Calls for amnesty as carers hit with surprise tax bills

Ellen O'Donoghue

There have been calls for an urgent amnesty for tens of thousands of carers, who have received letters from Revenue saying they may face tax bills dating back years.

According to The Irish Times, less than 10 per cent of 104,000 people in receipt of welfare payments for carers are expected to have a tax liability, Minister for Social Protection Dara Calleary has said.

Family carers are to meet Revenue officials this week over their concerns that some may receive tax bills following the start of a new data-sharing arrangement between the Department of Social Protection and the Revenue Commissioners.

Revenue has written to 34,600 potentially affected carers – not all of whom may have a liability – about the new arrangement.

Under a long-standing arrangement, the Department of Social Protection shares information with Revenue on those receiving payments, including jobseeker’s benefit, maternity benefit, the State pension, and other benefits.

The arrangement allows tax to be deducted throughout the year in real time, instead of creating a full year’s tax bill at the end of the year.

The data-sharing arrangement has not previously been extended to the carer’s allowance and benefit, which are subject to income tax but are exempt from the universal social charge (USC) and PRSI.

Catherine Cox, spokeswoman for Family Carers Ireland, a representative body for the sector, told The Irish Times that carers save the State €20 billion every year, “yet they’re now being penalised rather than supported.”

The letters from Revenue have caused “huge anxiety and distress” among carers, she said.

Ms Cox said her organisation would meet Revenue officials on Thursday.

Carer's allowance has “always been taxable”, and there has been “no change” in policy, Mr Calleary said at a press conference on the Irish language in public services in his capacity as Minister for Rural Affairs and the Gaeltacht.

He said the department would be “sharing information with Revenue on a forward-looking basis” and that each case would be looked at “empathetically”.

He said the Government was “very committed” to carers, investing €1.2 billion this year in the carer's allowance and benefit, increasing the payments by €10 a week.

Labour's social protection spokesperson, Mark Wall, told Newstalk that the letters blindsided carers right across the country.

Mr Wall told the station that it is causing serious financial and emotional stress to families who are already carrying an enormous burden.

He said carer’s allowance is means-tested, and for many people, that created a genuine and understandable belief that they didn't owe tax.

"We’ve been informed that over 34,000 carers have opened letters from Revenue, either demanding tax back or demanding tax into the future. Given the fact that carers in this country save the State over €20 billion each year, it’s simply not good enough that Government are putting carers under this stress.

"I’ve been inundated over the last number of days from carers right across the country who are simply fed up with Government taking them for granted," Mr Wall said.

"What the Labour Party want to do, we want to see a clear guidance from Government that Revenue are not going to collect any backmonies due and if this requires legislation, then that’s what we want to see.

"But what we need is clarity, that there is no call on these carers who are doing such great work to pay back any monies that may be due over the last number of years," he said.

Revenue said in a statement to The Irish Times that “not all carers will have an income tax liability”.

“Revenue and the Department of Social Protection engaged with Family Carers Ireland and Care Alliance Ireland in advance of this change,” it said.

Revenue said it was not reviewing previous years following this change, but looking at “the timely collection of any tax on a forward-looking basis”.

“Where an underpayment of income tax arises, Revenue will collect any liability over an extended four-year period from 2027 onwards, through adjustments to tax credits,” it said.

Revenue is “open to engaging with taxpayers on their individual circumstances and will work with them to agree appropriate arrangements where needed."

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