Bounce back with a Med 1 tax rebate: ThePost.ie


TCH Archives > Sunday Business Post > 2005/01/09 > Bounce back with a Med 1 tax rebate

Bounce back with a Med 1 tax rebate
Sunday, January 09, 2005 - By Aileen Power
Christmas and January sales excesses come back to haunt us at this time of year. So thank goodness for Med 1, which can put a bounce back into your bank account – just when it's most needed.

Med 1 is the form used to claim back income tax paid on qualifying medical expenses. Repayment is made at the taxpayer's marginal rate, up to 42 per cent, making it a valuable tax break.

For example, a family of two adults and two children could easily claim back up to €735 via the Med 1 in just one year.

Single people could expect to claim up to half this amount, depending on their medical bills.

It is not unusual for a family of four to spend €2,000 a year on qualifying medical expenses. Mothers may take sick babies and young children to the doctor several times a month for vaccinations, check-ups, antibiotics and so on. If specialists are required, that can quickly push up the bill, particularly when the husband's and wife's medical expenses are included.

Families are entitled to claim back all amounts above €250 (singles €125) spent on qualifying medical expenses.

Thousands of people are missing out on this valuable tax break, which can be claimed retrospectively for up to four years. Tax specialists say it is one of the best money savers, but least-claimed tax breaks available.

What expenses can be claimed under the Med 1?

Qualifying expenses include:

Doctors' bills

Prescription medicines, such as the contraceptive pill, anti-depressants, antibiotics and vaccinations

Physiotherapists, acupuncturists and psychiatrists consulted on medical advice

Corrective laser surgery for short-sightedness

In-vitro fertilisation treatment

Certain travelling expenses, for example when attending a specialist with a sick child

Food and drinks required by coeliacs or those on specialised diets on the advice of a doctor

Routine health care in pregnancy

Speech and language therapy for a dependent child

Educational psychological assessment for a dependent child

Nursing home care

For example, if your spouse, mother or father or a dependent suffered a stroke and was admitted to a qualifying nursing home to which you were contributing, say, €1,000 a month, you can use the Med 1 form to reclaim €420 a month, or €5,040 a year. The dependent's income (if any) is taken into account when claiming relief.

Check on Revenue's website www.revenue.ie under Med 1 for further details.

Expenses that do not qualify

Sight testing and advice about the use, supply or repair of spectacles.

Routine dental treatment, including fillings, extractions, cleaning/polishing, dentures, repair of artificial teeth and so on. Tips Don't forget to enclose your P60 with your Med 1, otherwise Revenue will return your application form and delay your payment.

Many taxpayers think that, once a medical expense has been predominantly reimbursed by a health insurer or health board, no further allowance can be claimed in excess of their annual Revenue allowance of €125 per person or €250 per family. This is not the case.

Medical insurance experts say a tiny percentage of VHI and Bupa customers claim for out-patient medical costs each year.

Example

Timothy is hospitalised and is covered by plan A with the VHI, which entitles him to a semi-private room in a public hospital, but does not cover him for a private room in the Blackrock Clinic where he chooses to stay.

In this case, the total cost of his treatment and stay is €3,000.The VHI might agree to pay €2,400 of the total cost.

Timothy can claim for any amount above €125 not covered by another source.

He can therefore claim for €3,000 minus €2,400 minus €125 - €475 at his marginal rate of tax 42 per cent, which saves him €199.50.

You can submit your claim any time during 2005. Also you can claim qualifying medical expenses on your Med 1 and Med 2 up to four years after you incurred the expense, provided you have supporting receipts.

You do not need to send in the receipts but must keep them available in case Revenue wishes to check them.

You should reclaim any outstanding medical costs from the VHI or Bupa before you seek a rebate from the Revenue, as you might be able to reclaim the full amount, as opposed to just 42 per cent of the bill.

Deduct any payments made towards your medical costs, for example Bupa, VHI or Vivas refunds. If you are claiming for children who have an income in their own right, this should be stated on the Med 1 form.

The Med 1 form can be tricky to find online.

Click on www.revenue.ie, scroll down the left hand side and click on ‘forms'. Scroll down and, under ‘forms for individuals', you will see ‘claim forms'.

Click on this and the Med 1 and Med 2 forms appear. Print them off, complete them and send them to your local tax office. Expect a rebate cheque within six to eight weeks.

The Med 2 form, which deals with non-routine dental care, must be completed by a dental practitioner.

Types of dental treatment for which tax relief is allowable are:

Crowns, veneers and tip-replacing (all part of the crown family)

Surgical extraction of wisdom teeth

Periodontal and orthodontic treatment

Bridgework and root canal treatment

You can also claim tax relief for the cost of nursing home care, which must be approved by your local health board and must be on the advice of an approved practitioner.

If in doubt, ring an accountant or tax consultant who may be able to unearth valuable, unclaimed reliefs for you.

You can also call the Revenue Commissioners information office on 01-878 0000, or call your local tax office.