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Gnáthamharc

Tax Code.

Dáil Éireann Debate, Tuesday - 31 January 2006

Tuesday, 31 January 2006

Ceisteanna (295)

Richard Bruton

Ceist:

400 Mr. Bruton asked the Minister for Social and Family Affairs if arrangements have been made that persons taking up childminding under the €10,000 tax exemption scheme announced in the 2006 budget could obtain cover at least at class S even though exempt from payment of the insurance levy on earnings up to €10,000. [2806/06]

Amharc ar fhreagra

Freagraí scríofa

The childminding relief was announced by the Minister for Finance in budget 2006 and will be provided for in forthcoming legislation. It will allow an individual to supervise up to three children in his or her own home, exempting all related childminding earnings up to a maximum ceiling of €10,000 per annum from tax, social insurance and levy payments. If childminding income exceeds €10,000, the respective total amount earned by the minder will be taxable — as normal — under self-assessment procedures.

This new scheme for childminders is not a tax allowance but is in fact an income disregard of €10,000. It automatically follows that the amount earned — once it does not exceed €10,000 — is not assessable to either tax payments. Because self-employed income for social insurance purposes is primarily determined by reference to income assessable under income tax legislation, such income will not be reckonable for the purposes of making PRSI contributions without a change to social welfare legislation. It is possible, of course, that an individual contributor may opt to make a voluntary contribution to the social insurance system in order to maintain his or her existing contribution record.

I will consider the question of any changes to the social welfare code as a result of this measure in the context of forthcoming legislation.

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