Paddy Burke (Fine Gael)
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I welcome the Minister of State.

Catherine Noone (Fine Gael)
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I also thank the Minister of State for coming to the House to take this Commencement matter which concerns the need for the Minister for Finance to outline the current position on the home carer tax credit, the number of people in receipt of same and if there are plans to reform it. As the Minister of State is probably aware, the home carer tax credit is outlined as being available to a spouse in a family with one earner who is caring in the home for a child eligible to receive child benefit or for an aged or disabled person. The tax credit has been increased to €1,000 in budget 2016.

At a public meeting I held on the matter of taxation I found that a great many people were unaware of this tax credit, even where it applied directly to their situation. It is clear that a potentially high number of people are missing out on this tax credit. It is also clear that there is still a distinct lack of knowledge among the general public of its existence, its broad application and how it can be availed of. Therefore, I ask the Minister of State how many are in receipt of it and if there are plans to continue it in future budgets.

Kevin Humphreys (Dublin South East, Labour)
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I thank the Senator for raising what is quite an important issue. It is interesting that she said the issue of lack of awareness was highlighted at public meetings. It is good, therefore, that it is receiving an airing and if even one person picks up on it, that will be positive.

The home carer tax credit is a tax support which may be claimed by a married couple or civil partners where one spouse or civil partner, the home carer, cares for one or more dependent persons. For this purpose, dependent persons include dependent children, the elderly or an incapacitated person. The credit, then the home carer's allowance, was introduced to the tax code in 2000 in the context of the move towards the individualisation of the income tax system which limited the transferability of standard tax bands between spouses. The allowance was introduced to acknowledge the choice families made where one spouse stayed at home to care for children or the elderly. In 2013, the most recent year for which complete data are available, Revenue records indicate that the credit was claimed by approximately 82,500 families at a cost to the Exchequer of approximately €61.9 million. That is one of the figures for which the Senator asked. It is interesting that more than 80,000 families are in receipt of the payment.

The Senator may be aware that the Minister for Finance, Deputy Michael Noonan,has enhanced the home carer tax credit in budget 2016. The current value of the credit is €810 per year. This will increase by €190 to €1,000 with effect from 2016.The credit is available primarily to single income families, but the home carer is allowed to earn a certain amount of income before the credit is withdrawn.Once the home carer's income increases above this threshold, the credit tapers off at a rate of €1 for every €2 earned. In this respect, a further enhancement to the credit introduced in budget 2016 intended specifically to be of benefit to lower-income families is an increase in the home carer's income threshold from €5,080 to €7,200, which is quite significant. This will allow the home carer to earn up to €7,200 in 2016 before the credit begins to taper out. It will fully taper out once the home carer's income reaches €9,200. This measure will be of specific benefit to lower-income families as, under the terms of the credit, a family may elect to claim either the home carer credit or the increased standard rate band for two-income families, but not both.

With regard to the numbers availing of the credit, it should be noted that the Revenue Commissioners have for a number of years taken steps to automatically allow the credit without the person having to make a claim, wherever possible. For example, Revenue uses data it receives from the Department of Social Protection on child benefit, together with other data from its own records, to automatically grant the credit each year in the tax credit certificates of PAYE taxpayers. I am advised that Revenue gave the relief automatically to approximately 81,000 taxpayers on this basis in 2015. This is one of the positive changes within the Department of Social Protection and Revenue whereby these are automatically done and do not need to be claimed in the first instance. Revenue also pre-populates the annual tax returns of self-assessed taxpayers with the home carer tax credit where it was claimed in the previous year.

Information with regard to the increase in the home carer's tax credit announced in budget 2016 is included in Revenue's budget summary leaflet published on its website. The Revenue Commissioners also produce a leaflet, available at their offices or on their website, giving details of the credit and how to claim it, and a number of illustrative worked examples.

The Minister, Deputy Noonan, has no further plans to change the home carer's credit at this time, as the budget 2016 enhancements to the credit will need to be incorporated into the system before further amendments are contemplated. Subject to completing the legislative process, the budget 2016 enhancements to the credit will come into effect from 2016. I thank the Senator for raising the issue.

Catherine Noone (Fine Gael)
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I thank the Minister of State for the reply, which is adequate and answered what I asked. On a positive note, I know the figure we have is from 2013, but it states that in 2015, the Revenue relief automatically applied to 81,000 and previously in 2013 some 82,500 families availed of it. Clearly, only a very small number of people do not have to actively look for it. It would be interesting to know how many families are entitled to it but are not aware of it. It is a helpful answer and I appreciate the Minister of State coming to the House to give it to me.

Kevin Humphreys (Dublin South East, Labour)
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The figures the Senator has brought out publicly are useful. Some 82,500 families are receiving €61.9 million. One of the benefits of the joined-up thinking with the Department of Social Protection and Revenue operating together is to ensure the maximum number of people receive that benefit without having to go through the process of claiming. The figures show clearly how efficiently it is being administrated. There is no harm in highlighting the issue. I am sure a number of families are not aware of it and are not claiming it. I thank the Senator for highlighting the issue.