697. Deputy Colm Burke asked the Tánaiste and Minister for Finance if he will consider removing carer’s allowance and benefit as taxable payments for the purposes of PAYE, noting the role carer’s have in caring for loved ones and the service they provide to the State; and if he will make a statement on the matter. [61199/26]

Carers play a fundamental supporting role in society, and the Government are committed to supporting individuals and families with caring responsibilities. This is acknowledged by the broad range of commitments in the Programme for Government to improving supports for carers.

It is important to state that there has been no change in the Income Tax treatment of Carer’s Allowance and Carer’s Benefit. Carer’s Allowance and Carer’s Benefit are subject to Income Tax but are exempt from Universal Social Charge and Pay Related Social Insurance.

As the Deputy may be aware, there is a long-standing data sharing arrangement between both Revenue and the Department of Social Protection (DSP) which facilitates the operation of both the tax and welfare systems. DSP had been reporting information on a significant number of taxable DSP payments to Revenue, including Jobseekers Benefit, Maternity Benefit, One-Parent Family Payment, State Pension (Contributory or Non-Contributory) and Bereaved Partners Contributory Pension but information for Carer’s Allowance and Carer’s Benefit has not previously been shared.

As data relating to Carer’s Allowance and Carer’s Benefit had not been shared between DSP and Revenue previously, it was the recipient’s responsibility to declare this income to Revenue. When a carer was granted the Allowance or Benefit, the DSP notice advised the carer that the Allowance or Benefit was taxable income. It was agreed by DSP and Revenue that from 1 January 2026, information on Carer's Allowance/Benefit payments will be included in the Taxable Payments Report shared directly with Revenue.

Where a person in receipt of payments from DSP also has an additional source of employment or occupational pension income, the mechanism used to collect tax due is by reducing the person’s annual tax credits and rate band, by the annual amount of their DSP income. This ensures that the DSP payment is paid gross to the recipient, while the salary or pension, as paid by their employer, will have any tax due on both the DSP income and the employment deducted from it. This aligns the taxation of Carer’s income with other taxable DSP payments and significantly reduces the risk of an end-of-year liability.

It should be noted that not all carers who are in receipt of Carer’s income will have a tax liability, particularly if their income level is below the taxation threshold, or they have sufficient tax credits to reduce their liability to nil. A person’s tax liability will depend on their individual personal circumstances, income levels and personal credits available to them and their family.

As the Deputy will appreciate decisions regarding taxation measures are made in the context of the annual Budget and Finance Bill processes, at the appropriate time, and having regard to available resources and the sound management of the public finances.