Coronavirus: Care workers in Wales to pay tax on £500 bonus

More than 64,000 social care workers in Wales will get the cash bonus

Social care workers in Wales will pay tax on their £500 coronavirus bonus, despite Welsh ministers arguing the Treasury should not tax the payments.

UK ministers argued that the Welsh Government could increase the bonus to offset deductions.

First Minister Mark Drakeford said the payments have now begun to be paid out.

They will be taxed via HMRC's PAYE (Pay As You Earn) system. The Welsh Tories said Welsh ministers should ensure care workers received the full £500.

Plaid Cymru called the handling of the matter "baffling".

More than 64,000 social care workers were told by Mr Drakeford on 1 May that they would get a cash bonus of £500, at a cost of £32.2m.

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During a live Facebook question and answer session, he said: "I'm pleased to say that it's started to happen this month.

"So there are some people who will have had it already.

"It's a complex sector as you know, with hundreds of employers and not everybody will be able to be at the front of that queue, but payments have started already.

"I am keen to see that money out in the hands of the people for whom it was intended, and the more people can get it this month the better, and if some people don't we'll go on making payments into September."

The Welsh Government says the scheme was introduced "to recognise and reward the hard work and commitment of social care staff who have provided essential care" during the pandemic.

People who worked between 15 March and 31 May will receive the extra payment.

Responding to the announcement that the bonus would be subject to tax, Plaid Cymru Senedd member Delyth Jewell called it "baffling that the Welsh Government made this gesture without first checking that Westminster would honour it".

"Whilst the cruelty of making our carers pay tax on the bonuses is firmly at the door of Westminster it also smacks of incompetence from this Labour government," she said.

Conservative Senedd health spokesman Andrew RT Davies said the Labour Welsh Government "needs to honour its commitment to pay our dedicated carers the full amount they promised of £500".

"Any rowing back by Welsh Labour on this commitment will be a bitter betrayal," he said.

Welsh Government guidance states that to be eligible for the payment, staff must be:

• a paid employee of a registered care home or domiciliary care service

• an agency care worker

• an agency nurse who has worked in the same setting for 12 weeks or more

• a personal assistant paid through direct payments

Staff who work as or for contractors in care homes are not covered.

People who worked between 15 March and 31 May will receive the extra payment.