Eoin Hayes (Dublin Bay South, Social Democrats)
Link to this: Individually | In context | Oireachtas source

30. To ask the Minister for Finance if will consider a grace period, payment plans, or a disregard for the newly discovered liability of income tax accrued by those in receipt of carer's payment as a result of the new sharing of data on payments from the Department of Social Protection to the Revenue Commissioners from 2026 onwards; and if he will make a statement on the matter. [6912/26]

Simon Harris (Wicklow, Fine Gael)
Link to this: Individually | In context | Oireachtas source

Carers play a fundamental supporting role in society and the Government is 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 for carers.

It is important to state that there has been no change in the income tax treatment of Carer’s Allowance and Carer’s Benefit. It is a long-standing position that Carer’s Allowance and Carer’s Benefit are subject to Income Tax but are exempt from USC and Pay Related Social Insurance.

There is a long-standing data sharing arrangement between both Revenue and the Department of Social Protection (DSP) which facilitates the operation of both the tax and welfare systems. DSP already report information on a significant number of taxable DSP payments to Revenue, including Jobseekers Benefit, Maternity Benefit, One-Parent Family Payment, State Pension (Contributory or Non-Contributory) and Bereaved Partners Contributory Pension.

This has not previously been the case for Carer’s Allowance and Carer’s Benefit. As this data had not been shared between DSP and Revenue previously, it has been the recipient’s responsibility to declare this income to Revenue in a tax return.

Last year it was agreed by the Department of Social Protection and the Revenue Commissioners that, from January 1st 2026, information on Carer's Allowance/Benefit payments will be included in the Taxable Payments Report shared directly with Revenue.

As a result of this change, Revenue adjusts the tax credits and rate band allocations of recipients of Carer’s income payments in-year to ensure the full amount of tax is collected at source. This aligns the taxation of Carer’s income with other taxable DSP payments and significantly reduces the risk of an end-of-year liability.

It should be noted that not all carers who are in receipt of Carer’s income will have a tax liability, particularly if their income level is below the taxation threshold, or they have sufficient tax credits to reduce their liability to nil. The level of income tax payable, if any, on such income is 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 band.

The final taxation position for individuals, can only be quantified when they submit their annual income tax return. When submitting their return, taxpayers can claim any additional credits or reliefs such as health expenses and declare any additional income such as Carer’s income for the relevant period. Once the return is submitted, the additional income declared will be included for the purposes of calculating their tax liability.

Revenue advises me, that in conjunction with DSP, they met with Family Carers Ireland and Care Alliance Ireland in April 2025 to outline the rationale for the new process and to discuss measures aimed at reducing the administrative burden for carers. Revenue also wrote to approx. 34,600 individuals to advise them of this change. On 19 November 2025, Revenue established a dedicated phone line at 01-738 36 37 for any queries arising from the letters issued.

Revenue have confirmed that it is not carrying out a review of prior years in respect of Carer’s Allowance or Carer’s Benefit, solely as a result of this change. The focus of the new process is on the timely collection of any tax on a forward-looking basis. However, should an underpayment of income tax arise on foot of the declaration of taxable income such as Carer’s Allowance or Carer’s Benefit, Revenue will seek to minimise any potential hardship in such cases, by collecting the liability through a reduction of a taxpayer’s tax credits over an extended 4-year period, from 2027 onwards.

I am further advised that Revenue is open to engaging with taxpayers on their individual circumstances and will work with them to agree appropriate arrangements where needed.