The Office of the Minister of State and Finance, Joaquim Miranda Sarmento, confirmed that the Informal Caregiver Allowance is exempt from IRS, following a PS inquiry submitted to Parliament on August 27. The allowance is considered part of the solidarity subsystem and thus not subject to income tax.
The PS addressed the Government on July 30 due to reports from informal caregivers about the allowance being pre-filled as Category A income in their tax returns, with some receiving notifications for clarification from the Tax Authority.
However, the Government states that the Tax Authority has no record of such incidents.
The Finance Ministry clarified that the Tax Authority has not issued any binding information on this matter and is unaware of specific cases where the allowance was erroneously included as Category A income due to errors by taxpayers or third parties.
The Ministry emphasized that it is the taxpayers’ responsibility to review and correct any discrepancies in their tax returns, and they can file a complaint or request a formal review if errors are detected in their submissions.
The PS also inquired whether tax-exempt social benefits, including this allowance, will be encompassed in the new IRS income definition, a concept the Government aims to establish to address tax equity and reduce marginal tax rates.
Regarding this, the finance office indicated that any redefinition of the tax base will undergo thorough study, considering fiscal justice and social protection principles, especially concerning vulnerable groups.
On Monday, it was revealed that the National Association of Informal Caregivers (ANCI) and the Different Citizen Movement are receiving numerous complaints about cuts to social support for those receiving caregiver or disability allowances.
Liliana Gonçalves, president of ANCI, expressed to Jornal de Notícias that the high number of complaints suggests a directive to Social Security services, prompting technicians to follow these guidelines.
