Dáil Éireann debate -
Tuesday, 4 Nov 1997

Vol. 482 No. 3

Written Answers. - Tax Reliefs.

Paul McGrath

Question:

165 Mr. McGrath asked the Minister for Finance if he will give details of the income tax and PRSI take from a single person, a widow or widower with three dependent children and a married couple with three dependent children and one income with total income of £12,000, £15,000, £18,000, £21,000, £24,000, £27,000 or £30,000 assuming no mortgage or other reliefs; his views on the obvious hardship in relation to widows and widowers in this regard; and the plans, if any, he has to address this injustice. [17744/97]

Minister for Finance (Mr. McCreevy)

The attached schedule sets out the total deductions in respect of income tax, employee's PRSI and levies, where appropriate, as requested. I would draw to the Deputy's attention that the tax treatment of a widowed person in the year of bereavement is at least as favourable as that of a married couple with the married allowance and double rate bands continuing to apply. In the year following bereavement, and thereafter, widowed persons are treated more favourably than a single person. The personal tax free allowance for a widowed person currently stands at £3,400 as compared to £2,900 for a single person. An

Total Income Tax, Employees' PRSI and Levies Deductions (a) additional allowance of £2,400 is available to a widowed person who has dependent children. This means that the personal allowances of a widowed parent are £5,800, the same level as the basic allowance for a married couple.

Specific recognition is provided for the special difficulties faced by widowed parents in the years immediately following bereavement, through a special transitional allowance of £1,500 for the first tax year following bereavement, £1,000 for the second and £500 for the third.

It is true that widowed persons receive the single person's tax band of £9,000, i.e. the amount of income after deduction of tax free allowances which is taxed at 26 per cent, while the married couple's tax band is £19,800. However, in this regard it must also be borne in mind that the married couple's allowance and band are given in respect of two adults. As the Deputy will be aware, a person in receipt of a social welfare widow/er's pension is exempt from the health and employment and training levies on all his-her income.

I have outlined the current arrangements for the taxation of widowed persons. The tax position of widowed persons, along with other taxpayers, will be considered in the context of preparations for the forthcoming budget.

Total Income Tax, Employees' PRSI and Levies Deductions (a)

	£	£	£	£	£	£	£
Total Income	12,000	15,000	18,000	21,000	24,000	27,000	30,000
Single Person	2,781	4,072	5,714	7,357	8,966	10,496	12,017
Widowed person, with three dependent children	2,027	3,010	4,322	5,965	7,574	9,104	10,625
Widowed person, with three dependent children, where the Social Welfare Widow/er's (Contributory Pension forms part of the total income (b)	1,472	2,387	3,632	5,207	6,782	8,357	9,914
Married couple, one earner, with three dependent children	1,603	3,006	3,992	4,975	5,924	6,926	8,447

(a) Assumed that the persons are full-rate PRSI contributors

(b) The Social Welfare Widow/er's (Contributory) Pension is not liable to PRSI and the total income of the recipient is exempt from the Levies. Full pension of £122.10 per weeek is assumed.