Dáil Éireann Debate, Tuesday - 25 March 2014
200. Deputy Bernard J. Durkan asked the Minister for Finance if the single parent tax credit criteria can be amended to reflect equal treatment for both parents in cases where both of the parents of a child have joint custody; and if he will make a statement on the matter. [12977/14]
View answerAs the Deputy is aware, the One-Parent Family Credit has been restructured and replaced with a new Single Person Child Carer Credit from 1 January 2014. However, the credit is more targeted, in that it is in the first instance, only available to the principal carer of the child.
Given the difficult fiscal environment, it is essential to review all tax reliefs, credits and incentives in order to ensure that they are properly targeted and if necessary re-focused in order that they can achieve the socio-economic objectives that are set for them. A system that allows multiple claims in respect of the same child or children is unsustainable.
There is no specific tax credit for children in the tax code. Therefore, married or cohabiting couples are unable to avail of any additional credit to assist them in the financial maintenance of their children. In certain cases, such couples also need to maintain two households due to the location of employment, for example.
It is the responsibility of the parents to look after a child, including financially. The new credit is targeted to assist principal child carers to take up, or remain in employment.
Notwithstanding the above, as a result of an amendment which I brought forward at Committee Stage of the Finance Bill, a primary carer who is entitled to the credit and who does not wish to avail of it can choose to surrender it. A secondary carer may then make a claim for the credit, provided that the qualifying child resides with him or her for not less than 100 days in the tax year. In this manner, it is possible for both carers to claim the credit in alternate years, provided that all of the qualifying conditions are met.
It should be noted that where a primary carer is married, in a civil partnership or cohabiting they would not be entitled to the new credit (or indeed the former one). In such circumstances the primary carer cannot relinquish the credit to a secondary carer. In addition, a secondary carer who is married, in a civil partnership or cohabiting, would not be entitled to the new credit (or indeed the former one) regardless of the marital status of the primary carer.
This measure was only approved by the Oireachtas and enacted in Finance (No. 2) Act 2013 in late December. To amend the legislation in the manner suggested by the Deputy would not take account of all of the potential caring scenarios that exist for the relevant children.
