What is the difference between requiring care and being helpless?
Tax law distinguishes between "in need of care" and "helpless":
a) In need of care
Persons are considered in need of care if they "require significant or greater assistance for ordinary and regularly recurring activities in daily life due to a physical, mental, or emotional illness or disability, on a long-term basis, expected to last at least six months" (§ 14 SGB XI).
The following persons are considered in need of care:
- Persons classified in one of the three care levels (until 2016) or one of the five care grades (from 2017) according to the Care Insurance Act §§ 14, 15 SGB XI.
- Persons with a significant impairment of everyday competence, so-called dementia patients (according to § 45a SGB XI).
- Persons with a severely disabled pass with the mark "H" or "Bl".
- Other persons receiving outpatient care with care costs invoiced separately by a recognised care service.
- Persons in a retirement or nursing home for whom care services of care rate level 0 are invoiced separately (BFH ruling of 10.5.2007, BStBl. 2007 II p. 764).
Proof is provided by the notice from the social care insurance fund or a private insurance company, the notice from the pension office or comparable authority with the relevant determinations, or the severely disabled pass with the mark "H" or "Bl".
The reasons for the need for care are irrelevant. It does not matter whether it is due to an accident, illness, disability, or simply age-related.
b) Helplessness
Helpless are "persons who permanently require external help for a number of frequently and regularly recurring activities to secure their personal existence in the course of each day" (§ 33b para. 6 EStG).
Helpless persons possess a severely disabled pass with the mark "H" (helpless) or "Bl" (blind). The mark "H" was equivalent to care level III until 2016. Proof is provided by the severely disabled pass with the marks "H" or "Bl" and the notice from the pension office with the relevant determination or the notice from the social care insurance fund or insurance company (§ 65 para. 2 EStDV).
Since 2017, the classification of care needs has been much more differentiated into five care grades instead of the previous three care levels. The focus is on the actual support needs, measured by the degree of independence, regardless of whether someone has a mental or physical impairment. Physical, mental, and psychological impairments are recorded and included in the assessment of care needs (§ 14 SGB XI).
All persons in need of care who have previously received care insurance benefits will be transferred to the new system from 1.1.2017 without a new assessment. They do not need to apply for classification in a new care grade.
Since 2017, the classification in care grades 4 and 5 is equivalent to the mark "H". Persons in need of care with care grade 4 or 5 are therefore entitled to the increased disability allowance of 7.400 Euro (BMF letter of 19.8.2016, IV C 8-S 2286/07/10004).
Note: The new care grade 4 applies to the previous care level III and care level II with significantly impaired everyday competence. The new care grade 5 applies to the previous care level III with significantly impaired everyday competence and the hardship cases of care level III.
Conclusion: Persons in care level III (until 2016) or from 2017 with care grade 4 or 5 are both "in need of care" and "helpless". Persons in care levels I and II or with care grades 1 to 3 are only "in need of care", not "helpless".
- Expenses due to care needs in care level I, II or 0 are deductible as general extraordinary expenses according to § 33 EStG, insofar as they exceed the care allowance received from statutory or private care insurance. The expenses must be proven and will be reduced by the reasonable burden by the tax office. In this case, the carer cannot receive the care allowance according to § 33b para. 6 EStG.
- Expenses due to helplessness or care needs in care level III are also deductible as general extraordinary expenses according to § 33 EStG, insofar as they exceed the care allowance received. Instead, the increased disability allowance of 7.400 Euro can be claimed. The carer can receive the care allowance according to § 33b para. 6 EStG if they do not receive any income for the care.
