Care home staff £500 extra payment could still be subject to taxation

There has been no movement on discussions between Welsh and UK Government over the tax implications of a £500 one off payment to care workers.

The payment will also be extended to agency staff and nursing staff employed in care homes, as well as personal assistants and domiciliary care workers providing care to people in their own homes.

Kitchen and domestic staff working in care homes will receive the £500 extra payment for social care staff. The payment will be paid to staff who were working between 15th March and 31st May.

There has been concern that due to tax rules the recipients would not see the full £500 payment, with tax and National Insurance contributions due, and it could also impact those who receive Universal Credit and be declared to the Department for Work and Pensions as income.

On June 5th the First Minister said at the lunchtime briefing, “We were disappointed to receive a letter from the UK Treasury, suggesting that they would not be waving tax or national insurance payments on that £500, but we continue to be in discussions with them. Those discussions are not yet over.

The UK Treasury has previously said, “We value the contribution of social care workers, particularly during the current crisis. 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”.

On Friday we asked the Welsh Government for an update on the payment, and if Welsh Government would be covering any shortfall due to taxation, or if the UK Treasury had agreed to cover any

A Welsh Government spokesperson told us: “We are deeply disappointed that the UK Government still intends to tax the £500 thank you payment we are making to carers in Wales as these one-off payments exist to recognise the extraordinary dedication and commitment of our social care workforce at the height of this crisis.”