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Allowances &
e ntit l e m e nts
Tax credits Covenants
Age Tax Credit is additional to the personal tax credit If you are a higher rate taxpayer and you want to
and may be claimed once you or your spouse or civil help support a person on a low income, it may be
partner reaches the age of 65. worthwhile to covenant the money.
Age Tax Credit 2014 The person to whom you covenant must be 65 or over
Single or widowed or €245 or be permanently incapacitated. If the conditions are
surviving civil partner met, you can claim tax relief on an amount up to 5% of
Married or in a civil €490 your taxable income; however, there is no limit if the
partnership person is permanently incapacitated.
If you or your spouse or civil partner are 65 or over Covenants are most effective if the recipient does not
contact Revenue to claim this additional tax credit. have a taxable income. The amount you covenant may
be taxable in the hands of the recipient. It is important
Dependent Relative Tax Credit to note that money covenanted to people receiving a
non-contributory pension or means-tested allowance
This credit is granted to if you pay tax and maintain, at may affect their entitlement to the allowance in
your own expense, any person who comes within any question.
of the following categories:
Tax relief for rent
• A relative, including a relative of your spouse or
civil partner, who is unable to maintain himself or Tax relief is available for rent paid for private rented
herself as a result of old age or ill-health accommodation. This will be phased out over 7 years,
• A widowed parent / surviving civil partner parent starting from 2011. People over 55 can claim relief at
of either yourself or your spouse or civil partner, higher rates. You cannot claim relief if you were not
irrespective of the state of his/her health renting before 7 December 2010.
• A son or daughter of either yourself or your
spouse or civil partner who lives with you and on Deposit Interest Retention Tax
whose services you must depend as a result of old
age or ill health Deposit Interest Retention Tax (DIRT) is deducted from
the interest payable on savings in banks, building
The relative’s own income must be below a certain societies, etc. This happens whether or not you would
amount to claim this tax credit. This tax credit is €70 normally be liable for tax. If you are aged 65 or over or
for 2013. your spouse or civil partner is aged 65 or over or if you
are permanently incapacitated, you may not be liable
Allowance for employing a carer for DIRT if you are exempt from income tax.
If you employ a person to take care of an incapacitated You can notify your financial institution so that they
member of your family, you may get an additional can pay your interest without deducting DIRT.
allowance. The maximum allowance is €50,000. Relief
for employing a carer is allowable at your highest rate
of tax. For more information contact Revenue.
Active Retirement Ireland 199
e ntit l e m e nts
Tax credits Covenants
Age Tax Credit is additional to the personal tax credit If you are a higher rate taxpayer and you want to
and may be claimed once you or your spouse or civil help support a person on a low income, it may be
partner reaches the age of 65. worthwhile to covenant the money.
Age Tax Credit 2014 The person to whom you covenant must be 65 or over
Single or widowed or €245 or be permanently incapacitated. If the conditions are
surviving civil partner met, you can claim tax relief on an amount up to 5% of
Married or in a civil €490 your taxable income; however, there is no limit if the
partnership person is permanently incapacitated.
If you or your spouse or civil partner are 65 or over Covenants are most effective if the recipient does not
contact Revenue to claim this additional tax credit. have a taxable income. The amount you covenant may
be taxable in the hands of the recipient. It is important
Dependent Relative Tax Credit to note that money covenanted to people receiving a
non-contributory pension or means-tested allowance
This credit is granted to if you pay tax and maintain, at may affect their entitlement to the allowance in
your own expense, any person who comes within any question.
of the following categories:
Tax relief for rent
• A relative, including a relative of your spouse or
civil partner, who is unable to maintain himself or Tax relief is available for rent paid for private rented
herself as a result of old age or ill-health accommodation. This will be phased out over 7 years,
• A widowed parent / surviving civil partner parent starting from 2011. People over 55 can claim relief at
of either yourself or your spouse or civil partner, higher rates. You cannot claim relief if you were not
irrespective of the state of his/her health renting before 7 December 2010.
• A son or daughter of either yourself or your
spouse or civil partner who lives with you and on Deposit Interest Retention Tax
whose services you must depend as a result of old
age or ill health Deposit Interest Retention Tax (DIRT) is deducted from
the interest payable on savings in banks, building
The relative’s own income must be below a certain societies, etc. This happens whether or not you would
amount to claim this tax credit. This tax credit is €70 normally be liable for tax. If you are aged 65 or over or
for 2013. your spouse or civil partner is aged 65 or over or if you
are permanently incapacitated, you may not be liable
Allowance for employing a carer for DIRT if you are exempt from income tax.
If you employ a person to take care of an incapacitated You can notify your financial institution so that they
member of your family, you may get an additional can pay your interest without deducting DIRT.
allowance. The maximum allowance is €50,000. Relief
for employing a carer is allowable at your highest rate
of tax. For more information contact Revenue.
Active Retirement Ireland 199
