For travel expenses incurred due to a disability, a travel allowance for disability-related travel is granted to the taxpayer upon application from 2021. The allowance is available to:
Beyond these travel allowances, no further disability-related travel costs can be considered as extraordinary expenses.
The tax office applies a reasonable burden to these allowances (§ 33 para. 2a EStG).
I N F O
Which new care levels correspond to the condition of being helpless?
Disabled individuals are entitled to a disability allowance, which varies according to the degree of disability. In cases of helplessness (mark "H") and blindness (mark "Bl"), the disability allowance is 7,400 Euro regardless of the degree of disability (§ 33b EStG).
Until 2016, the classification as a person in need of severe care in care level III according to the notice from the care insurance fund was equivalent to the mark "H" (§ 65 Abs. 2 EStDV).
Carers who look after a person in need of care at home are entitled to the carer's allowance. The allowance is:
- for care level 2: 600 Euro
- for care level 3: 1.100 Euro
- for care level 4 or 5 or helplessness: 1.800 Euro
Since 2017, the assessment of care needs has been much more differentiated into five care levels 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.
All individuals previously receiving care insurance benefits have been transferred to the new system without a new assessment since 1 January 2017. They do not need to apply for classification into a new care level. Previously, for tax purposes, care level III was equivalent to the mark "H" (in need of help) on the severely disabled pass.
Since 2017, the mark "H" is equivalent to care levels 4 and 5. If the person in need of care has care level 4 or 5,
- the person in need of care receives the increased disability allowance of 7,400 Euro and
- the carer receives the carer's allowance for home care (BMF letter dated 19.8.2016).
The new care level 4 applies to the previous care level III and the previous care level II with significantly reduced everyday competence. The new care level 5 applies to the previous care level III with significantly reduced everyday competence and the severe cases of care level III.
(2023): Which new care levels correspond to the condition of being helpless?
How is a disability verified?
Proof of disability is provided by the pensions office. From a disability degree of 50 percent, you will receive a severely disabled pass; up to a degree of 45, the office issues a notice of assessment. The tax office is bound by these notices.
If you receive a pension or other benefits due to your disability, the pension statement or similar documents are usually sufficient as proof.
For the granting of the increased allowance for helpless or blind persons, the note "H" or "Bl" must be entered in the severely disabled pass. For helpless persons, the care fund's notice of classification as a care recipient of care level III (until 2016) or the granting of care level 4 or 5 (from 2017) is also sufficient.
(2023): How is a disability verified?
When is a person considered helpless?
Persons requiring assistance receive an increased disability allowance of 7,400 Euro. According to the Income Tax Act, a person is considered helpless "if they require permanent assistance from others for a number of frequently and regularly recurring activities to secure their personal existence in the course of each day" (33b para. 6 sentence 3 EStG). This assistance can include help with dressing and undressing, eating, and personal hygiene.
The allowance is not available for temporary helplessness, but only if the condition lasts for more than six months.
Proof of helplessness
Proof of helplessness is provided with the severely disabled person's pass, in which the mark "H" is entered. The notice from the pension office, which shows the relevant exemptions, can also serve as proof. The mark 'H' corresponds to care level 4 or 5 (from 2017).
Tip: The increased disability allowance is independent of the degree of disability and can therefore also be granted for a degree of disability of less than 50.
In 2017, the mark "TBl" (deafblind) was newly introduced in social law to clarify equality with the mark "Bl". The extension is declaratory because people with the mark "Bl" and/or the mark "TBl" always also receive the mark "H".
(2023): When is a person considered helpless?
When is a person considered blind?
Blind individuals receive the increased disability allowance of 7,400 Euro per year. Blindness is defined as having no more than two percent vision in the better eye.
Deaf individuals do not receive the increased disability allowance.
The proof of helplessness is provided with the disability card showing the mark "Bl". Alternatively, the notice from the pension office with the relevant details can serve as proof.
Note
In 2017, the mark "TBl" (deafblind) was introduced in social law to clarify equal status with the mark "Bl". This extension is declaratory, as individuals with the mark "Bl" and/or "TBl" always receive the mark "H".
(2023): When is a person considered blind?
What happens if the degree of disability changes?
The disability allowance is always valid for a whole year. If the degree of disability (GdB) changes during the year, you will always be granted the allowance according to the highest degree determined by the medical assessor in the calendar year.
Example
Max has a GdB of 50. During the year, his health deteriorates. A medical assessor then increases his GdB to 65. Therefore, Max can expect the higher allowance of 1,780 Euro for this year.
(2023): What happens if the degree of disability changes?
Which expenses are covered by the disability allowance?
Many expenses typically incurred by disabled people are covered by the disability allowance. These include costs incurred to manage ordinary and regularly recurring activities in daily life. They also include care expenses, regardless of whether the care is provided at home or in a care home, or what level of care is required.
Tipp
If the total of your expenses is higher than the allowance, you should forgo the allowance and instead deduct your costs as extraordinary expenses. However, you must note that extraordinary expenses are only recognised if they exceed the reasonable burden.
Also covered are the costs for medication, remedies and assistance, as well as personal contributions for the use of public transport. Expenses for home dialysis are also included.
(2023): Which expenses are covered by the disability allowance?
How are the costs for structural modifications due to a disability taken into account?
When a family member is affected by a disability, significant renovations to the home are often necessary to allow the disabled person to continue living in their familiar surroundings despite health restrictions and to avoid moving to a care home.
Such expenses for disability-related renovations can be deductible as extraordinary burdens if certain conditions are met.
