Noel Ahern
Question:64 Mr. N. Ahern asked the Minister for Finance the historical developments in the establishment of different tax-free allowances for widows and widowers over that of single people; and the reason for this differential. [9336/96]
Written Answers. - Tax Free Allowances.
Prior to the tax year 1954-55 the personal allowance for a widowed person was the same as for a single person. In that year a higher personal allowance was introduced for widowed persons. The widowed person's personal allowance currently stands at £3,150 compared to £2,650 for a single person. An additional allowance of £2,150 is available to a widowed person who has dependent children. The lone parent allowance available to other persons is £2,650. This means that the personal allowances of both a widowed person with dependent children and other lone parents are currently £5,300, the same as the basic allowances for a married couple.
A special transitional allowance was 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 above allowances, is £1,500 for the first tax year following bereavement, £1,000 for the second and £500 for the third tax year.
In 1980 a special ceiling on mortgage interest relief for widowed persons was introduced and currently stands at £3,600 as compared with £2,500 for a single person. A special ceiling for widowed taxpayers on rent relief for private accommodation for those aged 55 years and over was introduced in 1991. When this relief was extended to all taxpayers in the 1995 budget, albeit at a lower level, widowed persons were granted a higher ceiling than single people. These reliefs currently stand at up to £1,500 and £750 respectively for a widowed taxpayer compared to £1,000 and £500 for a single person.
The position in relation to widowed persons, as indicated above, is that certain allowances are higher than the single person's in recognition of the fact that widowed persons may have taken on extra responsibilities in marriage which do not necessarily cease upon the death of a spouse. In addition the extra allowances are granted on compassionate grounds.
The tax treatment of widowed persons has been reviewed on a number of occasions and the existing tax treatment is considered to be reasonable.