Income for caring for a parent

Hi,
My mother has dementia and instead of us continuing to hire a full time carer for her she is going to come and live with me and my family. As I will have to be with her 24/7 and won’t be able to work it has been agreed that she will pay me for this. I am looking to find out what the most tax efficient way to do this is.
What I am thinking is –
She will pay rent to me under the rent a room scheme
She will gift me money of €3,000 a year.
She will also gift €3,000 a year each to my husband and 2 children.

Are there any rules around how cash gifts from grandparent to grandchild can be used? It will likely be necessary for the 6,000 she will be giving my children under the above plan to be used to pay for their education, holidays, presents and household bills. Is this above board?

I need to maximise the amount that my mother can give me and in the long run this is significantly cheaper (and better) for her than hiring a third party to live with her in her house.

My husband will have my tax credits but I believe that the €1650 PAYE Tax Credit is not transferrable so I would like to take advantage of this too if possible. As this will be my only income would she be able to pay me €8250 a year and use my tax credit to discount the tax payable on this (8250 @ 20% = 1650)? Can PAYE tax credit be used if it means that you don’t have to pay any PAYE tax?
I assume I would also need to pay PRSI. Would that mean 8250 x 4% = 330 per year?

I don’t want my mother to have to file a tax return because of it so what is the best way to do this? I assume this would be to set up as self employed.

If I only earn the €8250 a year that in the above calculation is free from income tax would I be exempt from USC as my income is under €10,036 even though my husband will be working?

I really appreciate any help you can give me on this. I have never done anything like this before so am totally new to working out tax.

Clinique said:

My husband will have my tax credits but I believe that the €1650 PAYE Tax Credit is not transferrable so I would like to take advantage of this too if possible. As this will be my only income would she be able to pay me €8250 a year and use my tax credit to discount the tax payable on this (8250 @ 20% = 1650)? Can PAYE tax credit be used if it means that you don’t have to pay any PAYE tax?
I assume I would also need to pay PRSI. Would that mean 8250 x 4% = 330 per year?

I don’t want my mother to have to file a tax return because of it so what is the best way to do this? I assume this would be to set up as self employed.

If I only earn the €8250 a year that in the above calculation is free from income tax would I be exempt from USC as my income is under €10,036 even though my husband will be working?

I really appreciate any help you can give me on this. I have never done anything like this before so am totally new to working out tax.

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If you set yourself up as self-employed you will not be entitled to the paye credit. You could presumably set your mother up as employer and do the tax returns, etc for her so she would not have to file a tax return, or alternatively hire an accountant to do it for her.

USC is calculated separately for individuals so your husband's earnings would not affect your USC.

There is a restriction on rent-a-room relief for offspring but I'm not aware of any restriction for other relatives so it should be allowable.

There is no issue with the 3k annual gift.
A few thoughts.
The rent a room idea I think is over-complicating it.
Would it not be a lot simpler for her to agree a weekly/monthly figure with you and the family and that she sets up a new bank account with a debit card that can be accessed by you and funded by her via standing order.
What happens once your mother becomes unable to look after her own affairs, who will continue to pay you as outlined. You need to address this now to make sure everyone is kosher with the idea, especially the other family members who might get a bit peeved with the idea of you perhaps been seen as "milking it"
Have you all agreed a value/cost of the home care you will be providing?
You mention "her house"
If she owns this house, and leaves it to come live with you, then it may screw up the asset test for both non-contributory State Pension and anything you might want to do with the Fair Deal Nursing Home Scheme as it is no longer her PPR.
In addition, if she rents it then she must file a tax return and this income will impact on the income tests for the items mentioned above.