Dáil Éireann Debate, Tuesday - 25 March 2014
245. Deputy Derek Nolan asked the Minister for Finance if he will restore the single person child carer tax credit for single fathers who lost their tax credit since 1 January 2014; and if he will make a statement on the matter. [13619/14]
View answerThe Deputy will be aware that the One-Parent Family Credit has been replaced with a new Single Person Child Carer Credit from 1 January 2014. The restructured credit is of the same value i.e. €1,650 per annum as the one-parent family credit and also includes 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 and the band are more targeted in that they are, in the first instance, only available to the principal carer of the child.
The person who receives the child benefit payment is being used as the initial indicator by the Revenue Commissioners to identify the individuals who are likely to qualify for the new credit. However, the credit will in the first place go to the person who cares for the child for most of the year. Agreement as to who will be the principal carer of a child is a matter for the parents or guardians.
The Commission on Taxation acknowledged that the One-Parent Family Tax Credit played a role in supporting and incentivising the labour market participation of single and widowed parents. However, in its recommendations it concluded that the credit should be retained but that it should be allocated to the principal carer only. The restructuring of the credit will achieve such an outcome.
This measure was discussed at length during the passage through the Oireachtas of the recent Finance Bill, at which I brought forward an amendment to allow the credit to be relinquished by a principal carer such that a secondary claimant can avail of it provided they meet certain qualifying conditions. The Government, by allowing for such relinquishing, where a principal carer chooses to do so for whatever reason, actually provided for an additional option for single person carers, over and above that recommended by the Commission on Taxation. The Finance (No. 2) Act 2013 was signed into law by the President as recently as 18 December 2013. Therefore, I have no plans to review the matter in the short term.
