Big Firms Urge Tax Breaks For Working Carers

People who balance work with caring for old or disabled relatives, providing help with activities including house repairs and gardening, should be entitled to tax breaks, a group of leading employers will today tell the prime minister.

{mosimage}The companies, which include BT, John Lewis and IBM, say employees with caring responsibilities should be able to receive part of their salary as tax-free care vouchers, which they could then spend on services to help with the care.

The scheme, which might encompass extra home care, chiropody and a range of other health-linked services to assist relatives, could be modelled on a similar one introduced by the government to help parents meet childcare costs. Parents can choose to be paid partly in vouchers, and users of the scheme pay no tax or national insurance on this part of their earnings.

A similar care vouchers scheme would help employers support staff with care responsibilities, according to a letter from the employers to Gordon Brown and to the chancellor, Alistair Darling. It states: “Our reasons for supporting this proposal are both economically sound and community minded.

We feel that, as is the situation with new parents, employers and government have a duty to support individuals in this way. However, we also recognise that demographic changes are creating the need to find innovative ways to support staff with their caring roles, older and female workers in particular.”

Caring causes early retirement: 70% of carers under 50 and 80% of those aged 50-60 give up work because of their caring responsibilities, according to one study.

The employers, who also include HBOS, KPMG and the Nestor healthcare group, argue that the UK’s rapidly ageing society is creating a “massive demand” for care services, reducing the number of people of working age and draining the workforce of crucial skills. With care responsibilities peaking between the ages of 45 and 65, they say, employers and government must find ways to help people continue to work in later life while balancing their caring roles. Three in five people will care for someone during their lives, and within 30 years more than 25% of the population will be over the age of 65. The number of carers is set to rise to nine million.

Research from the London School of Economics, commissioned by care campaigners supporting the voucher scheme including Counsel and Care, predicted that, in return for £37m investment from the government, £83m could be generated for care services. Sally Davis, of BT, said the care voucher proposal offered “a straightforward, affordable and effective way for employers to support their staff with care responsibilities”.

The scheme has won some support in government, and the Conservatives have requested information on the proposal. But the Treasury, with an eye on cost, is understood to be unconvinced.