Costs for shower renovation
Currently, the Baden-Württemberg tax court has recognised the costs for renovating the shower in full as extraordinary burdens according to § 33 EStG, although a reasonable burden must be deducted. The costs for materials and labour are considered medical expenses as they serve directly to alleviate an illness (Baden-Württemberg tax court, 19.3.2014, 1 K 3301/12).
Der Fall
A single lady suffers from multiple sclerosis and has a disability degree of 50. A care level has (not yet) been certified. In her own home, she has the shower renovated to be disability-friendly: The shower tray is removed and a floor-level shower element is installed, the fittings are renewed, the shower cubicle is retiled and fitted with a door. The shower is then accessible at floor level and can be used with a wheelchair.
The tax court did not credit any value for the new shower. According to new BFH case law, in the case of disability-related renovations, the expenses are so strongly justified by the compulsion of the disability that "the acquisition of any value in view of the overall circumstances takes a back seat" (BFH judgment of 24.2.2011, BStBl. 2011 II p. 1012).
Furthermore, a marketable advantage is also disregarded: "A value that is based solely on the possible use of the renovations by non-disabled family members is not a real value and is therefore unsuitable to justify a prohibition on deduction" (BFH judgment of 22.10.2009, BStBl. 2010 II p. 280).
Costs for installing a lift
Expenses for installing a lift in one's own house were previously not recognised as extraordinary burdens. An elevator tower added to the existing building was also not recognised. This was justified by the fact that such a construction measure is also advantageous for non-disabled people and therefore increases the value of the building.
However, according to more recent BFH case law, the question of value and marketable advantage no longer plays a significant role (BFH judgment of 22.10.2009, BStBl. 2010 II p. 280; BFH judgment of 24.2.2011, BStBl. 2011 II p. 1012).
The Cologne tax court recognised the costs for installing a lift amounting to 65.000 Euro as extraordinary burdens because the installation of a cheaper stairlift was not possible for technical reasons (Cologne tax court, 27.8.2014, 14 K 2517/12, revision).
Currently, the Federal Fiscal Court has ruled that expenses for creating a wheelchair-accessible path in the garden of a detached house are not necessary if there is a terrace on the other side of the house that is accessible by wheelchair. Therefore, the expenses are not deductible as extraordinary burdens. However, the labour costs can be deducted as a craftsman service at 20 percent (maximum 1.200 Euro) from the tax liability (judgment of 26.10.2022, VI R 25/20, BStBl 2023 II p. 372).
Expenses for medically indicated measures are typically to be considered as extraordinary burdens without the need for an individual examination of the necessity of the reason and the amount. It should also be noted that not only the medically necessary minimum provision is indicated, but any diagnostic or therapeutic procedure that is sufficiently justified.
This medical assessment must be followed in the tax evaluation unless there is an obvious disproportion between the required and the actual expenditure. Even with costs of 65.000 Euro for a lift, there is no obvious disproportion between the required and the actual expenditure. These costs are reasonable.
This is especially true if the installation of a cheaper stairlift was not possible for technical reasons.
The Federal Fiscal Court had already clarified that the lift is a "medical aid in the strict sense" that is purchased exclusively by sick or disabled people to alleviate their suffering. For such items, a medical certificate does not need to be obtained before purchase, as the strict requirements of § 64 para. 1 no. 2e EStDV do not apply (BFH judgment of 6.2.2014, VI R 61/12).
Tipp
The full deduction in the year of expenditure can, however, be ineffective if the extraordinary burdens are higher than the total income from which they are to be deducted. In this case, the tax deductibility does not provide the desired relief effect. It would be more advantageous if high expenses could be spread over several years. However, the tax authorities refuse and state: "A distribution over several years is not permitted" (R 33.4 para. 4 and 5 EStR).
The Federal Fiscal Court has confirmed the strict stance of the tax authorities: Extraordinary burdens are generally deductible in the year in which they were incurred. High costs for disability-friendly home renovations may not be spread over several years for reasons of equity if they can only have a very limited tax effect in the calendar year in which they were incurred (BFH judgment of 12.7.2017, VI R 36/15).
(2023): How are the costs for structural modifications due to a disability taken into account?
Can high renovation costs be spread over five years?
Disabled individuals often face very high expenses that healthy individuals do not have. This is particularly true for adapting the living environment for disability needs, such as barrier-free modifications in the home, installation of a stair lift, addition of a lift, construction of a wheelchair ramp, vehicle conversion, etc.
As these are unavoidable expenses, they can be deducted as general extraordinary expenses under § 33 EStG, subject to a reasonable burden. Due to the tax cash principle, the expenses must be fully declared in the year of payment in the tax return.
However, the full deduction in the year of expenditure may be ineffective if the extraordinary expenses exceed the total income from which they are to be deducted. This means the tax deductibility does not provide the desired relief effect. In this case, the Federal Fiscal Court suggested a leniency regulation (§ 163 AO): Affected individuals should have the option to spread the high expenses over several years (BFH ruling of 22.10.2009, VI R 7/09).
However, the tax authorities are resistant and still state in the 2015 income tax guidelines:
"A distribution over several years is not permitted" (R 33.4 paras. 4 and 5 EStR). Unfortunately, the Federal Fiscal Court confirmed the strict stance of the tax authorities and ruled that extraordinary expenses can generally be deducted in the year they are incurred. High costs for adapting a home for disability needs cannot be spread over several years for reasons of leniency if they have only a very limited tax effect in the calendar year in which they were incurred (BFH ruling of 12.7.2017, VI R 36/15).
(2023): Can high renovation costs be spread over five years?
