Dáil Éireann Debate, Tuesday - 5 November 2013
155. Deputy Billy Kelleher asked the Minister for Finance the number of persons that will be affected by the removal of the one-parent family tax credit in budget 2014; the number of those cases that will be pushed into the higher tax band; the amount that will be raised by the Revenue Commissioners as a result of this decision; and if he will make a statement on the matter. [45744/13]
View answerAs the Deputy is aware, the One-Parent Family Tax Credit is being replaced with a new Single Person Child Carer Tax Credit from 1 January 2014. The Single Person Child Carer Tax Credit will be of the same value, i.e. €1,650, as the existing One-Parent Family Tax Credit and will also carry the same entitlement to the extended standard rate tax band of €36,800 per annum. The new credit will be targeted such that it is available only to the primary carer of the child. A maximum of one credit will be available per single carer/claimant, regardless of whether he or she cares for more than one child. This is the same condition that applies to the current One-Parent Family Tax Credit. I am advised by the Revenue Commissioners that based on the most up to date data it is estimated that up to 15,400 individuals may be affected by the restriction of the restructured credit to the principal carer. In addition, it is tentatively estimated that about 5,550 of the estimated 15,400 individuals affected will now become liable to the higher rate of income tax i.e. 41% on a portion of their income as a result of this measure. However, ultimately it will depend on the circumstances of each individual carer.
Allocation of childcare responsibilities is primarily for parents to agree. Practical implementation issues are being considered as part of the Finance Bill process.
Finally, I am further advised by the Revenue Commissioners that it is estimated that the expected yield from replacing the One-Parent Family Tax Credit with the Single Person Child Carer Tax Credit from 1 January 2014 will be €18 million in 2014 and €25 million in a full year.
