Paul Murphy (Dublin South West, Solidarity)
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175. To ask the Minister for Finance if he will ensure that carer’s allowance and carer’s benefit will no longer be subject to taxation; and if he will make a statement on the matter. [6872/25]

Paschal Donohoe (Dublin Central, Fine Gael)
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Carers play a fundamental supporting role in society and 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 and ensuring that the social welfare system is progressive and empowers people with a disability.

To answer the Deputy's specific question regarding the tax treatment of carer's allowance and carer's benefit, it is a general principle of taxation that, in the absence of a specific exemption, income from all sources is, in general, subject to tax.

Section 19 of the Taxes Consolidation Act 1997 (TCA 1997) provides that income from offices or employments, and from annuities, pensions or stipends payable out of State funds, is within the charge to tax under Schedule E. Section 112 TCA 1997 charges income tax on all Schedule E income received in a year, with the exception of proprietary directors who pay tax in the year the income arises. Therefore, all payments from the Department of Social Protection are considered taxable under Schedule E unless specifically exempted from income tax. Section 126 (6A) TCA 1997 provides for the exemption of certain payments from the Department of Social Protection from income tax which are listed in the table within Section 126 TCA 1997. As carer’s allowance and carer’s benefit are not listed as exempt payments within this table, they are therefore taxable.

However, the level of tax payable, if any, on such income is then determined by the personal circumstances of the recipient, taking into account factors such as the individual's other sources of income and the available tax credits and standard-rate bands.

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 the sound management of the public finances. However, there are no plans to depart from the present arrangements such that these payments are taxable sources of income.