Vol. 446 No. 2
5 Mr. Rabbitte asked the Minister for Social Welfare the proposals, if any, he has to ensure equity of treatment of cohabiting couples in the social welfare and tax systems in regard to the statement of the Minister of State at his Department of 8 September, 1994; and if he will make a statement on the matter. [1620/94]
In general, the tax system treats co-habiting couples as two single people, while the social welfare system regards them as a couple.
The current social welfare arrangements reflect the Supreme Court judgement in the Hyland case in May 1989. Mr. Hyland challenged provisions in the social welfare code which gave him, as a married man, a lower rate of unemployment assistance than he would have received if he was cohabiting. The Supreme Court ruled that these provisions were unconstitutional, in view of the State's pledge in the Constitution to guard with special care the institution of marriage and to protect it against attack. Following the Supreme Court judgment, the Government introduced legislation to extend the relevant provisions to cohabiting couples, so that all couples now receive the same treatment under the social welfare code.
The different treatment of married and cohabiting couples causes problems for those affected by it.
Last year I set up a working group to examine the integration of the tax and social welfare systems. The working group has already commissioned a major study by the ESRI on basic incomes which was published in September.
One of the issues being considered by the group is the unit of assessment for tax and social welfare purposes; the treatment of cohabiting couples is being examined in that context. In particular the question of the unemployment trap faced by cohabiting couples who want to move from social welfare to work will be addressed. The present arrangements whereby a cohabiting couple is treated as a married couple while on social welfare but do not enjoy the benefits of the tax system as it applies to married couples represent an obstacle to returning to the workforce. The group is expected to report in the near future. Any recommendations they make will be considered carefully by the Government.
Will the Minister stand over the statement she made at a public meeting in Dublin Castle, that the removal of the tax trap for cohabiting couples was a relatively simple administrative measure involving no loss of income to the Exchequer? If that is her belief why must she wait for a committee to report to her? As a Minister of State, does she not intend pursuing her beliefs through the partnership Government?
My main concern relates to cohabiting couples, many of whom are in long term relationships and have children. If they take up employment and cease receiving social welfare benefits they will be disadvantaged in that for social welfare purposes they are treated as a married couple but for income tax purposes they are treated as separate individuals. The working group examining the integration of the tax and social welfare systems is considering a number of complicated issues and its work is fundamental to the long term reform of both systems. I am anxious that its work be published to encourage debate. My views on this matter are not secret. There are anomalies on the tax and social welfare sides. In this case couples are treated similarly for social welfare purposes and the anomaly lies on the tax side. I have made no secret of my desire to have it removed. When the group publish its report — which I hope will be soon — the matter will be considered by Government.
I was in the House when the Minister for Social Welfare recognised cohabiting couples as spouses. Will the Minister agree that there is no moral justification for treating differently cohabiting couples living in bona fide common law relationships? As a nation which promotes the importance of the family, will the Minister agree that the social welfare and tax systems discourage the creation of family units in two areas? Working couples are discriminated against in the tax system, in other words, there is a disincentive for the relationship to bond. If a lone parent with one child and her partner who is in receipt of long term unemployment assistance establish a proper bonded relationship they lose approximately £26.40 per week. Will the Minister agree that those anomalies exist and that the two systems militate against healthy and happy unions?
The social welfare system we inherited, based on the 1940s Beveridge system, presupposes stable family units in which the husband goes out to work and the wife is a full time home and child minder. We are all aware that nowadays there are many different types of families. In this, the European Year of the Family, the Department has adopted the United Nations' definition of the family and the Minister recently addressed a UN conference in that regard. My main concern is that couples with children should be encouraged to join the workforce. In the partnership Government we are undertaking fundamental and long lasting reform of the social welfare system which will carry it into the next decade and take account of changes in family structures. My objective is to encourage maximum support for all types of families. Since the Government took up office, support for families with children has increased in both budgets. There have been systematic improvements in child benefit, an important target of this partnership Government.
That is why we are at the bottom of the league in terms of the family.
What is the Minister of State's definition of the family?
That is a separate question.
I am happy to accept the United Nations' definition of the family, which was officially accepted by the Government.
It is ironic that a Minister of State should suggest that a family can constitute any two people without being compatible with the law. As the Family Home Protection Act and many other laws bind people together, it is erroneous for the Minister to suggest that cohabiting couples — the relationship could comprise any gender — can draw benefits from the State.
My main concern relates to families with children. In most cases this involves a marriage relationship but, with changes in marital structures, there are now many non-marital families with children. I am concerned that all families, particularly those with children, should receive support. The reforms are designed to meet the needs of families and take account of the United Nations' definition of the family. It is on that basis we will proceed.
I want to bring this discussion to a conclusion. I am sure Members will agree that little progress has been made at Question Time today.
Far be it for me to impede that progress. A definition of the family in the laws of this land should be necessary to allow the Minister proceed along those lines. It is erroneous to suggest that anything other than a family under the terms of our Constitution should receive benefits over and above those to which they are normally entitled.
Is the Minister aware that the Minister for Finance said he saw no logic in taxing as single people those involved in a second relationship? What instructions did he get from the Attorney General regarding the constitutionality of treating cohabiting couples as spouses?
The Minister for Finance can reply more than adequately for himself. I will reply to questions addressed to me.
The question is specific——
I think the Deputy will agree that we have dwelt over long on this question. I presumed his last question was his final one. If he wants to ask another, please let it be brief.
It drew no response although it is a specific question, legitimately encompassed by Question No. 5 which asked if the Minister agrees with her colleague, the Minister for Finance, who says he sees no logical reason people who are in second, stable relationships, should be treated for tax purposes as single people, and his understanding——
The Minister of State is addressing her portfolio only.
I expect another Minister to know whether the Attorney General's direction to the Minister for Finance is supported by the Minister for Social Welfare.
I am calling Question No. 6.
