I propose to take Questions Nos. 261 and 263 together.
I am informed by the Revenue Commissioners that home carer tax credit is available in the case of a married couple who are jointly assessed to income tax where one spouse is a home carer. A "home carer" is a person who cares for one or more dependant persons.
A dependant person for the purposes of the tax credit must be either a child for whom social welfare child benefit is payable, a person aged 65 years or over or a person who is permanently incapacitated by reason of physical or mental infirmity. In addition, the dependant must reside either with the carer, on the same property as the carer or next door in a neighbouring residence to the carer or within 2 km of the carer.
The home carer tax credit currently amounts to €770 per annum. Where the home carer has some small income in his or her own right, the tax credit may still be due. The tax credit is due in full where the home carer's annual income does not exceed €5,080 and where it exceeds that amount, the tax credit is reduced by half the excess, effectively a reduction of €1 in the tax credit for every €2 of income, so that where the annual income exceeds €6,620 no tax credit is due. For example, if the income of the carer spouse is €5,850, a reduced tax credit of €385 applies. The income disregard was introduced to allow the home carer have a small income in his-her own right while retaining the tax credit. Also, the taper ensures that the credit is not lost all at once when income exceeds the amount of the disregard.
While the carer's allowance and carer's benefit payable by the Department of Social and Family Affairs are regarded as income for taxation purposes, no account is taken of these payments in determining the home carer's entitlement to the home carer tax credit.
In the case of a person who has left the workforce to care for seriously ill relatives and is in receipt of annual income in excess of €6,620, excluding the carer's allowance or carer's benefit from the Department of Social and Family Affairs, the home carer tax credit is not due. Any changes to the home carer tax credit would be a matter for consideration in the context of the annual budget and Finance Bill.