Revenue Note for Guidance
This section provides relief for premiums paid to a bona fide permanent health benefit scheme. The relief is confined to an amount not exceeding 10 per cent of the individual’s total income for any tax year. Where the premium is paid by an individual’s employer and is taxed on the individual as a perquisite, the premium is treated as having been paid by the employee and qualifies for relief. The relief is given as a deduction from total income.
(1) “benefit” is a payment to a person under a permanent health benefit scheme in the event of loss or diminution of income due to ill health.
“permanent health benefit scheme” is any scheme, policy, contract or other arrangement approved by the Revenue Commissioners which provides for periodic payments to an individual in the event of loss or diminution of income due to ill health.
“contribution” is any premium paid or other periodic payment made to a scheme in consideration of the right to obtain benefits under the scheme. The contribution to the scheme must bear a reasonable relationship to the benefits secured by it.
(2) Where an individual for a year of assessment proves that he/she pays a premium or other contribution in that year to a bona fide permanent health benefit scheme, he/she is entitled to a deduction from total income in respect of so much of the premium or other contribution as does not exceed 10 per cent of his/her total income.
(3) Where a contribution is paid by an individual’s employer and the amount paid is treated as a perquisite of the office or employment taxable on the individual under Schedule E, the contribution is treated as having been paid by the employee and the amount of the contribution, subject to the 10 per cent limit, qualifies for relief.
Relevant Date: Finance Act 2021