Dáil Éireann debate -
Wednesday, 15 Dec 1999

Vol. 512 No. 7

Written Answers. - Tax Allowances.

Noel Ahern

Question:

124 Mr. N. Ahern asked the Minister for Finance the personal tax allowance to widows and widowers; the length of time the £500 limit exists; when the personal allowance was first introduced; the number of widows and widowers who claim it; the annual cost in this regard; the requests, if any, he has received for it to be considerably increased; if he will consider these; and if he will make a statement on the matter. [27225/99]

Minister for Finance (Mr. McCreevy)

The personal allowance for widows and widowers in the current tax year is £4,200 which is given as a credit as to the standard rate of tax and a further allowance of £500 is due at the taxpayer's marginal rate.

The widowed persons allowance was first introduced in the tax year 1954-55 and the allowance at that stage represented an increase of £25 over and above the single allowance. The attached schedule outlines the history and quantum of the allowance since its inception. The difference between the allowance and the single personal allowance increased in the 1970s and in 1982-83 the difference increased to £500. That differential remained until the introduction of the tax credits in 1999-2000. With the move towards a credit system in addition to the single allowance credited at the standard rate the widowed person was given an additional allowance of £500 at his-her marginal rate.

A widowed person with dependent children is also entitle to:

(i)the widowed parent allowance, which for the year 1999-2000 is worth £1,050 at 24% and £2,650 at the taxpayers marginal rate and

(ii) the following additional allowance:–

–£5,000 in the first year after bereavement

–£4,000 in the second year after bereavement

–£3,000 in the third year after bereavement

–£2,000 in the fourth year after bereavement

–£1,000 in the fifth year after bereavement.

An estimated 75,000 widowed persons on tax records in 1999-2000 are entitled to claim the additional personal allowance of £500 at an estimated cost of £8.9 million in a full year.

As regards increases in the widows allowance I have announced the following changes in Budget 2000:.

–The personal allowance for single-widowed persons will be increased to £4,700 at the standard rate of tax.

–The additional allowance for widowed persons without dependent children will be doubled form £500 to £1,000 and standard rated. This is added to the £4,700 single/widowed allowance.

–The additional allowance for lone parents including widowed parents will be increased by £500 to £4,700 at the standard rate, giving widowed parents the same personal allowances as married couples, that is, £9,400 in total, all of which will be given at the standard rate of tax. To ensure no loss to widowed parents on the higher rate of tax, as a result of standard rating, their standard band will be increased to £20,150, that is £3,150 higher than the band for single taxpayers.

–The widowed parent's bereavement allowance which applies in the first five years after bereavement will be doubled to £10,000 in year one, £8,000 in year two, £6,000 in year three, £4,000 in year four and £2,000 in year five and standard rated.

I receive many pre-budget submissions from varying groups including the widows, all of which I take into account in the context of the budget.

Tabular statement follows.

Schedule

History of Personal Allowance for Widows/Widowers

Years	Widow/Widower Allowance£	Single Allowance£	Difference£
1954/55-1959/60	175	150	25
1960/61-1968/69	259	234	25
1969/70-1971/72	274	249	25
1972/73-1973/74	324	299	25
1974/75	550	500	50
1975/76	635	575	60
1976/77	685	620	65
1977/78	735	665	70
1978/79	935	865	70
1979/80-1981/82	1,185	1,115	70
1982/83-1983/84	1,950	1,450	500
1984/85	2,300	1,800	500
1985/86	2,400	1,900	500
1986/87-1987/88	2,500	2,000	500
1988/89-1990/91	2,550	2,050	500
1991/92-1992/93	2,600	2,100	500
1993/94	2,675	2,175	500
1994/95	2,850	2,350	500
1995/96	3,000	2,500	500
1996/97	3,150	2,650	500
1997/98	3,400	2,900	500
1998/99	3,650	3,150	500
1999/2000	4,200 @ standard rate,plus 500 @ marginal rate	4,200 @standard rate	500 continued @marginal rate
2000/2001	£5,750 @standard rate	£4,700 @standard rate	£1,000 @standard rate

Dan Neville

Question:

125 Mr. Neville asked the Minister for Finance if he will change the regulation whereby a person is denied lone parent allowance while fully supporting his wife and child where the child does not spend one night per year in his house. [27258/99]

Minister for Finance (Mr. McCreevy)

Section 462 of the Taxes Consolidation Act, 1997, provides for an allowance for widowed or single persons with children. The allowance is conditional on the child or children being resident with the taxpayer "for the whole or part of the tax year".

I have no plans to alter the conditions of this allowance.