Vol. 490 No. 2
164 Mr. G. Mitchell asked the Minister for Finance if he will have examinations made into an anomaly (details supplied) which discourages couples surrendering the lone parent social welfare allowance in view of the fact that they do not qualify for tax allowances in substitution; and if he will make a statement on the matter. [9833/98]
There are no special income tax allowances for unmarried couples living together. In this context tax law follows the general law relating to marriage. The basis on which the married person's tax free allowance and double rate bands are given derives from the Supreme Court decision in Murphy v. 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.
While the social welfare treatment of married and cohabiting couples is primarily a matter for the Minister for Social, Community and Family Affairs, I should explain 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.
I am conscious of the difficulties which can arise for cohabiting couples in certain circumstances. An interdepartmental working group has been set up under the Department of Social, Community and Family Affairs to examine the treatment of married, cohabiting and one parent households under the tax and social welfare codes. This group is due to report by the middle of this year.
165 Mr. Aylward asked the Minister for Finance if his Department will review the tax free allowance awarded recently to a person (details supplied) in County Kilkenny which was reduced from £170 per week to £90 per week. [9844/98]
I am informed by the Revenue Commissioners that the taxpayer's tax free allowances have been reduced in the current tax year compared with the last tax year because his wife is now in receipt of an invalidity pension which is taxable. This pension is paid in full by the Department of Social, Community and Family Affairs without tax being deducted. In order to collect the tax due on the invalidity pension, it is necessary to reduce the taxpayer's tax free allowances by an amount equal to the taxable pension his wife receives.
The taxpayer's tax free allowances are now £100.18 per week. The original certificate of tax free allowances which issued to him for the current year showed his tax free allowances as £97.68 per week. This was because the taxpayer had not been allowed the full amount of expenses to which he is entitled. This has now been rectified and a revised certificate of tax free allowances is being issued.
