Reduction
in tax relief

The government reduced the amount of tax relief on private health insurance premiums in Budget 2014. It affected policies over €1,000. That's most policies and it means 90% of people with cover now have to pay more for their health insurance.
Reduction in tax relief for private health insurance
    In Budget 2014, the maximum amount of tax relief on health insurance policies over €1,000 was cut from €300 to €200 for adults. For children, it was cut from €200 to €100.

    Here's what that means for an insurance policy of €1,500:

  • The tax relief applies to 20% of the premium.
  • 20% of €1,500 is €300.
  • Before the reduction in the maximum tax relief, you could claim back the entire €300 from the taxman.
  • Now the maximum tax relief has been reduced to €200, you can only claim back €200 out of that €300. You're €100 worse off.

  • Put another way: your annual premium just went up by €100.

    Couples both get hit, and children don't escape either.
Maximum tax relief caps
Adults €200 Tax Relief
Children €100 Tax Relief
90%
of people with private health insurance impacted
83%
of people stated that the reduction of tax relief in the last budget was unfair Behaviour and Attitudes study conducted amongst 1000 adults aged 16+ between 19th August – 4th September 2014.

This change impacted 90% of people with private health insurance. (Source: Insurance Ireland 2013).

The reduction in tax relief at source is one of a number of reasons for the increase in the cost of private health insurance. In a recent study, 83% of people stated that the reduction of tax relief in the last Budget was unfair. (Source: 2014 Behaviour & Attitudes).

Reducing tax relief is counter-productive, as it contributes to people having to drop their health insurance on the basis of cost and affordability, which means that they have to rely on an already overstretched public health system.

Any further reductions to tax relief, now or in the future, will only serve to make health insurance premiums more expensive and ultimately, drive more people out of the market.

Tax Relief Reduction Lorraine Carr
Team member, Laya Healthcare