Revenue asking about Carer's Allowance after we queried tax credits

twoinfinities

My spouse works part-time, I am a full-time carer on Carer's Allowance. We queried my spouse's tax credits via MyEnquiries on the Revenue website. They replied that they were correct and went on to say:

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"On reviewing your record, I note that you were previously in receipt of Carers Income from the Department of Social Protection. Can you please confirm whether you are still in receipt of this payment.

If you are still in receipt of this payment, please confirm the weekly amount received.

If you are no longer in receipt of this payment, please confirm the date that the payments ceased. Please also submit a statement from the Department of Social Protection confirming the total amount of Carers Income received in the year that the payments ceased."

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Anyone have any thoughts etc...?

Xander10

It's a taxable source of income.

They liaise with Social Welfare and will freely have details.

Declare the details they requested, maybe you have some tax credits to cover it or joint income under threshold.

Jim_Hodge

Was income tax paid on the Carer's Allowance?

If you’re jointly assessed you should have a carers tax credit which was increased this year to 1600. Perhaps they’ve noticed it hadnt been used the last few years.

Font forget flat rate expenses too and backdate if necessary https://www.revenue.ie/en/personal-tax-credits-reliefs-and-exemptions/documents/flat-rate-expenses.pdf

twoinfinities

Thanks for your replies @Xander10 @Jim_Hodge @PencilSharpenerOnWheels

If you or anyone else has any further thoughts it would be great:

It never occurred to us to actively tell Revenue that I get Carers' Allowance - if we had thought about it we probably would have vaguely assumed the two Depts talked to each other and tax was deducted before the money was paid. Assuming that tax was not paid even Carer's Allowance adds up to a lot over 3 or 4 years - say it's €40,000-€50,000 at 20% tax could possibly owe €8,000-€10,000? That's a pretty scary thought for us...

If your partner is only working part time and you’re only income is 219 per week (you don’t pay tax on respite grant or domicillary care allowance ), once you take into account all your tax credits, unless your partner is earning great money, I’d say tax liability is minimal if any due at all.

You need to look at their balancing statement for 2021. See what credits and standard rate cut off are. You could take their gross pay for that year and add in your carers. Do your 2 figures combined keep you below the standard rate cut off? If so, all of it is taxable at 20%. So multiply by 20%. Now take all those tax credits off that 20% figure. Are you left with a negative number? If you are, no tax was due for that year and any tax that was paid should be refunded by revenue. If you have a positive figure, is it similar to the tax already paid that year? To reduce your tax liability you need to claim all flat rate expenses that you can, claim for prescription costs, dental and I think there’s some travel one but I can’t mind what it is right now.

Xander10

Work out any underpayment. It mightn't be as bad if credits available. If your only source of income is employments and SW, then they will likely allow you make any repayment over 5 years and collect same by reducing your tax credits, which mightn't be too painful.

rob316

As SW tax payments aren't deducted at source, revenue reduce your standard rate cut off and tax credits.