Carers play a fundamental supporting role in society, and the 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 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. Carer’s Allowance and Carer’s Benefit are subject to Income Tax but are exempt from Universal Social Charge and Pay Related Social Insurance.
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. A person’s tax liability will depend on their individual personal circumstances, income levels and personal credits available to them and their family.
I am advised by Revenue that income tax liabilities are assessed in the round and are not calculated separately for each source of income. Various income sources are added together to arrive at a gross income, and then reliefs and deductions are applied to arrive at a taxable income. The various tax rates are then applied to the taxable income figure, having account of their standard rate cut off point, to arrive at a gross liability. Finally, tax credits are deducted from this gross liability to arrive at the net liability, which is the final liability owed. Based on how the income tax system operates, as outlined above, it is not possible to identify a net tax liability associated with one component of income.
As previously noted, the sharing of data on recipients of Carer’s Allowance and Carer’s Benefit by the DSP only commenced on 1 January 2026. Therefore, it is not currently possible to estimate the amount of tax that will be collected in respect of these payments as this will depend on the recipients’ total income and their total tax credits and reliefs for the tax year, which will not be known until the year has concluded and taxpayers are given the opportunity to confirm their incomes, reliefs and credits by way of filing their income tax return.
