Written Answers. - Widowed Persons' Financial Hardship.

Liam Aylward

Question:

22 Mr. Aylward asked the Minister for Finance if his attention has been drawn to the financial hardship experienced by widows and widowers with dependent children due to taxation anomalies. [15182/95]

Widowed persons are generally given special recognition by the income tax code and are treated more favourably than a single person. The widowed person's personal tax free allowance currently stands at £3,000. This is £500 higher than the personal allowance available to a single person which is £2,500. Furthermore, an additional allowance of £2,000 is available to the widowed person who has dependent children. This means that the personal allowances of a widowed person with dependent children are brought up to £5,000, the same level as the basic allowance for a married couple. In the year of bereavement, the widowed person also retained married treatment i.e. double rate bands.

There is also a special ceiling on mortgage interest relief for widowed persons, which is currently £3,600 as compared to £2,500 for a single person. In addition where a widowed person is in private rented accommodation and is under 55 years of age a tax free allowance of up to £750 per annum at the standard rate of tax is available, and if the widowed person is aged 55 or over the allowance is up to £1,500 at the taxpayer's marginal rate of tax. The similar allowances for a single person are £500 and £1,000 respectively.
Specific recognition is also provided in the tax code for the special difficulties faced by widowed parents in the years immediately following bereavement, through a special transitional allowance introduced in 1991 for widowed parents with dependent children to operate for the first three years following bereavement. This allowance, which is provided in addition to the allowances I have already mentioned, is £1,500 for the first tax year following bereavement, £1,000 for the second and £500 for the third.
Consequently, I am sure that the Deputy will agree that the income tax code provides particular assistance to widowed persons and especially so in the case of widowed persons with dependent children.