Danny Healy-Rae
Ceist:308. Deputy Danny Healy-Rae asked the Minister for Finance to review the tax relief on private health insurance (details supplied); and if he will make a statement on the matter. [3484/25]
Amharc ar fhreagraWednesday, 5 February 2025
Ceisteanna (308)
Freagraí scríofa
Section 470 of the Taxes Consolidation Act 1997 provides for tax relief in respect of payments made to authorised insurers under relevant contracts in respect of medical insurance and dental insurance.
Income tax relief is granted up to the standard rate of tax (currently 20%), subject to certain limitations outlined below, on the amount of the premium, that covers benefits being the reimbursement or discharge of health expenses (including non-routine dental expenses) within the meaning of section 469 TCA 1997 (“health expenses eligible for tax relief”).
A policy of health insurance may cover both health expenses eligible for tax relief and health expenses not eligible for tax relief, in this case a rate of tax relief less than the standard rate may apply. This rate is referred to as a “blended rate” and is based on the information provided to Revenue by the respective health insurance provider. The rate of tax relief applicable to a particular policy of health insurance is available from the respective health insurance provider.
The amount qualifying for tax relief is limited;
• in the case of an adult, the lesser of the eligible premium paid or €1,000 per annum, and,
• in the case of a child, the lesser of the eligible premium paid or €500 per annum. A child for all such policies is a child under 21 years of age in respect of whom a child premium has been paid.
Tax relief is granted at source where an individual purchases a policy of health/dental insurance. This is given as a discount on the cost of the policy whereby the insurance provider charges the premium less the tax relief to the individual.
If an individual has a policy of medical/dental insurance, which is paid for by their employer, on which they are taxed through payroll as a benefit-in-kind (“BIK”), tax relief may be claimed by filing an income tax return. For self-assessed taxpayers this can be done by filing a Form 11 through Revenue Online Service (“ROS”). For PAYE taxpayers this can be done by filing a Form 12 through Revenue's “My Account” facility.
Further detailed guidance on the tax treatment of medical insurance premiums can be found on the Revenue Website –
www.revenue.ie/en/personal-tax-credits-reliefs-and-exemptions/health-and-age/medical-insurance-premiums/index.aspx
To answer the Deputy’s specific question, I have no current plans to review the relief. However, it is important to point out that the current ceilings ensure a level of continuing support via the tax system for those who purchased medical insurance policies, while reducing Exchequer exposure to more expensive policies. The relief is provided at source, which ensures that individuals on lower incomes can receive the full benefit of the available relief.
Finally, as the Deputy may be aware, the Commission of Taxation and Welfare recommended that in the context of the implementation of Sláintecare relief for private health insurance should be phased out over time. Further details are set out in the Commission’s report: www.gov.ie/en/publication/7fbeb-report-of-the-commission/