Dáil Éireann debate -
Thursday, 13 Dec 2001

Vol. 546 No. 5

Written Answers. - Tax Code.

Brian Hayes

Question:

128 Mr. B. Hayes asked the Minister for Finance if his attention has been drawn to the fact that following his budget, a spouse obtaining invalidity pension will no longer be able to obtain the full tax credit under the home carer's allowance; if he is considering a change in the Finance Act which would extend the £4,000 and £5,000 upper income limits for the home carer's allowance; and if he will make a statement on the matter. [32173/01]

Minister for Finance (Mr. McCreevy)

A home carer's tax credit, amounting to £600, 770, is available in respect of those spouses of married one income families who work in the home caring for children, the aged or incapacitated persons. It may be claimed by a married couple who are jointly assessed to tax and where one spouse, the home carer, cares for one or more dependent persons.

A dependent person is defined as a child in respect of whom child benefit is being paid, a person aged 65 years or over, or a person who is permanently incapacitated by reason of mental or physical infirmity. In general, all income is taxable including the majority of social welfare payments. The invalidity pension payable by the Department of Social, Community and Family Affairs is regarded as taxable income. Where the home carer has income in his or her own right, there still may be an entitlement to the tax credit. The tax credit is due in full where the home carer's income is less than £4,000, 5,080, per annum. Where the carer's income is between £4,000, 5,080 and £5,200, 6,604, the tax credit is reduced by £1 for every £2 of income so that where the income exceeds £5,200, 6,604, there is no entitlement to any tax credit.

I will look at the issue raised in the question in the context of the forthcoming Finance Bill.