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Carer bonus held up by government tax wrangle

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A £500 bonus for carers is being held up by a tax wrangle between the Welsh and UK governments.

Health Minister Vaughan Gething told the BBC the Welsh government was “looking to exhaust every avenue” to persuade the UK government to not tax the payment.

The one-off payment in recognition of carers’ contribution during the coronavirus pandemic was announced over two months ago, but no payments have yet been made.

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Gething said: “It’s deeply frustrating for not just the government but, in particular, for care workers themselves.

“We’re still trying to get the UK government to a position where they won’t take tax and National Insurance off these payments.”

A UK government spokesperson said: “We are working with the Welsh government to determine the exact scope of the proposed bonus.

“Payments made in connection with employment are, however, chargeable to income tax and NICS unless explicitly exempt.

“The Welsh government has the powers and funding to gross up the payment, if its intention is for social care workers to benefit by at least £500.”

Last month, trade union Unison wrote to Boris Johnson after claiming care workers could end up with only a quarter of the £500 bonus from the Welsh Government.

Unison calculated that a carer earning above £12,500 would lose £100 to tax and £60 in National Insurance.

The increase in earnings of £340 would cause a knock-on effect with Universal Credit, which would reduce by £214.20, leaving just £125.80 of the original £500 award, the union said.

Tags : bonusrecognitiontaxWelsh government
Sarah Clarke

The author Sarah Clarke

2 Comments

  1. As a carer, I find this not worth having. At stated in the article by the time national insurance and tax contributions are taken out and then universal credit is reduced because of it, there’s not much left to be rewarded with. This was intended to be a gift for us working hard and being recognised for once. But the uk government have basically pushed us to the bottom of the pile again and made us irrelevant again.

    1. I’m also a carer and I totally agree I said on the day he announced we were to get it we probably wouldn’t and hey here we are getting a pittance of it ..

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