Dáil Éireann debate -
Thursday, 15 Feb 2001

Vol. 530 No. 5

Written Answers. - Tax Allowances.

Noel Ahern

Question:

112 Mr. N. Ahern asked the Minister for Finance his views on the tax situation of lone parents, not claiming lone parent allowance, who feel discriminated against compared with tax treatment of couples; if lone parents can earn a lesser amount on the standard rate; if this can be addressed in the Finance Bill, 2001, or in the next budget; if the lone parents tax allowance being given to the spouse minding children one night per week can be transferred to the mother as the father is now unemployed and not using his tax allowance or making his maintenance payments; and if he will make a statement on the matter. [4392/01]

Minister for Finance (Mr. McCreevy)

The tax position of lone parents entitled to the one-parent family allowance is broadly similar to that of married couples. Since 1979 one parent families are entitled to an additional tax allowance. A single parent, whether widowed, single, deserted or separated, who has a dependent child-children may claim the allowance which from 6 April 2001 will be £5,500 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.

A lone parent is also entitled to the single person allowance which is £5,500 from 6 April 2001. The two allowances are equivalent to the married persons allowance of £11,000. Therefore, for the purposes of tax allowances-credits, lone parents receive the same treatment as married couples. In the case of the standard rate band, from 6 April 2001, a lone parent is entitled to a band of £23,150, which compares favourably with the single persons band of £20,000. As part of the com pletion of the move to tax credits the income condition attaching to the lone parent allowance-tax credit is being abolished with effect from 6 April 2001.

The lone parent allowance may be claimed by an individual who is not entitled to the married persons allowance, is not living with another individual as man and wife during the year of assessment and has resident a qualifying child or children at any time during the year of assessment. I regard this provision as being reasonable, having regard to the circumstances of separated couples with children. There is no provision for transferring the one-parent family allowance between parents in circumstances where one individual is not using his or her allowances. If a couple are separated, then they cannot apply to have what in effect would amount to married treatment, that is, joint assessment in respect of the lone parent allowance. Indeed, separated couples with children are treated favourably as they are both individually entitled to the same allowances as a married couple. I trust this clarifies the position for the Deputy.