Reviewed by: MyTaxRebate Team on 10 Mar 2026 | Authority: s.469 TCA 1997
Quick Answer
Under the Fair Deal scheme, only your personal contribution to nursing home costs qualifies for income tax relief - not the HSE-funded element. Your personal Fair Deal contribution qualifies at your marginal rate: up to 40% for higher-rate taxpayers, 20% for standard-rate taxpayers. This is one of the highest-value tax reliefs available and is claimable for up to four prior years.
Because Fair Deal claims involve identifying the personal contribution from nursing home invoices and applying the marginal rate correctly, many families find it valuable to have MyTaxRebate handle the calculation and backdated submission - at no upfront cost.
What This Page Covers
- ✓How the Fair Deal scheme works and what the personal contribution consists of
- ✓Why only the personal contribution - not the HSE-funded portion - qualifies
- ✓The marginal rate relief (up to 40%) and how it is calculated
- ✓Who makes the claim: the resident, a family member, or multiple siblings
- ✓The deferred asset contribution and why it does not qualify
- ✓Documentation: nursing home invoices showing the personal/HSE split
Key Facts at a Glance
- ✓Only the personal Fair Deal contribution qualifies - not the HSE-funded portion of the nursing home cost.
- ✓Relief is at the marginal rate: up to 40% for higher-rate taxpayers, 20% for standard-rate.
- ✓An adult child who pays the personal contribution can claim at their own marginal rate.
- ✓The deferred family home asset contribution (repaid from estate) does not qualify.
- ✓Backdate up to four years - a missed multi-year claim can mean tens of thousands in recoverable relief.
How the Fair Deal scheme works
The Nursing Home Support Scheme - commonly known as Fair Deal - was introduced to fund long-term residential nursing home care for people who need it. Under the scheme, the individual (or their family) contributes a means-tested personal contribution toward the cost of care, and the HSE funds the remainder directly to the nursing home. The total nursing home fee is shared between the personal contribution and the HSE element.
The personal contribution is calculated on two elements:
The personal contribution is reviewed annually and can change as the resident's income and assets change. The nursing home invoices the personal contribution amount directly to the resident or their family each month or week.
- Income contribution: 80% of the resident's assessable income per year (income includes pension, rental income, and other assessable sources).
- Asset contribution: 7.5% of the value of assessable assets per year, with a three-year cap on the contribution from the principal private residence (meaning the family home contributes at 7.5% per year for a maximum of three years).
Why only the personal contribution qualifies for tax relief
Under Revenue's health expenses guidance at s.469 TCA 1997, the qualifying principle is that the individual can only claim relief on expenses they personally paid. The HSE element of the nursing home cost is paid by the HSE directly to the nursing home - it is not a personal payment by the resident or their family. Only the personal contribution - the amount the resident or their family directly pays to the nursing home - qualifies as a personal health expense.
This distinction is sometimes confused because the full nursing home fee appears on invoices, with the personal contribution and HSE contribution set out separately. The qualifying amount for tax relief is always the personal contribution column only - not the total fee.
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The deferred asset contribution and the family home
The Fair Deal asset contribution calculated on the family home is typically deferred rather than paid during the resident's lifetime. Under the Fair Deal rules, the family home asset contribution can be deferred for three years. During those three years, the HSE funds the home-based asset element of the personal contribution and recovers it from the estate after the resident's death.
Because this deferred home-based asset contribution is not paid by the resident or their family during the care period - it is a post-death estate recovery by the HSE - it does not generate a qualifying health expense in the year of care. Only amounts personally paid during the resident's lifetime qualify. The deferred contribution is settled from the estate and does not give rise to a health expense claim at any point.
Documentation and how to calculate the qualifying amount
To establish the qualifying amount each year, obtain the nursing home's monthly or weekly invoices and statements. These should clearly show:
Add up the personal contribution amounts across all months in the relevant tax year. This total is the qualifying health expense amount entered in your Revenue record under Health Expenses for that year. Retain the nursing home invoices and statements for six years from the date of the claim.
If the invoices do not separately identify the HSE and personal contribution elements - some nursing homes invoice only the personal contribution amount - that invoice amount is the qualifying expense. Where documents are unclear, a letter from the nursing home confirming the annual personal contribution paid for the specified resident in the specified year is acceptable documentation.
- The total weekly or monthly nursing home fee
- The HSE Nursing Home Support Scheme contribution
- The resident's personal contribution
How to claim and backdate Fair Deal contributions
After the end of the relevant tax year, the claimant logs in to your Revenue record at revenue.ie. Under your Revenue record → review the tax position position position, select the relevant year and enter the personal Fair Deal contribution paid in that year under Health Expenses. Revenue applies marginal rate relief to nursing home fees automatically where the health expenses claim includes a qualifying nursing home amount.
If contributions have been paid for several years without claiming, all four years within the backdating window can be claimed in a single session - selecting each year in turn and entering the qualifying personal contribution for that year. For families where this has been overlooked for multiple years, MyTaxRebate handles Fair Deal retrospective claims as part of our standard service, identifying all qualifying years and submitting the claims through Revenue's agent access system.
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Tax Scenarios
Adult child paying Fair Deal personal contribution as a higher-rate taxpayer
A parent's nursing home costs €1,400 per week. Under Fair Deal, the HSE contributes €1,100 and the personal contribution is €300 per week. An adult child (above the 40% income tax threshold) pays the €300 weekly contribution from their own salary account: €300 × 52 = €15,600 per year. At the 40% marginal rate: €6,240 refund per year. Over four backdated years: total qualifying €62,400 with a €24,960 refund. The nursing home invoices showing the personal/HSE split are obtained for each year and submitted through your Revenue record review the tax position position position.
