Charlie McCreevy (Kildare North, Fianna Fail)

Senator Browne should know that this area was a specialist subject of Senator McDowell's when he was in the other House. The recommendation seeks to amend section 472 of the Taxes Consolidation Act 1997 to extend the employee or PAYE tax credit to home carers, with the credit to be given to the working spouse. Under section 466A of the Taxes Consolidation Act 1997, the home carer's tax credit is granted to married couples where one spouse remains in the home to care for a dependent person. We considered an identical proposal in the other House which attempted to link the value of the home carer's credit to the employee tax credit, as does Senator Browne's recommendation. Presumably, the home carers in question are those currently within the ambit of section 466A. To extend the employee tax credit as proposed in the recommendation would be to depart from the essential purpose of the credit which is to take account of the position of employees as compared to the self-employed. Widening the availability of the employee tax credit in this way would cost some €82 million in 2004 and €118 million in a full year.

As I indicated in my Budget Statement last December and as I repeated in the other House, the resources available for tax reductions this year are limited. I therefore made only limited changes in the area of personal taxation and these will cost an estimated €287 million in a full year. The increase I made in the employee tax credit was to ensure that income tax was not payable on 90% of the minimum wage. Over 39,000 persons were removed from the tax net. Apart from this and the increase in the income tax exemption limits for those aged 65 and over, there were no increases in the generality of the personal tax credits or in the standard rate band — the budgetary position would not have allowed it. I am, therefore, not in a position to accept the recommendation.

In regard to the statistical question raised by Senator McDowell, 140,000 persons claimed home carer's credit.