Rudolph is not the only one sporting a red nose at the moment, as Christmas shoppers throng the streets and splutter and sniffle their way through the festivities.

With a biting chill in the air, no amount of mulled wine can fend off a stubborn cold or other less seasonal illness. If you have to visit your doctor or local emergency room, you can expect to see your Christmas budget diminish rapidly, as being sick is an increasingly costly business.

Health inflation

According to the Central Statistics Office (CSO), the overall cost of healthcare and medicines rose by 5.9 per cent in the year to November, more than double the inflation rate. Consumer price index (CPI) figures from the CSO show the annual rate of inflation for the same period was 2.5 per cent. The CPI measures the overall change in living costs by collecting more than 50,000 prices every month and comparing them with prices from the previous month.

The health element of the CPI measures changes in the prices of medicines, doctors’ fees, dental services and other medical services, and accounts for just over 3 per cent of the total CPI basket of goods and services. Consumers have seen considerable increases in doctors’ fees over the last year, with prices rising by 10.6 per cent. A trip to your GP is likely to cost you up to €60 just for a consultation, while blood tests, smear tests or other such procedures will add to the charge.

Once you know what ails you, a trip to the pharmacy will leave your wallet lighter still. The cost of prescribed medicines also rose during the last 12 months, with prices up by 3.5 per cent.

The price of putting right other medical woes also jumped this year. Taking care of your dental health became more expensive, with dentists charging 3.5 per cent more than a year ago. The cost of outpatient services rose by 6.8 per cent, while other hospital services were 8.1 per cent dearer.

Tax relief

To ease the financial burden of your medical expenses, you can claim tax relief on the cost of looking after your health.

However, changes to the way this relief operates were announced in October’s budget, so many consumers will get less tax relief next year. Tax relief for medical expenses will be granted at the standard rate of 20 per cent from January 1; previously it was subject to relief at the marginal rate of 41 per cent for higher-rate taxpayers.

Only one exception applies, with nursing home fees subject to relief at the marginal rate for a further year. However from January 1, 2010, nursing home expenses will be treated like all other medical expenses and yield relief of 20 per cent.

The new rules apply only to medical expenses incurred from January 1 onwards, so any claims relating to 2008 or before will still be subject to the higher rate of relief, regardless of whether you make your claim before or after January 1.

Qualifying expenses

A wide range of medical expenses qualify for relief, including doctors’ and consultants’ fees, prescribed medication and physiotherapy that is prescribed by a doctor.

You can also claim relief for more infrequent treatments, such as laser eye surgery and orthodontics. However, you cannot claim for the cost of a basic visit to your optician or dentist, nor for the cost of contact lenses and glasses. A number of other, less obvious, items can be claimed. For example, the cost of gluten-free food for coeliacs is an allowable expense if you have a letter from your doctor to say you are a coeliac. Similarly, diabetic people can claim for special diabetic food products, once they have a doctor’s letter.

Relief is also available on the cost of buying or repairing certain medical appliances that are used on the advice of a medical practitioner. This includes items such as hearing aids, orthopaedic beds and wheelchairs. Full details of the medical expenses that qualify for this relief are available on the Revenue website (www.revenue.ie).

Making a claim

If you are having surgery or other qualifying treatment early next year, but pay your doctor, surgeon or dentist in advance, you will not be allowed to sneak in a claim at the higher rate.

’‘Tax relief on medical expenses will be given in the year the treatment is received, not in which the payment is made," said a spokeswoman for the Revenue Commissioners.

If you succumb to the urge to do a new year clearout of all your paperwork and find a pile of old doctors’ bills, don’t despair, as it is possible to make a backdated claim against medical expenses in previous tax years. Revenue’s spokeswoman said: ’‘A person can make a claim in respect of the previous four tax years, so until December 31, 2008, they can claim for tax years 2004, 2005, 2006 and 2007."

She said that, from January 1, taxpayers could claim in respect of 2005, 2006, 2007 or 2008. However, backdating your claims can be a little confusing, as the relief is claimed on a preceding year basis. ’‘This means that claims for 2004 will involve expenses incurred in 2003," said Revenue’s spokeswoman.

When making claims for previous years, you should remember that the rules about claiming tax relief on medical expenses have changed a little in recent years. Before the 2007 tax year, relief was granted on any health expenses above €125 for individuals and above €250 for families. The threshold was removed from January 2007, so you can now claim tax relief on all qualifying medical expenses. Refunds cannot be greater than the tax you paid in that year, and you cannot carry forward unused relief to a subsequent tax year.

Since 2007, it is also possible to claim in respect of medical expenses you incurred on any other person’s behalf. For 2006 and previous tax years, claims could only be made in respect of your own medical expenses or those of your dependants and relatives.

To make a claim for medical expenses, taxpayers can either complete a form online via Revenue’s internet service or, if you prefer to do things in a more traditional manner, you can fill in a Med 1 form. You will also need to fill in a Med 2 form if your claim includes dental expenses. While receipts need not be submitted with a health expenses claim, they should be retained for six years in case the claim is chosen for a more detailed examination.

Usually, health expenses refunds are processed early in the year following the relevant tax year, but it is not always necessary to wait until the end of the tax year to make a claim. For example, people who have hefty medical bills in March can choose to make their claim at that point.

The Revenue spokeswoman said: ’‘In cases of hardship, Revenue may grant relief during the year. However, the repayment would be allowed by means of a revised tax credit certificate and the refund would be through salary." Many people will make their claims for 2008 in the coming weeks, meaning a spike in Revenue’s workload.

However, the spokeswoman said there was a commitment to deal with health expenses claims promptly and issue refund cheques as soon as possible. ’‘Revenue have a customer service standard under which all online claims are dealt with within five days and paper claims are dealt with within 20 days," she said.