You are using an older browser version. Please use a supported version for the best MSN experience.

Thousands of families missing out on tax credit big enough for holiday

Independent.ie logo Independent.ie 13/05/2019 Charlie Weston
a group of people standing on top of a sandy beach: Thousands of families are losing out on a valuable tax relief large enough to help pay for a summer holiday. Stock Photo © EpicStockMedia Thousands of families are losing out on a valuable tax relief large enough to help pay for a summer holiday. Stock Photo

Thousands of families are losing out on a valuable tax relief large enough to help pay for a summer holiday.

Tax experts estimate that up to 60,000 families are missing out on the home carer credit.

It is worth €1,500 this year and can be claimed by a married couple and those in civil partnerships.

And it can be claimed for the last four years, which means some families are entitled to rebates of up to €4,100, according to Taxback.com.

It can be claimed where one spouse is the home carer, and cares for one or more dependants.

© Gettu

Dependants include children under the age of 18, people over the age of 65, and people with a disability who requires care.

Tax returns from the Revenue Commissioners show that in 2016 a total of 85,900 people claimed the credit, at a cost to the Exchequer of some €78m in total.

This means the average refund was €906, commercial director of Taxback.com Eileen Devereux said.

"Given that Revenue treats taxpayers as units, this means a total of 85,900 families claimed the credit.

© Gettu "If we contrast this with the estimated 146,698 households with children where one parent is looking after the home, it appears that only about 59pc of families are claiming their entitlement, which is not surprising when you consider the number of people that are aware of its existence," she added.

Tax experts said families got good news in the last Budget when the home carer credit was increased by €300 to €1,500.

But the tax refund specialists contend that this increase is of no benefit if people are not aware that they are entitled to it.

Ms Devereux said there was a huge gulf between the number of households entitled to the credit and those actually claiming it.

She said: "Given the current burden of childcare costs for many families, the tax credit could be a factor for any couple considering becoming a one-income household, as it allows the stay-at-home partner to work up to a limit of €7,200 a year.

"The credit is reduced for incomes above that figure and is capped at €9,200."

© Gettu Revenue has made a concerted effort to inform taxpayers of this entitlement and proactively suggest this to suitable people on its systems, Taxback.com said.

"They do look out for married/civil partnership and one-income families with children, but despite their best efforts, our anecdotal data suggest that this credit is at best misunderstood and frequently unknown," Ms Devereux explained.

To get the home carer credit, the carer's own income has to be under €7,200.

A reduced tax credit applies if the carer's income is between €7,200 and €9,200.

Carer's Allowance or Carer's Benefit are not taken into account when determining the home carer's income amount, but they are taxable sources of income.

This means that if you are claiming Carer's Allowance or Carer's Benefit, it will make up part of your jointly assessed income.

AdChoices
AdChoices

More from Independent.ie

Independent.ie
Independent.ie
image beaconimage beaconimage beacon