Dáil Éireann Debate, Wednesday - 18 October 2023
102. Deputy Carol Nolan asked the Minister for Finance to clarify the conditions that must be fulfilled for a person to claim carer's credits; what evidence is required or would be accepted to prove a person was a carer if, for example, they never applied for carers allowance but engaged in caring for a family member for a number of years; and if he will make a statement on the matter. [45388/23]
View answerThe Irish tax code provides for a wide range of tax credits, reliefs and allowances for individuals who are carers or have care responsibilities. Eligibility for these tax credits, reliefs and allowances is based on the conditions and criteria attached to each individual measure and the claimant’s personal circumstances.
It is also important to note that Revenue pro-actively corresponds with different cohorts of taxpayers to publicise the range of credits which they may be entitled to claim, however any individual who requires assistance in determining the full range of credits and reliefs which he or she may be entitled to claim, based on their personal circumstances, should contact the Revenue office which deals with his or her tax affairs. Contact details for various Revenue offices can be found at the following link:
www.revenue.ie/en/contact-us/index.aspx.
Following engagement with the Deputy’s Office, details of the main credits, reliefs and allowances available for individuals who are carers or have care responsibilities are set out below, with further details available at the following link:
www.revenue.ie/en/personal-tax-credits-reliefs-and-exemptions/index.aspx.
Exempt Income
An exemption from income tax applies in respect of the carer’s support grant and the domiciliary care allowance, which are payments made by the Department of Social Protection.
Home Carer’s Tax Credit
The home carer tax credit is provided for in section 466A Taxes Consolidation Act 1997 (TCA 1997) and is available to jointly assessed married couples or civil partners where one spouse or civil partner (the ‘home carer’) stays at home to take care of a dependent person.
A dependent person includes:
• a child in respect of whom the home carer, or his or her spouse or civil partner, is in receipt of child benefit;
• an individual aged 65 years or over; or
• an individual who is permanently incapacitated by reason of mental or physical infirmity.
The dependent person must normally reside with, or in close proximity to, the married couple or civil partners for the relevant year of assessment.
To obtain the full tax credit, which is €1,700 for the 2023 year of assessment, the home carer’s income for the year must not exceed €7,200. Carer’s Benefit and Carer’s Allowance received by the home carer is disregarded for this purpose. Where the home carer’s income is between €7,200 and €10,600 a partial credit will be available, but the credit available will be reduced to nil where the home carer’s income exceeds €10,600.
It should be noted that, as a result of Budget 2024, this credit will be increased by €100 from €1,700 to €1,800 as of 1 January 2024. The upper income limit in respect of the credit will be increased from €10,600 to €10,800 per annum as of 1 January 2024.
In addition, married couples or civil partners cannot claim both the increased standard rate band for dual income couples and the home carer tax credit in the same year of assessment. In practice, Revenue will grant whichever relief will provide the most beneficial treatment to the couple.
Dependent Relative Tax Credit
The dependent relative tax credit is provided for in section 466 TCA 1997 and is available to any individual who maintains, at his or her own expense:
• any relative (including the relative of a spouse or civil partner) who is incapacitated by old age or infirmity from maintaining himself or herself;
• either his or her own or their spouse or civil partner’s widowed parent (whether incapacitated or not); or
• a child of either the claimant or his or her spouse or civil partner, who resides with the claimant and on whose services the claimant, by reason of old age or infirmity, is compelled to depend.
In addition, any income due to the person being maintained by the claimant must not exceed the specified amount which, for the 2023 year of assessment, is €16,780.
The tax credit due, where the relevant conditions are met, is valued at €245 and a separate credit is available in respect of each person the claimant maintains. As noted above, this credit cannot be claimed in conjunction with the incapacitated child tax credit.
Employing a Carer
Relief for the cost of employing a carer to care for an incapacitated person is provided for in section 467 TCA 1997 and is available to any individual who incurs costs in employing another person to care for his or her spouse or civil partner, or a relative of their own or of their spouse or civil partner.
The incapacitated individual can be the claimant themselves, if he or she is the one who incurs the relevant cost.
The relief available, where the relevant conditions are met, is given by way of a deduction and is equal to the lesser of the cost incurred by the claimant and €75,000.
This relief cannot however be claimed where the person employed to take care of the incapacitated person is the same individual in respect of whom the claimant receives either the incapacitated child or dependent relative tax credits.
Finally, it is important to note that the cumulative relief available to individual taxpayers cannot exceed the total amount required to reduce his or her income tax liability to nil.
