Your money - 8 February 2012
Q. I saw something in the paper recently relating to refunds of health contributions. I think I may be entitled to something but I am not sure what the conditions are. Can you please advise?
A. I have set out below the position in relation to refunds of health contributions. If you feel you are entitled to a refund you should apply immediately.
a) If you earned more than €26,000 in 2008, 2009 and 2010 you were liable to pay the Health Contribution and you are not due a refund.
b) If you earned less than €26,000 and never earned more than €500 in any one week you would not have been charged the Health Contribution and are not eligible for a refund.
c) You may be entitled to a refund of the Health Contribution if you have earned less than €26,000 in 2008, 2009 or 2010 and earned more than €500 in any particular week in those years.
d) Your P60 Form will give you details of your earnings.
e) You must make an application for a refund within four years of 31 December of the year you paid the contribution. For example you must apply for a refund of the Health Contributions paid in 2008 by 31 December 2012 and so on.
f) Any contributions paid prior to 1 January 2008 are outside the time limit for making a claim.
g) The Health Contribution was included in the Universal Social Charge (USC) with effect from 1 January 2011 and no Health Contribution refunds arise after that date.
h) The amount of refund you receive will vary depending on the amount of Health Contribution paid.
i) If you satisfy the earnings conditions outlined above you should write to the address below and include your name, address, Personal Public Service Number and your date of birth.
Department of Social Protection
PRSI Refunds Section
Q. I am looking at my mortgage interest and the tax relief to which I am entitled. I am totally confused at this stage as to the amount to which I am entitled and the relevant ceilings for each year. Could you please clarify what the position is in the current tax year?
A. I have set out below the current ceilings and rates of tax relief available on mortgages as applicable following the introduction of changes announced in the Budget last December where the rate relief was increased to 30% for those who purchased their first principal private residence on or after 1 January 2004 and before 31 December 2008.
The ceilings or upper thresholds on the amount of interest paid that qualifies for tax relief are dependent on:
• The status of the individual – that is, whether he or she is married, in civil partnership or single; and
• Whether he or she is a first time buyer.
The ceilings are:
|Married/Civil partnership/widowed/surviving civil partner||Unmarried/not in civil partnership|
|First Time Buyers (First 7 tax years of entitlement to tax relief on interest paid)||€20,000||€10,000|
|Non First Time Buyers||€6,000||€3,000|
The rates of tax relief on qualifying house loan (mortgage) interest paid are:
Rates of Tax Relief on Qualifying Interest - 2012
|Tax Years 1 & 2||Tax Years 3, 4 & 5||Tax Years 6 & 7 (*)|
|First Time Buyers (First 7 tax years of entitlement to tax relief on interest paid)||Rate of tax relief = 25%||Rate of tax relief = 22.5%||Rate of tax relief = 20%|
|Non First Time Buyers||Rate of Tax relief = 15%|
*Note: After year 7, the rates are those that apply to non-first time buyers.
Exception: Notwithstanding the rates of tax relief mentioned above, for individuals who purchased their first principal private residence on or after 1 January 2004 and on or before 31 December 2008, the rate of tax relief on the interest paid on the loan to purchase that property will, for the tax years 2012 to 2017, be 30% (subject to the relevant ceilings).
• Mortgage Interest relief is increased to 30% for first time buyers 2004-2008
• Purchase home in 2012 – percentage relief
-25% for first-time buyer
-15% for non-first time buyer
• No relief to house purchasers after 31 December 2012
• Abolished by 2018.
If you have any queries on money or taxation matters which you would like answered, please send them to "Your Money", c/o Examiner Publications (Cork) Ltd., City Quarters, Lapps Quay, Cork