Dáil Éireann debate -
Tuesday, 17 Oct 2000

Vol. 524 No. 2

Written Answers. - Tax Allowances.

Seán Haughey

Question:

230 Mr. Haughey asked the Minister for Finance the reason both parents can claim the tax free allowance for lone parents; his views on whether this discriminates against a married couple with children; the provisions in the tax code in relation to a married couple with children; and if he will make a statement on the matter. [22049/00]

Minister for Finance (Mr. McCreevy):

The position is that section 462 of the Taxes Consolidation Act, 1997, provides for an additional tax allowance for one-parent families. A single parent, whether widowed, single, deserted or separated, who has a dependent child or children may claim the allowance of £4,700 at the standard rate of income tax. A condition of eligibility for the allowance is that the child must live with the claimant for the whole or part of the year of claim. As a child may live with each parent for part of the year, both parents can claim the allowance. This provision dates from the Finance Act, 1979.

The initial legislation in the Finance Bill, 1979, as published proposed to apportion the new one-parent family allowance where a child or children were maintained jointly by separated or divorced parents; this apportionment was to be on the basis of the expense incurred by each in the maintenance of the child or children.

Subsequently, ministerial amendments were made to the Bill that granted the single parent allowance to each parent in the case where parents were separated and where the child or children resided with each parent for part of the year. It was decided that both parents should get the allowance rather than have one allowance shared between them.

This was considered to be the fairest approach as it was likely that serious difficulties would have arisen if the one-parent allowance was apportioned in the manner previously proposed. The amendments were welcomed and endorsed by the Opposition.

I regard this provision as being reasonable, having regard to the circumstances of separated couples with children.

The Deputy will be aware that in budget 2000 I introduced the home carer's allowance. This is a tax allowance of up to £3,000 at the standard rate of income tax which may be claimed by a married couple, provided they are jointly assessed, where one spouse, the "home carer", cares for one or more dependent persons. A child is a dependent person for the purposes of home carer's allowance. This allowance is restricted to married one earner couples where one spouse stays at home to care for the couple's children.