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Elderly Residential Care Expenses

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More than one person are eligible to claim deduction for elderly residential care expenses in respect of the same parent

1.

Q:

If more than one person are eligible to claim deduction for elderly residential care expenses in respect of the same parent for the same year of assessment, will all these persons be allowed the deduction?

A:

The eligible persons should first agree among themselves as to who shall claim the deduction, and only that person shall lodge the claim accordingly. If no agreement is reached, no deduction will be allowed.

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The fees charged by the residential care home are fully met by the Comprehensive Social Security Assistance Scheme Allowance (CSSA)

2.

Q:

The taxpayer's parent is residing at a residential care home. The fees charged by the residential care home are fully met by the Comprehensive Social Security Assistance Scheme Allowance (CSSA), but the taxpayer has made contribution of money towards other maintenance expenses of the parent during the year. Will the taxpayer be entitled to any tax deduction?

A:

No. The taxpayer is not entitled to deduction for elderly residential care expenses because he/she has not paid for such expenses. However, he/she may claim dependent parent allowance in respect of his/her parent provided all the relevant conditions are satisfied, including a contribution of money towards the maintenance of the parent of not less than $12,000 in the year of assessment.

Note: IRD may obtain information from Social Welfare Department to verify the information provided by the taxpayer in support of the claim for Dependent Parent/Grandparent Allowance and/or Elderly Residential Care Expenses.

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The parent reached the age of 60 during the year

3.

Q:

The taxpayer's parent was residing at a residential care home to which the taxpayer had paid for all the relevant expenses. The parent reached the age of 60 on 1 October 2016. Is the taxpayer entitled to deduction for elderly residential care expenses paid prior to 1 October 2016 for the year of assessment 2016/17?

A:

Yes. Since the parent reached the age of 60 in the year of assessment 2016/17, the taxpayer is entitled to deduction for elderly residential care expenses paid in that year of assessment (i.e. from 1 April 2016 to 31 March 2017) subject to the prescribed maximum amount of $92,000.