Students miss out on millions by not claiming tax reliefs

Tax reliefs worth millions of euro are not being claimed by students or their families for third-level fees, a college support service estimates.

Dublin Institute of Technology (DIT) head of campus life Brian Gormley said families should check if they are eligible for the tax relief from the Revenue Commissioners to help meet with the rising costs of accommodation and other expenses.

The latest DIT Cost of Living Guide estimates that the cost of studying and living away from home could reach over €1,300 a month for the coming year, or an average €1,425 a month in Dublin due to higher rents.

In 2015, 29,300 claimants received tax relief worth €23.8m from the Revenue Commissioners on fees for third-level education.

While the Government’s free tuition scheme generally covers undergraduate courses for Irish students, the relief applies to postgraduate course fees and also to the student contribution that is charged for undergraduates. Around half of those doing undergraduate programmes are liable for the full €3,000 fee because they do not get any assistance from Student Universal Support Ireland, and anything over this amount is eligible for the tax relief.

This means a family with two or more children for whom the full €3,000 is paid for each can claim relief on amounts higher than that. If a family has half the student contribution paid by SUSI, then relief would be paid on the amount they pay for a third or subsequent child at college.

There must be hundreds of homes with two or more children who are going to college. We estimate that Irish families are missing out on millions of unclaimed tax relief,” said Mr Gormley.

“Even if they are on a grant, they may be eligible, or if a student has to repeat a year they can get the relief on the tuition fees.”

Mr Gormley said less than 12% of students claim back the tax, but the figure is just 7% in relation to full-time undergraduates. This may be because take-up rates on the relief would be higher among those paying course fees for postgraduate courses.

Although average monthly Dublin rents for a room in a house-share have gone up from €508 to €541, he said this is not quite as high as expected. There was a much more modest increase for cities outside Dublin, with average monthly rents rising just €3 to €430 based on DIT’s survey across property rental websites.

For students who stay at home while attending college, the average monthly cost is estimated by the DIT guide at €753, but growing numbers are commuting to courses every day because of unaffordable rents in college cities and towns.

We’ve had to start helping more students through our student assistance fund because they are travelling longer distances. Even though it’s cheaper than renting, it could be costing €50 or €60 a month, and commuting also has an impact on students’ involvement in college life,” said Mr Gormley.

DIT Campus Life’s Cost of Living Guide includes tips on how students can manage their finances, with travel savings one area the experts suggest as a target.

The availability of a Child Leap Card until a student turns 19 is another little-known benefit, it points out, which can reduce weekly travel costs by over 60%.

Mr Gormley attributed a lower-than-expected increase in average Dublin rents in typical house shares to lower demand for private rentals as more students commute or avail of the increased supply of purpose-built student accommodation.

Other than rent, living costs for students have seen mixed changes since last year in what Mr Gormley described as a low-inflation environment. While energy and other utilities costs are up €7 a month to €35, competition may be behind slightly lower monthly food bills and mobile phone bill spending, down €7 a month to €25.

When spread across the typical nine-month length of a college year, the €3,000 student fee for undergraduate courses works out at €333 a month.

Tax-free earnings from digs

The tax-free earnings to be made from renting rooms are being used to encourage homeowners to offer digs to college students.

The Union of Students in Ireland also wants this year’s Leaving Certificate students and others to reconsider digs-style accommodation as a more affordable alternative to traditional house-share or apartment living during college terms.

The union has relaunched its own online portal aimed at matching students with homeowners willing to rent a room. The operation of the website — — is financially supported by the Department of Education as part of its strategy to ensure adequate accommodation for college students.

Under Revenue Commissioners rules, anyone renting a room in their own home — as opposed to an investment property or second home — can earn up to €14,000 a year without having to pay any tax on it. This applies to any rent, whether received from a student or any other person who rents a room in an owner-occupied property.

As highlighted last year by the Irish Examiner, most recent figures show that nearly 6,500 people took advantage of the tax relief in 2015, 750 more than the previous year. But the €6.9m in total taxes they were reimbursed was down on figures of €8m to €9.3m in the preceding three years, suggesting fewer rooms or shorter lets, perhaps in response to greater publicity about the relief in connection with student rentals.

Dublin Institute of Technology (DIT) asked any families interested in hosting its students during the next college year to get in touch with its accommodation office.

Its DIT Student Pad service had more than 400 host families with accommodation for first-year students last year.

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