Tax Credits

Thursday, 24 October 2019

Questions (61)

Anne Rabbitte

Question:

61. Deputy Anne Rabbitte asked the Minister for Finance the estimated cost of increasing the home carer’s tax credit by €100, €200, €300, €400, €500 and €600, respectively. [43931/19]

View answer

Written answers

I am advised by Revenue that the cost of increasing the Home Carer Tax Credit by the amounts requested by the Deputy are set out in the following table. I announced in my Budget speech that the Home Carer Tax Credit will be increased to €1,600 per year from 2020.

Home Carer Tax Credit Increase €	Home Carer Tax Credit Value €	First Year Cost €m	Full Year Cost €m
100	1,700	6.6	7.6
200	1,800	13.2	15.2
300	1,900	19.8	22.8
400	2,000	26.4	30.4
500	2,100	33.0	38.0
600	2,200	39.6	45.6

The above estimates have been generated by reference to 2020 incomes, calculated on the basis of actual data for the year 2017, which is the latest year for which tax returns are available. The estimates are provisional and may be revised. These estimates assume no behavioural response by taxpayers as a result of this change.

The Deputy may also be interested to note that a review of the Home Carer Tax Credit was carried out this year by my Department and Revenue following the methodology outlined in the Tax Expenditure Guidelines. It was published on Budget Day and is available on the Budget website at the link: http://www.budget.gov.ie/Budgets/2020/Documents/Budget/Report%20on%20Tax%20Expenditures%20Incorporating%20the%20Outcomes%20of%20Certain%20Tax%20Expenditure%20and%20Tax%20Related%20Reviews%20completed%20since%20c.pdf#page=74

The review was carried out to inform future policy making in relation to the Home Carer Tax Credit and forms part of the Department of Finance’s ongoing commitment to reviewing tax expenditures on a regular basis. It also fulfils commitments made in the 'First 5 Strategy: A Whole-of-Government Strategy for Babies, Young Children and their Families' and the 2019 Future Jobs Action Plan.