Michael Creed
Question:47. Deputy Michael Creed asked the Minister for Finance the way the Revenue Commissioners police entitlement to the one parent family tax credit; and if he will make a statement on the matter. [51163/13]
View answerThursday, 28 November 2013
Questions (47)
Written answers
The One-Parent Family Tax Credit is a tax credit that is available to a single parent, or a single person who has custody of and maintains a qualifying child who is living with him or her for the whole or part of a year. The parent or person must not be married, civil partner or co-habiting. A qualifying child is someone who is under eighteen years of age at the start of the tax year, or if over eighteen years of age, is receiving full time education or is permanently incapacitated either physically or mentally from maintaining himself or herself. The value of the tax credit is currently €1,650 per annum.
I am advised by the Revenue Commissioners that the qualifying conditions provided for in the legislation are very broad and make it difficult to ensure the proper administration of the One-Parent Family Credit. For example “part of a year” is not defined and there can be, in certain cases, multiple claims in respect of the same child by different individuals. Revenue operates on the basis of a ‘presumption of honesty’ which is set out in its Customer Service Charter and most applications for tax credits, including the One-Parent Family Tax Credit, are processed based on the information provided by the claimant on the application form.
The Revenue Commissioners have advised me that applications will be queried if there is information on Revenue’s records that does not entirely support the information provided by the claimant. In particular, Revenue’s real-time risk framework was developed to identify cases where claims for the tax credit should be challenged before they are granted. Revenue has regularly run nationwide projects specifically to validate One-Parent Family Tax Credit claims and to ensure that the claimants continue to satisfy all the criteria for entitlement to the credit. For example, one such project in the South West region in recent years yielded over €4 million for the Exchequer.
I am further advised that the Revenue Commissioners have been working collaboratively with the Department of Social Protection to ensure that the Commissioners have the most up-to-date information in relation to the claimant and the qualifying child. Such information would include whether the claimant is entitled to child benefit in respect of the qualifying child as well as details of the child’s date of birth.
As the Deputy is aware, the One-Parent Family Tax Credit (OPFTC) 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 OPFTC and will also carry the same entitlement to the extended standard rate tax band of €36,800 per annum. The proposed new credit, should the changes be approved by the Oireachtas, will operate differently from the One-Parent Family Credit, such that the credit will be available in the first instance, to the primary carer, that is, the single individual with whom the child resides for the greater part of the year. In addition I have brought forward a Committee Stage Amendment to allow the primary carer to relinquish the credit such that a non-primary carer can claim it in certain circumstances. The qualifying criteria for the proposed Single Person Child Carer Tax Credit should also help to ensure that the credit can be administered in accordance with the intentions of the Oireachtas.