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Dáil Éireann debate -
Tuesday, 25 May 1999

Vol. 505 No. 3

Written Answers. - Carer's Allowance.

John V. Farrelly

Question:

125 Mr. Farrelly asked the Minister for Finance if the amount which may be approved in relation to the new proposals on the carer's allowance will be taken into account as income; if this will affect the income tax position of the spouse; and if he will make a statement on the matter. [13475/99]

It is a general principle of taxation that, as far as possible, income from all sources should be subject to taxation. In line with this principle, the carer's allowances, in common with other social welfare payments, is therefore, reckonable as income for tax purposes.

The extent, if any, to which taxation will actually arise in a given case will essentially depend on the level of income other than the carer's allowance that a recipient or the spouse has in the same tax year. If there is no other income in addition to the social welfare payment, the existing exemption limits and allowances can be expected to ensure that there is no tax to be paid on the social welfare income itself.

The carer's allowance is paid in full by the Department of Social, Community and Family Affairs without tax being deducted and, in order to collect any tax due, it is necessary to reduce an individual's tax free allowances by an amount equal to the amount of the carer's allowance that they receive. If an individual is jointly assessed with his/her spouse, then the combined tax free allowances of the couple will be reduced in order to collect the tax due on the carer's allowance.

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