Dáil Éireann debate -
Thursday, 29 Jun 2000

Vol. 522 No. 4

Written Answers. - Tax Allowances.

Noel Ahern

Question:

120 Mr. N. Ahern asked the Minister for Finance his views on complaints of discrimination against married people with children as against unmarried people with children, or rather, couples with children living together and living apart; the present regulation for separated couples to claim lone parent tax allowances; the criteria needed for such; the way in which people who stay overnight with children once a week, month or year so qualify; if regulations are lax and are being abused; if he will examine this matter and outline measures to remove discrimination against couples living together. [19014/00]

Minister for Finance (Mr. McCreevy)

I assume the Deputy's question relates to the comparative tax treatment of married couples, cohabiting couples and lone parents. The position is as follows.

A married couple who are jointly assessed have a personal allowance of £9,400 and a standard rate tax band of £28,000 for a married one-earner couple and up to £34,000 for a married two-earner couple. As regards a cohabiting couple, each partner is treated as a single person and has the single person's allowance and standard rate band i.e. £4,700 and £17,000 respectively.

A lone parent, who may be an unmarried person, a widowed person, a deserted or separated spouse, receives the basic single personal allowance, as above, of £4,700. In addition, he-she receives the one-parent family allowance of £4,700, giving a total personal allowance of £9,400, equivalent to that of a married couple. The lone parent has a standard rate tax band of £20,150 compared to the single person's band of £17,000. In order to qualify for the one-parent family income tax allowance, a person must not be entitled to the married person's allowance, must not be living with a person as man and wife, and must prove, in the year of assessment, that a ‘qualifying child', as defined under section 462 of the Taxes Consolidation Act, 1997, is resident with him/her ‘for the whole or part of the tax year'. This allows the second parent to claim the allowance if the child resides with him/her for part of the tax year. The one-parent family allowance is provided in recognition of the extra cost associated with one parent rearing a child.

The tax allowances and bands are designed to take account of the differing circumstances of different taxpayers and I do not consider that they discriminate unfairly between any particular group of taxpayers and others. As regards the granting of the one-parent family allowance, this is done in accordance with the tax code and I am not aware that there is any abuse of the relevant provision.