Parliamentary Question Re: Home Carer Tax Credit

QUESTION NO: 68

DÁIL QUESTION addressed to the Minister for Finance (Deputy Michael Noonan) 

by Deputy Mattie McGrath

for WRITTEN ANSWER on 11/10/2016  

To ask the Minister for Finance if he will introduce a home carers credit in Budget 2017 to support parents who stay at home to care for their children thereby giving greater parental choice; and if he will make a statement on the matter. 

REPLY.

I am pleased to inform the Deputy that a Home Carer Tax Credit is already currently available to families where one parent works primarily in the home to care for children or the elderly.  Furthermore, I increased this credit in Budget 2016 to €1,000 and there is a commitment in the programme for Government to increase it further. In this regard, any further increase would generally be announced as part of the Budget.

The Home Carer Allowance (as it was then) was first introduced in Finance Act 2000 in the context of the commencement of a planned move to the full individualisation of the income tax system. Such a system would have resulted in a two-parent, single-earner family having the same net income from a given gross wage as a single individual i.e. it would no longer be possible for the tax bands and allowances of the non-earning spouse to be used by the earning spouse.  The Home Carer Allowance was introduced in order to ensure a balance was maintained between those going out to work and carers in the home, and in recognition of the choices families make in caring for dependents in the home.

In the case of PAYE taxpayers Revenue has, for a number of years, taken steps to automatically allow the Home Carer Credit without the person having to make a claim, wherever possible. For example, Revenue uses data it receives from the Department of Social Protection in relation to child benefit, together with other data from Revenue’s own records, to automatically grant the credit. Revenue also pre-populates the annual tax returns of self-assessed taxpayers with the Home Carer Credit where it was claimed in the previous year.  In 2014, the most recent year for which full information is available, the Home Carer Credit was claimed by approximately 80,900 families, at an exchequer cost of €60.9 million.

 

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