My dad is living independently and fairly healthy at 93. He sold his last asset in 2013 and will be able to cover his own living expenses until 2017. He has €90,000 in savings.

He receives the payment for the property he sold in portions over the next few years, €30,000 per year. He pays €4,500 income tax on that amount. If he gets ill in the meantime and requires nursing home care, those funds would be depleted in one year.

He was self-employed and paying the appropriate income tax to the State, from 1947 till 1988. He took out a private pension fund. He became an employee in 1988 and PRSI payments were not acceptable by the State for people aged 66 or over at that time, so he could not contribute to a State pension in the interim.

His wife succumbed to Alzheimer’s disease and was cared for in a nursing home for five years. This depleted his own resources and whatever private pension fund he’d had. He exceeds the threshold for a non-contributory State pension and isn’t eligible for a contributory State pension. His person income runs out in two years. Not withstanding, he’s paying €4,500 income tax annually as outlined above.

I know that parents can make cash gifts to their children, allowable against income tax. However, does any mechanism exist whereby I can deduct any maintenance payments I make to my father from my income tax bill?

Mr BH, email

In many ways, I suppose, this is the scenario we all dread. You work hard all your life, make responsible provision for your retirement and then, due either to unexpected healthcare costs or simply because one lives longer than expected, those financial resources are depleted.

In your father’s case, it seems his projections for what he might need to maintain a standard of living have been thrown wildly off course by the very high cost of private nursing homecare for your mother when she became ill.

The bad news is that, although there are financial supports from the State, many are tied into social welfare payments and neither you nor your father meet the necessary criteria for these.

There is provision for you to employ a carer on behalf of your father and claim the cost as a tax deduction against your income but Revenue will require reassurance that your father is sufficiently disabled to require such care. From your description of him, this might be an issue.

It is likely that you will require a letter from his doctor confirming the need for care. The maximum that can be offset against tax is the actual cost of the care, or €75,000, whichever is the lower figure.

Whether you pay tax under the PAYE system or are self-assessed, you will need to file a Form HK1 - Claim for an Allowance for Employing a Carer each year. It’s a fairly straightforward form.

Assuming you father is eligible, you can employ a carer directly or through an agency. The one thing to note is that if you opt for the direct employment route, you will need to register as an employer and will be responsible for their tax deductions and also for ensuring that their rights in relation to working hours, holidays etc are met.

The cash gifts you refer to from a parent to a child exist certainly but they have nothing to do with income tax and create no offset.

Essentially you have either the small gift allowance of up to €3,000 a year that can be given from anyone to anyone else. For instance, you could give this annually to your father and he would face no tax on it but it would come from your after-tax income. Similarly, any spouse of yours, or siblings, children or, indeed, anyone could each gift up the €3,000 a year to him without tax implications for him.

One other avenue you might consider investigating is the potential of covenants to achieve what you want in a tax efficient manner. This is an area I might return to next week.

The situation you outline is likely to become a reality for an ever-increasing number of people with the phasing-out of defined-benefit or final-salary occupational pension schemes which paid a guaranteed income for life in retirement. For pretty much all bar the public sector, these are a fast-fading option.

For most, private pension schemes are now of the defined-contribution model where the final pension pot is determined by the amount you invest and how successful that investment is.

In most cases, not nearly enough money is being set aside for retirement. As a result, at retirement, especially with very expensive prices for annuities (essentially an insurance policy which guarantee a set income), many choose to continue managing their own pension funds via Approved Retirement Funds.

This, in itself, can be a risky game. Anything drawn down from the fund will be deemed income and taxed accordingly but issues, like your father’s medical and care bills for your mother, can quickly deplete resources, even if many will – for now at least – have the backstop of the contributory State pension that is not available for your dad.

With many of those on these new pensions only now starting to retire, it has the makings of a lot of misery down the line.

The bottom line is that the State will step in to support your father if and when he gets to a position where he meets the conditions under a means test for payment of the State pension on a non-contributory basis, as well as medical card and other State supports.

Tied agents and investment choices

In relation to the recent query from someone looking to set up a pension fund for an adult child, can you elaborate on your reasons why you advised that she should consult someone who is not tied to a particular product provider in your next article. It might give us tied agents the opportunity to answer your concerns.

Mr BC, email

Tied agents , as you know, are just as qualified as any other financial adviser, and are also subject to the same regulatory regime. As such, there is no difference in the expertise of the adviser.

But, and it is a big but, by the nature of being tied, they can advise people solely on the products offered by the company to which they are connected. They can advise people on what would best suit them from within that range but they cannot market products from other providers – which might be better suited to the individual.

When you’re dealing with major investment decisions, such as pension planning, it makes sense to shop around and to look at as broad a church of products as possible. Some providers only sell through tied agents and, in these cases, you have little choice in adviser but it is possible in most cases to find advisers who can run through a broader range of options. The main thing for the customer is to find the right product. Ultimately, charging structure and how that eats into an investment will be the most critical factor but the first thing is to find the product or products that will mostly likely suit your investment plan. That might come from a tied agent but if you don’t look further afield, you’ll never know.

Send your queries to Dominic Coyle, Q&A, The Irish Times, 24-28 Tara St, D2, or email dcoyle@irishtimes.com. This column is a reader service and is not intended to replace professional advice.