Married Couple, one working

M

mover

Guest
This may be a somewhat mad suggestion but....

I am a PAYE worker and my wife is currently not working outside the home. If I employee my wife as a childminder, on some nominal salary,
would this constitute both of us being assessed as working and therefore
allow us increased tax credits?
 
Note that if you do this then you will presumably lose the [broken link removed] (and possibly any means tested welfare payments that she receives) so any benefit that might be possible through this scheme would want to outweigh that cost. In any case I don't think that there is a mjor benefit in doing this since the two spouses working increment in the standard rate band of up to €19K (2005) is not transferrable. Also as nominally the employer of your wife wouldn't you be liable for 10.75% employer PRSI on any payments to her? There could be other issues to consider. It sounds like it would not be worthwhile (assuming that it's even possible/legit) but it would be worth crunching the numbers to make sure.
 

Assuming that it is legitimate and allowed, the home carers credit will still be available if your wife earns less than €5,080 (unless they changed this limit in last weesk budget). Also assuming that if Class A prsi applies then the employers rate is 8.5% on earnings under €356 per week. Class M prsi might apply to this employment, where the employer and employee have no liability.
 
But you are correct that the extra tax credits would not be transferable, so it's hard to see how any benefit could arise (apart from to GDP!!).
 
Can you clarify why not? I was outlining the caveats that I could think of above but I wasn't sure if it was possible or not regardless of the pros and cons. Maybe you can explain? Thanks.
 
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