Dáil Éireann debate -
Thursday, 31 Oct 1996

Vol. 470 No. 8

Written Answers. - Income Tax Allowances.

Brendan Kenneally

Question:

63 Mr. Kenneally asked the Minister for Finance the interaction which takes place between his Department and the Department of Social Welfare to ensure equity and consistency in view of the fact that a cohabiting couple cannot claim a married allowance, whereas at the same time the partner in such a relationship cannot claim from the Department of Social Welfare because of the means of the main earner; and if he will make a statement on the matter. [20131/96]

Minister for Finance (Mr. Quinn)

While the social welfare treatment of married and cohabiting couples is primarily a matter for the Minister for Social Welfare, in the Hyland case in 1989 the Supreme Court held that it was unconstitutional for the relevant social welfare provisions to treat a married couple living together less favourably than an (unmarried) cohabiting couple. This judgment has been given effect by treating cohabiting couples in the same way as married couples for social welfare purposes.

In relation to taxation, there are no special income tax allowances for unmarried couples living together. In this context, I would point out that tax law follows the general law relating to marriage. The basis on which the married person's tax free allowance, and double tax bands, is given derives from the Supreme Court decision in Murphy vs. the Attorney General (1980) which held that it was contrary to the Constitution for a married couple to pay more tax than two single people living together.

I am conscious of the difficulties which can arise for cohabiting couples in certain circumstances. The expert working group on the integration of the tax and social welfare systems, on which my Department and the Department of Social Welfare were represented, looked at,inter alia, the position of cohabiting couples generally. The group's report was published on 27 June 1996. The group's recommendations are being studied at present.

Noel Ahern

Question:

64 Mr. N. Ahern asked the Minister for Finance when the age allowance was introduced as an income tax allowance/relief; if the rate was always £200 per person; and if not, the rate it would be currently if it were indexed linked since its introduction. [20132/96]

Minister for Finance (Mr. Quinn)

The age allowance is at present £200 for a single or widowed person and £400 for a married couple. This allowance in its current form was introduced in the tax year 1974-75 at the rate of £25 for a single person and £50 for a married couple. These figures index linked since 1974 would be of the order of £140-£280 in the current tax year 1996/97.