Less than 10 per cent of 104,000 people in receipt of welfare payments for carers are expected to have a tax liability, Minister for Social Protection Dara Calleary has said.
Family carers are to meet Revenue officials this week over their concerns that some may receive tax bills following the start of a new data-sharing arrangement between the Department of Social Protection and the Revenue Commissioners.
Revenue has written to 34,600 potentially affected carers – not all of whom may have a liability – about the new arrangement.
Under a long-standing arrangement, the Department of Social Protection shares information with Revenue on those receiving payments including jobseeker’s benefit, maternity benefit, the State pension and other benefits.
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The arrangement allows tax to be deducted through the year in real time, instead of creating a full year’s tax bill at the end of the year.
The data-sharing arrangement has not previously been extended to the carer’s allowance and benefit which are subject to income tax but are exempt from the universal social charge (USC) and PRSI.
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This began on January 1st last and while many carers will have been paying any tax on welfare supports, others may face bills they had not expected.
Catherine Cox, spokeswoman for Family Carers Ireland, a representative body for the sector, said carers save the State €20 billion every year, “yet they’re now being penalised rather than supported.”
The letters from Revenue have caused “huge anxiety and distress” among carers, she said.
“For carers who have been paying tax for years, nothing changes. But for carers who may not have been, and I don’t know what that reason might be – or even for carers who don’t know what they’ve been doing – the way it was corresponded has caused huge distress and anxiety,” she said.
Ms Cox said her organisation would meet Revenue officials on Thursday.
Speaking on Monday following media reports on the issue, Minister for Social Protection Dara Calleary said less than 10 per cent of the 104,000 people in receipt of receive carers’ allowance or carers’ benefit will have a tax liability.
Carers’ allowance has “always been taxable” and there has been “no change” in policy, said Mr Calleary at a press conference on the Irish language in public services in his capacity as Minister for Rural Affairs and the Gaeltacht.
He said the department would be “sharing information with Revenue on a forward-looking basis” and that each case would be looked at “empathetically”.
He said the Government was “very committed” to carers, investing €1.2 billion this year in the carers’ allowance and benefit, increasing the payments by €10-a-week.
The Revenue said in a statement that “not all carers will have an income tax liability” and “any liability depends on an individual’s overall income and the tax credits and reliefs available to them”.
“Revenue and the Department of Social Protection engaged with Family Carers Ireland and Care Alliance Ireland in advance of this change,” the Revenue said.
The Revenue said it was not reviewing previous years following this change but looking at “the timely collection of any tax on a forward-looking basis”.
“Where an underpayment of income tax arises, Revenue will collect any liability over an extended four-year period from 2027 onwards, through adjustments to tax credits,” it said.
Revenue is “open to engaging with taxpayers on their individual circumstances and will work with them to agree appropriate arrangements where needed”.
