Thousands missing out on health insurance tax relief

26th October 2015

Thousands of employees across Ireland are said to be missing out on tax relief on their health insurance paid for by their employers, according to

An estimated 400,000 professionals across Ireland have health insurance that is either fully or partially paid for by their employer, but many don’t actually realise they have to claim the tax relief themselves.

Dermot Goode, of, said the majority of these people are not aware that they are due a tax benefit.
“The people who run 90 per cent of the schemes that I talk to are not aware of this,” said Goode.

“In company group schemes where the employer pays the premium for employees as a company perk, the TRS (tax relief at source) system doesn’t apply.”

Employees are charged benefit-in-kind, pay-related social insurance and universal social insurance on the gross value of the cover paid for them; but they won’t get their tax relief at source.

“Most mistakenly believe that this tax relief still applies, or that their employer claims this relief for them, which is not the case in the majority of companies,” added Goode.

Those entitled to health insurance tax relief must include this claim in their annual tax return to the Revenue Commissioners; notifying the Revenue of the gross premium paid on their behalf by their employer on which they have been charged benefit-in-kind.

Revenue will then make necessary arrangements to pass on their tax relief entitlement to them.

In much the same way to claiming tax relief on medical expenses, taxpayers can go back four years if they are in receipt of this company benefit for some time and haven’t claimed previously.

For instance, an employee whose employer has fully covered their family healthcare for the last four years, at an average cost of €3,000 a year, will have accumulated €12,000 worth of benefits-in-kind.

“If they haven’t claimed tax relief, they could be entitled to a refund in the region of €2,400, assuming they are on the top tax rate,” added Goode.

An estimated 50 per cent of Irish professionals with private health insurance are in group schemes.

Almost two-fifths of professionals in such schemes, or 400,000 people, receive a subsidy from their employer towards the cost.

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