Republic of the Philippines
HOUSE OF REPRESENTATIVES
‘Quezon City

FIFTEENTH CONGRESS
Second Regular Session

. 5104
House Bill No.

Introduced by Representatives
DIOSDADO MACAPAGAL ARROYO and GLORIA MACAPAGAL ARROYO

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

EXPLANATORY NOTE

There is always a financial burden for families who have children with
special needs. This proposal would like to ease such burden by allowing parents
and legal guardians a tax deduction to help deal with the expenses incurred for
therapy, education and treatment.

Children with special needs far outweigh the challenges in comparison
when dealing with regular and health children. Parents need to pay for
expensive and specialized services such as occupational, physical and speech
therapies to improve the quality of tife of their children

The Special Education Division of the Department of Education confirms
this and estimates the cost for taking care of a child with special needs to be at
least double compared to regular children.

A child with special needs is understood to be a child who is intellectually
disabled, has hearing impairments {including deafness), speech or language
impairments, visual impairments, serious emotional disturbance, orthopedic
impairments, autism and traumatic brain injury.


Based on the 2009 Family Income and Expenditure Survey, Filipino
families eam P208,000.00 and spend P176,000.00 on the average. This
translates to an average annual family savings of P31,000.00 for 2009.
Converting this on a monthly basis, the reported average income was
P17,200.00 and average expenditure was P14,700.00.

Families in the bottom 30% income group reported an average annual
family income of P62,000.00. Families in the upper 70% income group eamed
an average annual income of P268,000.00. On a monthly basis, the average
income o the families in the bottom 30% was P5,200.00 while the upper 70%
eamed an average of P22,300.00,

In the same year, topping the list of children with special needs who are
enrolled in a public elementary school are those with learning disabilities. A total
of 51,296 children were assessed as leaming disabled, while the number of
mentally retarded/intellectually disabled children stood at 13,119. Children who
are hearing impaired ranked third with 12,039

For school years 2007 to 2008, the number of enrolled children with
special needs in both public and private elementary schools stood at 92,429.
This translates to a 27.6% increase compared to school years 2004 to 2005
which totaled 79,118. Many children who have special needs no longer pursue
secondary education or manage to stay in elementary schools for an extended
period of time.

In the provinces, children with special needs are not given proper attention
‘since they are often grouped together rather than taught separately depending
on each child's condition. To make matters worse, the ideal 10 to 15 student-
teacher ratio is not maintained bringing the number of students up to 25 per
teacher.

This bill, therefore, aims to help parents and lagal guardians provide better
support and special care for children with special needs by reducing their
expenses.

We therefore urge our colleagues to ensure the immediate passage of this
bill

DIOSDADG MAN GAL ARROYO GLORIA MA@KPAGAL ARROYO
Second District, Camarines Sur Second/District, Pampanga

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Republic of the Philippines
HOUSE OF REPRESENTATIVES
Quezon City

FIFTEENTH CONGRESS
Second Regular Session

5100

House Bill No.

Introduced by Representatives
DIOSDADO MACAPAGAL ARROYO and GLORIA MACAPAGAL ARROYO

AN ACT
GRANTING TAX DEDUCTIONS 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. Deciaration of Policy. — It is 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, political and other affiliation. Further, the State shall promote and maintain
equality of access to education and medical care as well as the enjoyment of
benefits of education by all its citizens.

SECTION 2. Definition of terms. — For the purposes of this Act, these
terms are defined as follows:

1) Qualified Children with Special Needs — means a legitimate, ikegitimate
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 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. This does not cover children considered
mentally gifted or fast leamers


2) Autism — 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.

3) Deafness — 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.

4) intellectually Disabled - Significantly sub-average genera! intellectual
functioning/ existing concurrently with deficits in adaptive behavior and
manifested during the developmental period/ that adversely affects a
child's performance.

5) Hearing Impaired — An impairment in hearing, whether permanent or
fluctuating, that adversely affects a child’s performance.

6) Emotional Disturbance — 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 leam that cannot be explained by intellectual,
sensory or health factors

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

C. Inappropriate types of behaviors or feelings under normal
circumstances

D. A general pervasive mood of unhappiness or depression

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

ii. 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.

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7) Orthopedic Impairment - A severe orthopedic impairment that
adversely affects a child's educational performance. The term includes
impairments caused by congenital anomaly (e.g., club foot, absence of
some member), impairments caused by disease (¢.g., poliomyelitis! bone
tuberculosis), and impairments from other causes (¢.g., cerebral palsy,
amputations, and fractures or bums that cause contractures).

8) Visual Impairment — An impairment in vision that, even with correction’
adversely affects a child's educational performance. The term includes
both partial and sight blindness.

9) Traumatic Brain Injury — 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 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.

10) Speech or Language Impaired - A communication disarder such as
stuttering, impaired articulation, a language impairment, or a voice
impairment that adversely affect’s a child's educational performance.

41) Specific teaming Disability - A disorder in one or more of the basic
psychological processes involved in understanding or in using language,
spoken or written, which may manifest itself in the imperfect ability to
listen, think, speak, read, write, spell, or do mathematical calculations.
Such term includes conditions such as perceptual disabilities, brain injury,
minimat brain dysfunction, dyslexia, and developmental aphasia.

SECTION 3. Deduction trom Taxable Income. — A qualified taxpayer is
entitled to a deduction of Fifty Thousand pesos (P50,000.00). Expenses that
qualify for a deduction are:

+ Tuition for a private school

+ Therapy

+ Diagnostic evaluations by a medical professional

+ Tutoring

+ Transportation expenses to school or a medical facility
+ 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


SECTION 4. Implementation. — The Bureau of Internal Revenue in
consuttation with the Department af Education's Special Education Division and
Department of Health shall issue such rules and regulations as may be
necessary to carry out the purpose of this Act.

SECTION 5. Effectivity Clause. - This Act shall take effect fifteen (15)
days after its publication in the Official Gazette and two (2) newspapers with a
nationwide circulation.

Approved,