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.