Resident paying their own Fair Deal contribution from pension income
A nursing home resident has €22,000 in annual pension income. Their personal Fair Deal contribution is 80% of assessable income: €17,600 per year, paid directly to the nursing home from pension receipts. The resident's own tax affairs are managed by a family member. At the standard 20% rate (the resident is not a higher-rate taxpayer), €17,600 at 20% generates a €3,520 annual refund. Over four backdated years where this has not been claimed: €14,080 total refund recovered, credited to the resident's tax record and refunded to their bank account.
Two siblings sharing the Fair Deal contribution at different tax rates
Two siblings each pay €9,000 per year of their parent's €18,000 annual Fair Deal personal contribution. Sibling A is above the 40% threshold: €9,000 at 40% = €3,600 annual refund. Sibling B is a standard-rate taxpayer: €9,000 at 20% = €1,800 annual refund. Combined family annual refund: €5,400. If instead Sibling A paid the full €18,000, the annual refund would be €7,200 - €1,800 more per year. Payment records demonstrating which sibling made each bank transfer to the nursing home are essential to support each sibling's independent claim.
Common Mistakes To Avoid
- ✗Claiming the full nursing home fee rather than only the personal contribution column on the invoice - the HSE contribution under the Nursing Homes Support Scheme is not a personal expense of the resident or family and cannot be claimed by anyone. Only the personal contribution, calculated as approximately 80% of assessable income and 7.5% of assessable asset value annually, qualifies under s.467 TCA 1997.
- ✗Assuming the Fair Deal arrangement means there is nothing left for the family to claim - the personal contribution under Fair Deal is typically several hundred to several thousand euro per month and is frequently the largest single recurring qualifying health expense a household manages. At the marginal rate of 40%, each €1,000 of personal contribution generates €400 in tax relief.
- ✗Not backdating when a parent or relative has been in nursing care for several years - at the marginal rate, four years of unclaimed personal contributions can represent a very substantial accumulated refund. If a parent entered care under Fair Deal in 2022 and no claim has been made, all four years remain open and can be submitted together in a single your Revenue record session.
- ✗Not coordinating between siblings on which family member makes the personal contribution payments - each sibling who personally paid a portion of the nursing home personal contribution can claim their own contribution at their own marginal tax rate. Routing the largest share of contributions through the sibling paying the 40% income tax rate maximises the total family benefit substantially compared to splitting payments equally.
- ✗Not obtaining an itemised annual invoice from the nursing home separating the personal contribution amount from the HSE-funded portion - Revenue may require a breakdown confirming exactly what the family personally paid versus what was funded by the state in a compliance check. Many nursing homes do not itemise invoices automatically; request an annual itemised statement from the billing department each January for the prior year.
When This Does Not Apply
Key Takeaways
- ➤ ➤ Your personal Fair Deal contribution qualifies at the marginal rate - up to 40% for higher-rate taxpayers.
- ➤ ➤ Get nursing home invoices showing the personal/HSE split and total the personal contribution for each year.
- ➤ ➤ Backdate four years - this is one of the highest-value backdatable reliefs available to Irish taxpayers.
- ➤ ➤ MyTaxRebate extracts the personal contribution from your Fair Deal invoices, applies the correct marginal rate, and submits the full backdated claim across all four available years - at no upfront cost.
Check Your Claim
MyTaxRebate can review your position and guide the next step.
Frequently Asked Questions
Does the Fair Deal scheme affect nursing home tax relief?
Yes. Under the Nursing Home Support Scheme (Fair Deal), the HSE funds a significant portion of nursing home costs. You can only claim income tax relief on the amount you personally paid - your personal Fair Deal contribution. The HSE-funded element is not a personal expense and cannot be claimed.
What is the personal Fair Deal contribution?
Your personal contribution under Fair Deal is based on 80% of your assessable income and 7.5% of your assessable assets per year. The nursing home charges this personal contribution directly to you (or your family). It is your personal contribution - not the full nursing home fee - that qualifies for income tax health expense relief at your marginal rate.
At what rate does the Fair Deal personal contribution qualify for tax relief?
Nursing home fees qualify for income tax relief at the individual's marginal rate - up to 40% for higher-rate taxpayers, or 20% for standard-rate taxpayers. This is the marginal rate relief that applies to all qualifying nursing home fees, not just Fair Deal cases.
Can an adult child claim their parent's Fair Deal contribution?
Yes. If you personally paid the Fair Deal personal contribution on behalf of a parent - from your own income or account - you claim that amount at your own marginal rate. If you are a higher-rate taxpayer, you receive 40% relief on the contributions you made.
Does the deferred asset contribution from the family home qualify?
No. The deferred asset contribution - the portion of the Fair Deal funding calculated on the value of the family home and repaid from the estate after death - is not a personal payment made during the person's lifetime. It does not generate a qualifying health expense in the year of care.
How far back can I claim Fair Deal contributions?
Up to four years. In 2025, you can claim for personal Fair Deal contributions paid in 2022, 2023, 2024, and 2025. If a parent has been in a nursing home under Fair Deal for several years and you have not been claiming, a four-year backdated claim can represent a very significant total refund.
