Republic of the Philippines
HOUSE OF REPRESENTATIVES
Quezon City, Metro Manila

TWENTIETH CONGRESS
First Regular Session

HOUSE BILL NO. _949

Introduced by Representative Jaime R. Fresnedi

EXPLANATORY NOTE

This proposed legislation seeks to grant tax privileges to parents or legal guardians of
children with special needs. We envision to give a financial lifeline to these caregivers through
tax deductions in expenses that include tuition, therapy, diagnostic evaluations by a medical
professional, tutoring, transportation expenses and specialized instructional materials.

The Philippines, like many other nations, has a significant number of children with
special needs. These children are born with or develop conditions that require additional care,
support, and specialized services. Special needs can encompass a wide range of conditions,
including but not limited to autism, intellectual disabilities, hearing or visual impairments,
speech or language disorders as well as physical disabilities. Each of these conditions place
unique demands on families and it is often the parents or legal guardians who bear the brunt of
these challenges.

The statistics on special needs children in the Philippines are both illuminating and
concerning. According to a study by UNICEF in 2022, there are about 1.6 million Filipino
children with disabilities.' This could only mean that millions of children and their families are
currently grappling with the complexities of living with special needs. Furthermore, this
demographic is often underserved and marginalized, struggling to access the appropriate
education, medical care, and support systems that can make a significant difference in their
lives.

The financial burden on families with special needs children is substantial. Costs
associated with specialized therapies, medical treatments. assistive devices, educational
support, and transportation can be overwhelming. The emotional. physical, and financial stress
on parents and caregivers can be detrimental to their overall well-being. As per a study made
by the Department of Social Welfare and Development (DSWD) and the United Nations, the
families of children with special needs or disabilities are often 50% higher than other
children’s. The study states that health expenses account the highest for these particular
households at 10.7% of their overall household budget.”

The aim of this legislation is to alleviate the financial strain that many families with
special needs children face daily and to encourage them to continue providing the necessary

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care and support to these children thus promoting their overall well-being and development.
‘The government can then make tangible differences in the lives of these families by granting
these tax deductions and consequently foster a more inclusive and compassionate society for
all its citizens, most especially those with special needs.

In view of the foregoing, the immediate passage of this bill is earnestly sought.

JAIME NEDI
Representative
Lone District, Muntinlupa City


Republic of the Philippines
HOUSE OF REPRESENTATIVES
Quezon City, Metro Manila

TWENTIETH CONGRESS
First Regular Session

HOUSE BILL NO. 545

Introduced by Rep. Jaime R. Fresnedi

AN ACT
GRANTING TAX PRIVILEGES TO PARENTS AND LEGAL GUARDIANS OF
CHILDREN WITH SPECIAL NEEDS

Be it enacted by the Senate and the House of Representatives of the Philippines in Congress
assembled:

SECTION 1. — Declaration of Policy. ~ Its the policy of the State to promote the right of every
individual to relevant quality education regardless of sex, age, breed, socio-economic status, physical
‘and mental condition, social or ethnic origin, and political and other affiliation. Further, the State is
‘committed to ensuring equal access to education and healthcare, as well as the full benefits of education
for all its citizens.

SEC. 2. Definition of Terms. — For purposes of this Act, the following terms shall be defined as
follows:

(a) Autism is a developmental disability significantly affecting verbal and nonverbal
communication and social interaction, generally evident before age three (3), that
adversely affects a child's educational performance. Other characteristics often
associated with autism are engagement in repetitive activities and stereotyped
movements, resistance to environmental change or change in daily routines, and
unusual responses to sensory experiences. The term does not apply if a child's
educational performance is adversely affected because the child has an emotional
disturbance.

(b) Deafness is a hearing impairment that is so severe that the child is impaired in
processing linguistic information through hearing, with or without amplification that
adversely affects a child's educational performance.

