Social Expense Compensation: Who Can Benefit and How

Who can benefit from social expense compensation?

Residents of the Republic of Armenia who submit an annual income declaration can utilize the option for social expense compensation for amounts deducted from their income tax, applicable for social expenses incurred for themselves, as well as for family members (spouse, parents, and children).

You can benefit from social expense compensation if you have purchased a health insurance package from any insurance company operating in Armenia in 2024 or have paid for education at an educational institution in Armenia. Furthermore, educational expenses can pertain to kindergarten, elementary, foundational, secondary, initial vocational (craft), middle, higher, and postgraduate professional educational programs.

What is the amount of compensation?

The maximum amount for social expenses related to health care is 50,000 AMD per year, while for education, the maximum amount is 100,000 AMD per year. It is important to remember that the total maximum amount for social expenses incurred for you and your family members must not exceed 100,000 AMD per year. This means that if you receive a compensation of 100,000 AMD for education fees, you cannot additionally claim the 50,000 AMD health insurance compensation. You can utilize compensations from both areas simultaneously, provided their total does not exceed 100,000 AMD.

How to benefit from compensation?

To take advantage of social expense compensation, it is necessary to request a calculation document (invoice) from the service provider, meaning the insurance company or educational institution. This should be done by presenting your identification document and public service number. In cases where the declarant is you, but the social expense is incurred for a family member, you will also need to provide the family member's identification document and public service number, as well as documentation substantiating the family member relationship (for a spouse, a marriage certificate; for a parent, the parent's ID and the declarant's birth certificate; for a child, the birth certificate; and for an adopted child, the relevant documents confirming the adoption).

Subsequently, after submitting your annual income declaration, you must submit an application through the same system to receive the compensation amount from a unified account.

And remember, if you need to submit a declaration in 2025 for the reporting year of 2024 and you have purchased a health insurance package or paid for education in 2024 but do not have a calculation document, you can request a calculation document from the respective insurance company or educational institution to substantiate your social expense and obtain compensation.

It is important to know several features concerning the use of social expense compensation:

1. If the declarant citizen is a beneficiary of a social package, they cannot personally benefit from health-related social expense compensation; instead, they can only benefit from purchasing insurance packages for family members.
2. If the declarant citizen is utilizing tax returns on a mortgage loan or education fees or dividends, social expense compensation will be granted only if there is a positive difference between the income tax amounts calculated and/or paid for the reporting year and the income tax amounts returned to the individual in cases defined by the Tax Code.