Vol. 502 No. 6
188 Mr. Haughey asked the Minister for Finance if he has considered the issue of taxation of earnings of married women; the plans, if any, he has to increase the tax-free income threshold for married women; and if he will make a statement on the matter. [8745/99]
With regard to the tax treatment of spouses, under the income tax code married couples have the option of joint assessment, separate assessment or of being assessed as two single people. Under joint assessment, either spouse can be nominated as the assessable person. Where they avail of this option they are entitled to double the allowances and rate bands available to a single person. The combined allowances can be allocated between the spouses on the basis of their instructions to the tax office. In a case where only one of the spouses is in paid employment, the facility for joint assessment is of significant benefit as the couple's total tax allowances can be allocated to the employed spouse.
The primary reason why married women who work may be taxed at a high rate on low earnings is that in these cases most of the couples' income tax personal allowances are being used by their husbands. In this case, the wife avails of only the PAYE allowance, which was standard rated and increased to £1,000 in the 1999 budget.
Deputies should, however, be aware that regardless of whether one or both spouses are in employment, the combined tax bill of all married couples will generally fall by over £10 per week as a result of the major tax chances announced in the budget. Nevertheless, the changes in standard rating of allowances and widening of the tax bands announced in the budget may leave one spouse with greater allowances and the other spouse with lesser allowances. However, the information leaflet issued recently by the Revenue Commissioners with the tax-free allowance certificates specifically points this out and invites married taxpayers who wish to change the way in which the allowances are allocated between them to complete the attached form or contact their local tax office.
189 Mr. Aylward asked the Minister for Finance if a tax free allowance in respect of a dependant who is 18 will continue for a person (details supplied) in Kilkenny. [8786/99]
I am informed by the Revenue Commissioners that the taxpayer has been in receipt of the single parent family tax-free allowance since the 1985-86 tax year.
Section 462 of the Taxes Consolidation Act, 1997 provides that in order to qualify for this allowance, the dependant, if over the age of 16 years, must be receiving full-time instruction at any university, college, school or other educational establishment.
The allowance has been granted to the taxpayer for the coming tax year which begins on 5 April, 1999. However, as the taxpayer's grandson is now 18 years of age the inspector of taxes has written to the taxpayer requesting confirmation that he is in full-time education.
