It is a principle of the taxation system that, in general, all income is reckonable in determining a person's income tax liability. In relation to home helps, in view of the low level of pay and the fact that many of them did not have any taxable income and would have been entitled to the PAYE allowance, Revenue decided many years ago to exclude payments to them from the PAYE system of taxation until further notice. I understand from the Revenue Commissioners that, from time to time, they monitored the average amounts paid to home helps.
The rate of pay to home helps has been reviewed and an agreement was concluded between the employers and the home help representatives. The revised rate of pay from 1 January 2000 is £5 per hour increasing to the group 1 non-nursing rate from 1 January 2001. The increases resulted in home helps having an hourly rate of pay which is higher than many employees who currently pay tax under the PAYE system. Consequently, it was necessary to bring home helps within the PAYE system of taxation.