Contributions to statutory long-term care insurance (social long-term care insurance and compulsory private long-term care insurance) are deductible as basic pension expenses as part of the special expenses. This is determined by Section 10 (1) No. 3 (b) EStG.
Contributions to statutory long-term care insurance (social long-term care insurance and compulsory private long-term care insurance) are deductible as basic pension expenses as part of the special expenses. This is determined by Section 10 (1) No. 3 (b) EStG.
Maximum amount
Voluntary contributions to long-term care insurance (classified in section 10 (1) no.3a EStG) are only deductible if the basic pension contributions – consisting of compulsory health and long-term care insurance contributions – have not yet reached the maximum amount of section 10 (4) EStG. If the pension costs i. S. v. Section 10 (1) No. 3 EStG (mandatory contributions to health and long-term care insurance) the maximum amount, these must be deducted and a deduction of pension expenses according to Section 10 (1) No. 3a EStG is ruled out (Section 10 (4) sentence 4 EStG) .
Voluntary long-term care insurance generally deductible?
The Hessian FG was disputed whether voluntary private long-term care insurance contributions such as basic pension contributions should be taken into account for tax purposes. The plaintiff argued that by limiting the deduction to the maximum amount that would apply even to a relatively low income, the special expense deduction would practically be abolished, although the expense would be incurred by every tax citizen in his lifestyle. However, the contributions to voluntary private long-term care insurance would essentially only minimize the gaps between the statutory insurance and the actual care costs. There is no longer any tax incentives for adequate private pension provision. According to the legal situation valid until 2009, these expenses were at least deductible in partial amounts by way of the maximum amount calculation (according to the legal situation up to and including VZ 2004, contributions to an additional voluntary long-term care insurance were with an additional maximum amount for insured persons who were born after December 31, 1957 Up to EUR 184 per year can be deducted as special expenses. This maximum amount will continue to be taken into account in the context of the cheaper test under the old law up to and including 2019).
The service contributions of the long-term care funds are limited to maximum amounts depending on the level of care and home or inpatient care. If inpatient accommodation is required for a person in need of care, the person in need of care must pay a high contribution to the care allowance. This additional payment often brings those affected to the brink of financial ruin. The protection against social cases arising for these reasons in the care sector or the coverage of the statutory or tolerated supply gaps are guaranteed solely by taking out additional private care insurance. These contributions should therefore be promoted by taking them fully into account as special expenses, which in addition only guarantee the basic needs (accommodation, food, care) and thus the subsistence level in a nursing home. The introduction of the Care Bahr Policy as state funding for private supplementary long-term care insurance from 2013 also shows that funding for private long-term care is absolutely necessary; but even here there is still a significant funding gap after the deal.
Hessian FG sees the legal regulation as constitutional
The Hessian FG, on the other hand, takes the view (judgment of 8 April 2020, 9 K 2170/17) that the provisions of the EStG, according to which the expenses for a voluntary supplementary long-term care insurance are not fully tax deductible even in cases in which this merely closes the coverage gap between the amount to be taken over by the statutory long-term care insurance – according to the regulations of SGB XI for basic care – and the expenses actually required for this in the case of a care situation, are not unconstitutional. The FG cannot form such a conviction because the legislature itself has seen that the provision in the area of statutory long-term care insurance “in view of demographic change” would be “exposed to increasing burdens as a pay-as-you-go system”; therefore the care provision allowance (so-called care-Bahr) was standardized in order to “create an effective incentive for additional care provision”. This insurance can be taken out as a private supplementary long-term care insurance with a state allowance.
Revision procedure
The FG has approved the revision because of its fundamental importance. The revision procedure is being conducted at the BFH because of the following question:
Are the contributions to the voluntary private long-term care insurance corresponding to the contributions to the basic health insurance and the payments to the statutory long-term care insurance as unrestrictedly deductible special expenses i. S. d. § 10 para. 1 no. 3 letter b, no. 3a EStG, so that they are above the maximum amount i. S. d. § 10 para. 4, para. 4a EStG, because only in this way can the scope of benefits be obtained in the care sector if necessary, which corresponds to the constitutionally guaranteed / ordered social assistance level or subsistence level (see decision of the BVerfG of February 13, 2008, 2 BvL 1/06). Similar cases can be kept open until the BFH (Az: XR 10/20) has decided.
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