Joe Higgins
Question:108 Mr. J. Higgins asked the Minister for Finance if spouses in receipt of maintenance payments should be entitled to money gained from tax relief in respect of maintenance payments. [33946/04]
View answerThursday, 16 December 2004
Questions (111)
Written answers
The treatment of maintenance payments in the case of separated spouses is governed by section 1025 of the Taxes Consolidation Act 1997. The section deals with payments made under a maintenance arrangement. A maintenance arrangement is defined as an order of court, rule of court, deed of separation, trust, covenant, agreement or arrangement or any other act giving rise to a legally enforceable arrangement and made or done in consequence of the separation or the annulment or dissolution of a marriage.
Where a legally binding maintenance arrangement is in place, then tax law provides that a tax deduction for maintenance payments for the benefit of his or her spouse is granted to the paying spouse and the payments are taxed in the hands of the receiving spouse; or the separated couple may jointly elect to be treated for tax purposes as if the separation had not taken place and, where such an election is made, the payer does not receive a tax deduction for the maintenance payments and the receiving spouse is not taxable on them.
Where a payment made under a maintenance arrangement is for the benefit of a child, the parent making the payment is not entitled to tax deduction in respect of such payment and the payment is not regarded for income tax purposes as the income of the other parent or as income of the child.
Where a separated couple has not jointly elected to be treated for tax purposes as if the separation had not taken place and where either spouse has dependent children resident with him or her at any time during the tax year, the one parent family tax credit is due in addition to the basic personal tax credit. Where custody of a child is shared between spouses and the child is resident with both spouses at intervals during the tax year, the one-parent family tax credit is due to both spouses in respect of the same child. Cohabiting couples living together as man and wife may not claim the credit.
As regards the specific issue raised by the Deputy, I am informed by the Revenue Commissioners that under existing tax law, a spouse in receipt of legally binding maintenance payments is not entitled to the maintenance tax relief due to the spouse paying the maintenance or any money gained from tax relief, for example, a refund arising in the case of a retrospective claim in relief. There are no plans to change the current arrangements regarding the taxation of maintenance payments.