if
you visit www.revenue.ie and enter your PPS number into our
Contact Locator, the name, address and contact details of your
Revenue office will be displayed.
Certain Tax credits and reliefs can be claimed through PAYE
Anytime which is Revenue’s On-Line service for PAYE
employees. For further information and to register for PAYE
Anytime, visit www.revenue.ie.
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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 tax 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% 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.
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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. Contact your Revenue office for further
information.
Lump Sums
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 and Children 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, etc. 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% 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.
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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. Contact your Revenue
office for further information.
Miscellaneous
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.
Note: All Department of Social Protection payments and income
already subjected to DIRT are exempt from USC.
Further information on USC and a complete list of USC exempt
incomes are available on www.revenue.ie
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 on Capital Acquisitions Tax:
• Visit: www.revenue.ie, or
• E-mail: catdr@revenue.ie, or
• Telephone: LoCall 1890 20 11 04, or if calling from outside
the Republic of Ireland: +353 1 865 5000
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VAT Refunds
Repayment of VAT paid can be claimed on the purchase or
importation of certain special aids and appliances, including parts
and accessories, i.e. assistive technology, braille books, braille
writing equipment, braille converters, etc. Individuals who purchase
an aid or appliance for a disabled person can claim a VAT refund
provided they meet certain eligibility conditions.
Applications for repayment should be made on Form VAT 61A -
Claim for Refund of Value-Added Tax (VAT).
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.
4-year time limit
A claim for tax relief must be made within four years after the end
of the tax year to which the claim relates.
Accessibility
To obtain this or other leaflets, in an alternative format, contact the
Revenue Access Officer at: accessofficer@revenue.ie
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Further information
This leaflet is for general information only. For further information
visit www.revenue.ie or contact your Regional LoCall
service.
If you are taxed under the PAYE system your tax affairs are
dealt with in the Region where you live. If you are self assessed
you should contact the Revenue office shown on your Notice of
Assessment.
• Border Midlands West Region 1890 777 425
Cavan, Donegal, Galway, Leitrim, Longford,
Louth, Mayo, Monaghan, Offaly, Roscommon,
Sligo, Westmeath
• Dublin Region 1890 333 425
Dublin (City and County)
• East & South East Region 1890 444 425
Carlow, Kildare, Kilkenny, Laois,
Meath, Tipperary, Waterford,
Wexford, Wicklow
• South West Region 1890 222 425
Clare, Cork, Kerry, Limerick
Please note that the rates charged for the use of 1890 (LoCall)
numbers may vary among different service providers.
If calling from outside the Republic of Ireland, please telephone
+353 1 7023011.
Legal Disclaimer
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.
Revenue Commissioners
November 2013
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