Revenue Note for Guidance

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Revenue Note for Guidance

470 Relief for insurance against expenses of illness


This section provides relief at the standard rate of income tax for any year of assessment where an individual proves that in the year of assessment he/she incurred expenditure under a contract of insurance which provides specifically for the reimbursement or discharge of actual health expenses (as defined in section 469) or of non-routine dental expenses of the individual, the individual’s spouse or civil partner, or the children or other dependants of the individual or of the individual’s spouse or civil partner. Since 6 April 2001, the relief operates under a relief at source (TRS) system, that is, the subscriber can deduct the relief from the gross premium due. The amount deducted is refunded by the Revenue Commissioners to the authorised insurer.



(1)appropriate percentage” is a percentage equal to the standard rate of income tax for a year of assessment.

authorised insurer” is —

  • any undertaking entered in the Register of Health Benefits Undertakings which is lawfully carrying on health insurance in the State, and in particular cases, an undertaking authorised pursuant to the Third EU Directive on Non-Life Insurance where a policy of health insurance was taken out when the subscriber was not resident in the State but resident in another EU State; and
  • any undertaking authorised to carry on insurance business which provides dental insurance policies.

‘child’ means anyone under the age of 21, provided that the policy charged in respect of that person is at a reduced rate in accordance with section 7(5) of the Health Insurance Act 1994.

relevant contract” is a contract of insurance which provides specifically (whether in conjunction with other benefits or not) for the making good, in whole or in part, of actual health expenses (within the meaning of section 469) or of dental expenses other than routine dental expenses within the meaning of that section.

relievable amount” determines the amount of the insurance premium which will qualify for relief.

  • Where the premium covers only the making good of expenses covered in the definition of “relevant contract”, the whole of the premium qualifies. If some other benefit in addition to such re-imbursement were covered by the premium, an apportionment will be necessary.
  • Relief is not allowed in respect of payments in so far as they are referable to benefits other than the making good of the expenses referred to in the definition of “relevant contract”.

provided that, in respect of a relevant contract renewed or entered into on or after 16 October 2013, the relievable amount in respect of any payment made under a relevant contract, in respect of any 12 month period covered by that contract, shall not exceed the aggregate of the relievable amount attributable to each adult or each child on the policy up to a maximum of €1,000 per adult and €500 per child, and where the contract is for a period of less than 12 months, or terminated before the end of the [period, the relievable amount is reduced proportionately.

Where, for the years of assessment 2009-2012, a payment under a contract of insurance qualifies for age-related tax credit under section 470B, the relievable amount is reduced by the amount of the age-related tax credit due under that section.

For the years 2013 and following, where a risk equalisation payment is made in consequence of a claim made under a policy, the risk equalisation payment is disregarded for the purposes of determining the relievable amount.


(2) Relief is granted under the section to an individual for any year of assessment where he/she or, if the individual is married or in a civil partnership and jointly assessed under section 1017 or 1031A, the individual’s spouse or civil partner has made a payment to an authorised insurer under a relevant contract. Subject to the operation of the TRS system from 6 April 2001, the person making the payment is entitled in computing his/her income tax liability for that year of assessment to have that liability reduced (other than his/her tax liability in respect of tax withheld from annual payments under section 16(2)) by an amount equal to the relievable amount under the relevant contract multiplied by the standard rate of tax for the year, subject to such a reduction being limited to reducing that liability to nil.

The reference to section 16(2) in this subsection ensures that tax deducted from annual payments is retained in charge against the person deducting it and the tax deducted is not diluted by the relief provided by the section.

TRS system

(3)(a) With effect from 6 April 2001 where a person is entitled to relief under subsection (2) in respect of a premium paid on or after that date, the person obtains the relief by deducting income tax at the standard rate from the relievable amount.

(3)(b) The authorised insurer —

  1. regards the net amount of premium as discharging the person’s full liability in respect of the insurance cover, and
  2. may make a claim to recover from the Revenue Commissioners the equivalent of the amount retained by the subscriber.

Bar on double relief

(4) If relief is given under this section, no relief will be given or allowed in respect of the same payment under any other provision of the Income Tax Acts, with the exception of any age-related tax credit due under section 470B in respect of the payment.

Administration of relief

(5) The Revenue Commissioners shall make regulations in respect of the administration of this section particularly the operation of the TRS system. Every such regulation must be laid before Dáil Éireann.

(6) Where an amount of a refund is paid to an authorised insurer to which there is no entitlement, the amount is to be repaid by the insurer.

Relevant Date: Finance Act 2021