Brian Cowen (Laois-Offaly, Fianna Fail)

This recommendation concerns the home carer's tax credit of €770 which under section 466A of the Taxes Consolidation Act 1997 is granted to married couples where one spouse works at home to care for children, the aged and incapacitated. The recommendation proposes that the amount of the home carer's credit should be the same as the maximum of the employee tax credit commonly known as the PAYE credit which by virtue of section 3 of this Bill, will amount to €1,490 in the current tax year. In other words the recommendation would increase the value of the home carer's tax credit by €720 per annum. It is estimated that to increase the home carer's tax credit as proposed would cost about €42.8 million this year and €63.5 million in a full year.

As I indicated in my Budget Statement last December, the total cost of the income tax and levy changes I made is €887 million in a full year, which is some 30% greater than the previous year's figure. The increases I made in the employee tax credit and the personal tax credit in addition to benefiting all workers, including the spouses to which Deputy Phelan is adverting, were to ensure that all those on the minimum wage are fully outside the tax net, and the measures removed from the tax net almost 52,000 low-income taxpayers who would otherwise be in the tax net this year.

The changes I provided for in the Bill are generous by any standards. I am not in a position to accept Senator Phelan's recommendation. The choices I made in the budget were fair and reasonable in the overall context. As I said, the overall tax benefits package was 30% greater than in the previous year. There will always be proposals or suggestions which are in addition or incremental to what I have announced in the budget. If people want me to provide €63.5 million in a full year for this recommendation, perhaps they might tell me what benefits they would like to reduce.