Improvements for the disabled and caregivers from 2021 onwards

Starting in 2021, the often suggested increase in disability lump sums will be implemented and combined with further tax improvements for the disabled and long-term care cases.

Taxpayers with disabilities can also claim the disability lump sum for income tax purposes instead of itemizing expenses for disability-related living requirements. This lump sum had been unchanged for 45 years, which is why not only the lump sums are now being drastically increased, but also further improvements for disabled persons and for family caregivers are being implemented in income tax. All the changes made by the "Act to increase the lump-sum allowances for the disabled and adjust other tax regulations" will apply from 2021.

• Lump sum: The lump-sum disability allowance covers increased expenses for daily living, the sole reason for which is difficult to prove. This lump sum, the amount of which depends on the degree of disability, will be doubled from 2021. This means that in future, those affected will be able to claim a lump sum of up to €2,840 instead of the previous maximum of €1,420. For blind and disabled people who are helpless, the lump sum will increase from the previous 3,700 euros to 7,400 euros. All other disability-related expenses that do not fall under the lump sum (e.g., conversion or travel costs) can continue to be additionally taken into account for tax purposes, provided they exceed the reasonable burden.

  

• Travel costs: Instead of the time-consuming individual proof of travel costs incurred due to disability, a lump sum regulation will be introduced in 2021 in the amount of the previously applicable maximum amounts. This means that people with a walking disability of at least 80 % or with at least 70 % and the characteristic sign "G" will in future be able to claim a lump sum of 900 euros. For people with exceptional walking disabilities and the "aG" mark, as well as blind or disabled people with the "H" mark, the lump sum will even be 4,500 euros. This new lump sum for travel expenses is deducted from the reasonable burden and is also the maximum amount for the deduction of disability-related travel expenses as an extraordinary burden.

• Disability under 50 %: The procedure for taxpayers with a degree of disability below 50 % will be simplified. Additional requirements such as a permanent loss of physical mobility will no longer have to be proven from 2021. In addition, the system for disability lump sums will be adapted to social law. As a result, taxpayers with a disability of at least 20 % will also be able to claim the disability lump sum from 2021.

• Nursing Lump Sum: The Act also contains several improvements to the care lump sum. The care lump sum is primarily intended to cover the non-quantifiable expenses incurred by the caregiver for personal care. In addition to home care, the prerequisite for the granting of the care lump sum is that the caregiver does not receive any income for the care. On the other hand, the fact that the person being cared for is "helpless" is now no longer required. The current care allowance of 924 euros for care degree 4 or 5 will be increased to 1,800 euros, i.e. almost doubled. In addition, a lump sum of 600 euros is now granted for care degree 2 and a lump sum of 1,100 euros for care degree 3.

For employees who have already applied to the tax office for a disability lump sum as an allowance in the payroll tax deduction procedure, the Federal Central Tax Office wanted to automatically report the higher lump sum to the employer from 2021. In many cases, the amount was also successfully adjusted, however, there were also numerous cases where an amount of 0 euros was suddenly made available for retrieval.

The Office now intends to manually rework the cases that could not be adjusted fully automatically. After correction of the payroll tax deduction characteristics by the tax authorities, employers have the option of changing the payroll tax deduction for those affected, whereby the lump sum can be taken into account either retroactively from January 1, 2021 (spread over 12 months) or from the next possible first of the month (spread over the remaining months of the year).