Dáil Éireann debate -
Wednesday, 16 Jun 1993

Vol. 432 No. 4

Written Answers. - Married Women's Tax Allowances.

Trevor Sargent

Question:

57 Mr. Sargent asked the Minister for Finance if he intends to amend the legislation to ensure equality in the eyes of the law in relation to women in fulltime employment after marriage who are required to pool their tax allowance with that of their working husband resulting in only the husband getting a breakdown of allowances while the wife cannot receive a breakdown under current legislation.

Trevor Sargent

Question:

58 Mr. Sargent asked the Minister for Finance if, in relation to women in fulltime employment after marriage and whose husband has to give up work, he will give the reason a wife continuing in full-time employment must receive permission from her husband to acquire his tax-free allowance while if a wife has to similarly give up paid work her tax free allowance is automatically transferred to her husband; and when he proposes to amend the legislation to ensure equality in the eyes of the law.

Minister for Finance (Mr. B. Ahern)

I propose to take Questions Nos. 57 and 58 together. The tax system provides for three options for the taxation of married couples. These are joint assessment, separate assessment and separate/single treatment. Couples may choose the system which suits their particular circumstances and the Revenue Commissioners have published a leaflet giving details of the options currently available.

The equality issues to which the Deputy refers were addressed in the 1993 Finance Bill which has recently been passed by both Houses of the Oireachtas. These new provisions were designed to address the underlying concerns articulated by the Second Commission on the Status of Women in its recommendations. A publicity campaign to inform couples of the options open to them as a result of the Finance Bill changes will be undertaken in due course.

Joint assessment is the taxation option which applies to the bulk of married couples. Under this option one person is assessable and chargeable to tax on all the couple's earnings. Until the changes in the Finance Bill, 1993, the husband was always the assessable person. It is for this reason that full details of the couple's allowances are issued to the husband. A notice of tax free allowances also issues to the wife detailing the allowances allocated to her. The 1993 Finance Bill will come into effect for the years 1994-95 and subsequent years and provides that the couple may choose the wife or husband as the assessable person. The Bill also provides that, in relation to couples who marry after 6 April 1993 and where a specific choice is not made, the spouse with the highest income is treated as the assessable person. Where under the new system the wife is the assessable person full details of all allowances will be issued to her and details of the allowances allocated to her husband will be sent to him.

The requirement for a wife to receive permission from her husband to acquire his tax free allowances is a feature of the joint assessment system as currently operated. It arises because the husband is deemed to be the assessable person under joint assessment. Under the new provisions enacted in the Finance Bill, 1993, this requirement will apply equally to a husband where the wife is the assessable person.

Married women who do not wish to pool their allowances with those of their husbands may opt for separate assessment before 6 July in the year of assessment. Where a wife so opts she is treated as a single person throughout the year of assessment and details of all her allowances are included on her tax free allowance certificate. The tax payable by the married couple who have opted for separate assessment cannot exceed the tax which would have been payable if the couple had remained in joint assessment. To achieve this any unused allowances or rate bands of one spouse are transferred to the other spouse after the end of the year of assessment. In practice where it is possible to anticipate the end of year position accurately and where both spouses request it the Revenue Commissioners will arrange to transfer the allowances and rate bands, in so far as is practicable, at the start of or during the year.

Under separate-single treatment, tax-payers are taxed as single persons and allowances may not be transferred between them.