Domestic helpers, with the 50% tax credit a family would save EUR 9,425 a year
The idea is to introduce a new incentive in place of the current contribution deduction for domestic work with a benefit for the irregularity rate in the sector that could drop from 54% to 21% and the emersion of some 460,000 undeclared workers
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Key points
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With a 50 per cent tax credit for households to be applied to the expenditure incurred on housekeepers, carers and babysitters, costs would be halved, with a benefit for the irregularity rate in the sector that could drop from the current 54 per cent to 21 per cent, and the consequent emersion of some 460,000 undeclared workers. The advantage in concrete terms? For a carer hired to care for a dependent person on a full-time, co-habiting basis, a family must set aside an annual budget of EUR 16,300 (including salary, holidays, thirteenth month's pay, and severance pay), plus EUR 2,550 in contributions. Applying a possible 50% tax credit would result in a 'discount' of no less than EUR 9,425, out of the total of EUR 18,850.
This is highlighted in the 2024 Report 'Family (Net) Work - Laboratory on home, family and domestic work' by the Assindatcolf Studies Office in partnership with Censis, Effe, Idos Study and Research Centre and Fondazione Studi Consulenti del Lavoro, which looks with interest at the introduction of a tax credit, the tax incentive already in force in France for decades, also in our country.
The costs to the state and the impact on the underground
.According to Assindatcolf's assumptions, the new measure should be accompanied by the elimination of the current contribution deduction for domestic work of up to EUR 1,549.37 per year and the doubling of contribution charges.
According to simulations, the cost to the State is estimated at 7.8 billion, but looking at the direct effects, it is estimated that this measure could produce not only a new demand for employment in the sector, but also a substantial emersion of irregular employment (60% is assumed). The combination of these two elements would bring the cost down to 3.3 billion. Then the indirect effects must be counted: increased consumption that households could sustain due to the impact of the measure on the household budget and the contribution and tax revenues from the potential new employment of family carers in other jobs (it is estimated that for every 100 family carers 30 employers are caregivers). Net of these conditions, the net cost of the tax credit would fall to 2.6 billion .
Reducing the cost of undeclared work has a significant impact in terms of lost tax revenue and IRPEF evasion. The current irregularity rate, averaged over the last five years 2017-2021, can be estimated at around 54%. With the new measure this could drop to 21%, bringing to light about 460 thousand workers who are now irregular out of an estimated 765 thousand (a total of 1.384 million employed, both regular and not). Considering that undeclared work weighs on the State's coffers about EUR 2.4 billion a year, including missed contribution revenue (EUR 1.5 billion) and IRPEF evasion (EUR 904 million), with the introduction of the 50% tax credit, according to Asssindatcolf's calculations, it could drop to EUR 959 million (EUR 361 million in IRPEF evasion and EUR 598 thousand in contribution evasion).


