Don’t miss out on this little known tax break

HOME CARER CREDIT

WHAT’s Ireland’s No 1 neglected tax break? The home carer credit doesn’t sound that exciting but it’s probably the biggest and most widely ignored major tax break that people can easily claim back — but don’t.

It can be worth a cool €1,200 a year and involves little hassle to claim. If you haven’t claimed it yet you could be due a rebate for this year’s credit — and the four preceding years you missed out on, going back to 2014.

The windfall could be substantial — nearly €5,000 if you meet the criteria fully.

Yet Taxback.com estimates that two-thirds of the 280,000 families entitled to the home carer credit are unaware of its existence.’

‘Last year we ran a survey which revealed that more than 63% of Irish people are simply unaware of this credit,’ said Barry Flanagan of Taxback.com.

Another survey by popular parenting website mummy pages. ie — whose many readers are part of the demographic that could be entitled to home carer’s credit — found a similar lack of awareness.

‘I’d say for at least two thirds of those from a (post Budget) survey, it would have come up that they weren’t aware of this tax credit,’ said the website’s mumin-residence Laura Erskine.

The 80,900 people who do claim home carer credit each got back on average €791 — €61million a year in total — at the last available official count (for 2014).

But this tax credit was worth just €810 back then. It’s gone up in nearly every budget since to reach the handsome sum of €1,200, which is well worth getting your hands on.

The rest of the 100,000-plus families in Ireland get nothing when many of them could be receiving the same amount — without doing anything except fill in a form.

The Revenue insists that it does everything within its power to help people claim, for example by pre-filling in forms with the credit already allowed for those who have claimed it in previous years. It also uses data on child benefit claims to automatically grant the credit each year. Yet that still doesn’t explain the huge number of people — two thirds of those who qualify — who don’t seem to have heard of it!

Fianna Fáil’s finance spokesman Michael McGrath said he has raised the issue in the Dáil as he suspected at least ‘tens of thousands’ of people are not claiming this important benefit for families.

The tax credit can put €1,200 straight into the pocket of a couple where one person works and the other is a carer, including caring for children, he said.

‘The name doesn’t help,’ he adds. Carer in a tax sense is normally associated with caring for a disabled or elderly person, not their own children.

He insists that we need to raise awareness of the issue, saying: ‘We need an awareness campaign from the Revenue to make sure people are better informed.’

So who is entitled to Home Carer Credit? The credit of €1,200 (in 2018) can be claimed by any married couple where one spouse is a housewife or house husband and cares for one or more dependent persons, which includes their own children under 18.

‘Given the current financial burden of childcare costs for many families, this tax credit could be a factor for any couples considering a one-income household, as it allows the stay-at-home partner to still work up to a limit of €7,200 a year,’ said Taxback’s Barry Flanagan.

‘In addition, if the stay-at-home partner’s income is in excess of the aforementioned limit, the credit may still be of use, as long as it doesn’t exceed €9,200.’