Dáil Éireann Debate, Thursday - 28 November 2013
37. Deputy Mick Wallace asked the Minister for Social Protection if she has made provision in her budget for the potential knock-on effects of reductions in maintenance payments owing to the abolition of the one parent family tax credit and the increased reliance on social welfare payments this might entail; and if she will make a statement on the matter. [50850/13]
View answerMy colleague, the Minister for Finance, announced in Budget 2014 the replacement, from 1 January next, of the one-parent family tax credit by new single person child carer tax credit. The Finance Bill (No. 2), 2013, currently before the Dáil, provides for the new credit which will have the same value as the current tax credit and will be available to the primary carer of a child. The Minister for Finance also informed the Dáil during the second stage debate on the current Finance Bill that he will be bringing forward an amendment at the committee stage of that Bill, which will allow the credit to be used by a non-primary carer in situations where the primary carer has no tax liability.
The current arrangements in relation to the assessment of maintenance payments made to a recipient of one parent family payment are designed to encourage the payment of maintenance. Where a recipient of one parent family payment is in receipt of maintenance payments, half of the value of these payments is assessed as means and the rate of payment is adjusted accordingly. In addition, where a recipient has rent or mortgage payments up to a maximum of €95.23 per week, these costs can be fully offset against any maintenance paid and no reduction occurs in the rate of one-parent family payment where the maintenance received does not exceed housing costs (subject to a maximum of such costs of €95.23 per week). Where the maintenance received does exceed this level then any amount over €95.23 per week is assessed at a rate of 50% and deducted from the one-parent family payment. Accordingly, the impact of the current welfare arrangements means that, in many cases, any reduction or increase in the level of maintenance paid can have no effect or relatively minimal effect on the rate of one parent family payment payable.
It is not possible, at this stage, to quantify the number of one parent family payment recipients currently benefiting from maintenance payments whose welfare payment rates may be indirectly affected by any potential behavioural changes consequent on the proposed tax measure and, accordingly, no adjustment has been made to the estimate for that payment in 2014. I will ask my officials to monitor any potential impacts during 2014.
