Dáil Éireann Debate, Thursday - 16 January 2014
84. Deputy Olivia Mitchell asked the Minister for Finance if he will reconsider the cases where the loss of the single person child carer credit results in the secondary carer moving into a higher tax band, as the loss of income caused is much larger than €1,650 per annum; and if he will make a statement on the matter. [2122/14]
View answerAs the Deputy is aware the One-Parent Family Credit ceased with effect from 31 December 2013 and was replaced by the Single Person Child Carer Credit, which is applicable from 1 January 2014. The restructured credit is of the same value i.e. €1,650 per annum as the one-parent family tax credit and also carries the same entitlement to the additional €4,000 extended standard rate band, which increases it to €36,800 per annum, before liability to higher rate of income tax arises. However, the credit will be more targeted, in that it will in the first instance, only be available to the principal carer of the child.
The withdrawal of the extended standard rate band for non-primary carers results in a maximum additional income tax liability of €840 per annum, depending on the income of the individual concerned.
To allow retention of the extended standard rate band while removing the credit would act to benefit those non-primary carers with greater incomes while providing no benefit to those on lower incomes. It would also go against the thrust of Government policy, which is that only one carer per family unit should attract the benefit of the new credit and band.
