Richard Boyd Barrett (Dún Laoghaire, People Before Profit Alliance)
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541. To ask the Minister for Finance the status of any plans to recategorise carer's allowance such that it is no longer taxable or reckonable as income for the purposes of means assessment. [46184/25]

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 first part of the Deputy's question regarding the recategorisation of carers' allowance such that it is no longer taxable, 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 is 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 be aware the Irish income tax system is highly progressive with those on lower incomes paying proportionately less tax than those on higher incomes. Therefore, the reality is that an individual who is in receipt of a means-tested payment will in many cases not have an income tax liability as the available tax credits will reduce any tax liability to nil.

However, it is a longstanding practice of the Minister for Finance not to comment in advance of the Budget on any tax matters which might be the subject of Budget decisions.

In relation second part of the Deputy's question on the recategorisation of carer's allowance such that it is no longer reckonable as income for the purposes of means assessment, this is a matter for the Minister for Social Protection.