Over 70's Medical card query

pkell343

According to the HSE guidelines on the over 70's Medical Card Self Employed income is assessed on the basis of Gross Income "including trade capital allowances". On their assessment they have EXCLUDED trade capital allowances in the calculation and not allowed them as a deduction against the gross.
This has meant that I am over the limit for a full medical card and have been granted the GP visit card. If the trade capital allowances were granted I would be under the limit. Can anyone tell me if the HSE is wrong in this instance?

conorh91

It's probably better to use the words deductible and non-deductible, because included and excluded give rise to misunderstanding in this context.

When you say trade capital deductions are included, this means trade capital deductions are officially deductible from gross income?

And they were not actually deducted from your gross income?

Then the best thing to do would be to ascertain that the capital deductions being sought are allowable as capital deductions, and speak to the HSE directly to that effect. It probably isn't a legal issue really.

pkell343

I have spoken to the hse on this and they are sticking to their view. I can see this eventually ending up as a legal issue so I was hoping someone may have come across this before.
In my opinion included means they have to be taken into account. If the guidelines said excluded then you should ignore them.
Anyway thanks for the reply.

conorh91

pkell343 wrote: »

I have spoken to the hse on this and they are sticking to their view.

Have they explained why?

Is there a disagreement over whether the capital allowance being sought is capable of falling within their definition of capital allowances, for example?

Cushie Butterfield

Have you appealed or just spoken to someone by phone?

According to the National Assessment Guidelines:


Assessable Income:
The assessable income of a self-employed person is determined as the average weeklyGross Income less Trade Capital Allowances. From this figure PRSI Contributions, Income Tax payable and the Income Levy are deducted

Documentation:
The documentation necessary to support the application and provide evidence of income is the Notice of Assessment and the Revenue Commissioners Form 11. Self-employed people are obliged to have Revenue Form 11 completed and submitted to Revenue before
the Inspector of Taxes will issue a Notice of Assessment

http://www.hse.ie/eng/services/list/1/schemes/mc/forms/assessmentguidelines.pdf

Did you use a Notice of Assessment or did you submit company accounts?

pkell343

The guidelines above relate to under 70's. I am over 70.
I have spoken to them on the phone and have now appealed. They are working off the notice of assessment which shows gross income in one panel and allowable capital allowances in the next. The guidelines clearly say you include trade capital allowances so I cannot understand why the hse would interpret differently.
I supppse I am looking for anyone who has come across this before for any advice on whether it worth my while proceeding.
Thanks for the feedback.

Cushie Butterfield

So it is, apologies I linked to the wrong document, but my error makes things a little clearer as it highlights the difference in assesment procedures for both age groups. This is the one for Over 70's: http://www.hse.ie/eng/services/list/1/schemes/mc/over70s/guidelinesover70s.pdf

3.2.2
Self Employed People - Assessable Income:
The assessable income of a self-employed person is determined as the average weekly Gross Income, including trade capital allowances. The documentation necessary to support the application and provide evidence of income is the Notice of Assessment and the Revenue Commissioners Form 11. Self-employed people are obliged to have Form 11 completed and submitted to Revenue before the Inspector of Taxes will issue a Notice of Assessment.

Looking at the differences between the wording of the two assessment procedures the difference is that under 70's are assesed on the average weekly Gross Income less Trade Capital Allowances & over 70's are assesed on the average weekly Gross Income, including trade capital allowances.



So, under 70's get trade capital allowances deducted from the gross but over 70's don't.

conorh91

Cushie Butterfield wrote: »

So, under 70's get trade capital allowances deducted from the gross but over 70's don't.

I don't think that's what they mean. A capital allowance is a deduction in this context. It would seem futile to declare something a capital allowance and then not deduct it.

When they say 'include', it seems like poorly chosen wording.

Logically it has to be a negative in effect, i.e where "+" = "include", then

Gross + (- allowance) = net

Pat Mustard

pkell343 wrote: »

According to the HSE guidelines on the over 70's Medical Card Self Employed income is assessed on the basis of Gross Income "including trade capital allowances". On their assessment they have EXCLUDED trade capital allowances in the calculation and not allowed them as a deduction against the gross.
This has meant that I am over the limit for a full medical card and have been granted the GP visit card. If the trade capital allowances were granted I would be under the limit. Can anyone tell me if the HSE is wrong in this instance?

Capital allowances serve to reduce taxable income. In other words, capital allowances are deducted/excluded for the purposes of arriving at taxable income.

Looking at HSE guidelines for the over 70s medical card:

The assessable income of a self-employed person is determined as the average weekly Gross Income including trade capital allowances.

It seems to me that the HSE means to specifically add back capital allowances in the income calculation here.

pkell343

The reason I posted this on a legal discussion was to see if anyone knows what the legal position is or where it can be found. The guidelines are hse guidelines which is only their interpretation of some legal instrument.
If anyone has any information on this I would be grateful.