The Minister for Finance in his budget speech announced a major change in the way in which a tax deduction for medical expenses will be calculated from 01 January 2009 onwards. A deduction for medical expanses incurred in a tax year were usually relieved at the marginal rate of tax, (i.e. 41 per cent for high earners). The tax relief will now be given at the standard rate of tax from 01 January 2010.

This is likely to impact largely on those families who have permanently incapacitated loved ones. Revenue issued a tax breifing in April 2008 stating that it will be their practice in cases of hardship to allow tax relief during the tax year subject to an end of year tax claim for medical expenses being submitted in the normal way.