(©) Emotional Disturbance is a condition exhibiting one or more of the following
characteristics over a long period of time and to a marked degree that adversely affects
a child's educational performance:

a. An inability to learn that cannot be explained by intellectual/sensory or health
factors;


b. An inability to build or maintain satisfactory interpersonal relationships with
peers and teachers;

¢. Inappropriate types of behaviors or feelings under normal circumstances;
d. A general pervasive mood of unhappiness or depression; and

€. tendency to develop physical symptoms or fears associated with personal or
school problems

The term includes schizophrenia. The term does not apply to children who are socially
maladjusted, unless it is determined that they have an emotional disturbance.

(d) Hearing Impaired is an impairment in hearing, whether permanent or fluctuating, that
adversely affects a child's performance

(e) intellectually Disabled is a significantly sub-average general intellectual functioning,
existing concurrently with deficits in adaptive behavior and manifested during the
developmental period that adversely affects a child's performance.

(6) Orthopedic Impairment is a severe orthopedic impairment that adversely affects a
child's educational performance. The term includes impairments caused by congenital
anomaly, impairments caused by disease, and Impairments from other causes.

(g) Qualified Children with Special Needs means a legitimate, illegitimate or legally
adopted child chiefly dependent and living with the taxpayer. This also covers children
with special needs who are placed under the legal custody of an immediate family
member or relative. The child should not be more than thirteen (13) years of age and
must be assessed by the Department of Education's Special Education Division and a
medical professional in order to qualify.

Provided, however, that children who are permanently disabled and who are unable to
fully take care of themselves are qualified no matter how old they are.

(h) Specific Teaming Disability is a disorder in one or more of the basic physiological
processes involved in understanding or in using language, spoken or written, which
may manifest itself in the imperfect ability to listervthink/speak/read, write, spell or do
mathematical calculations. Such term includes conditions such as perceptual
disabilities, brain injury, minimal brain dysfunction, dyslexia, and developmental
aphasia,

(i) Speech or Language Impaired is a communication disorder such as stuttering impaired
articulation, language impairment, or a voice impairment that adversely affects a child’s
‘educational performance.

@) Traumatic Brain Injury is an acquired Injury to the brain caused by an external physical
force, resulting in total or partial functional disability or psychosocial impairment or
both, and that adversely affects a child's educational performance. The term applies to

2


open or closed head injuries resulting in impairments in one or more areas, such as
cognition, language, memory, attention, reasoning, abstract thinking, judgment,
problem solving, sensory, perceptual and motor abilities, psychosocial behavior
physical functions, information processing, and speech. The term does not apply to
brain injuries that are congenital or degenerative or to brain injuries induced by birth
trauma.

(k) Visual Impairment is an impairment in vision that, even with correction adversely
affects a child's educational performance. The term includes both partial and sight
blindness.

SEC. 3. Deduction from Taxable Income. ~ A qualified taxpayer is entitled to a deduction of
Fifty Thousand Pesos (P50,000.00). Expenses that qualify for deduction are:

(a) Tuition for a private school;

(b) Therapy;

(c) Diagnostic evaluations by a medical professional;

(d) Tutoring;

(e) Transportation expenses to schoo! or a medical facility; and

(f) Specialized instructional materials.

The parent or legal guardian must provide more than half of the total financial support for the
child to qualify for the deduction,

SEC. 4. Implementing Rules and Regulations. - The Bureau of Internal Revenue (BIR) in
consultation with the Department of Education’s (DepEd) Special Education Division and Department
of Health (DOH) shall issue rules and regulations as may be necessary to carry out the purpose of this
‘Act, within ninety days from its enactment,

SEC. 5. Appropriations. — The budgetary requirement needed for the implementation of this
Act shall be taken from the current year’s appropriations of the BIR. Thereafter, such sums as may be
necessary for its continued implementation shall be included in the annual General Appropriations Act.

SEC. 6. Separability Clause. ~ If any provision of this Act shall be deemed unconstitutional or
invalid, the other provisions not affected there shall remain in force and effect.

SEC. 7. Repealing Clause, - All Acts, Presidential Decrees, Executive Orders and
Administrative Orders, Rules and Regulations and other such issuances or parts thereof which are
inconsistent with the provisions of this Act are hereby repealed or modified accordingly.

SEC. 8. Effectivity, — This Act shall take effect fifteen (15) days following its complete
publication in a newspaper of general circulation.

Approved,