Dáil Éireann Debate, Wednesday - 14 December 2022
56. Deputy Neale Richmond asked the Minister for Finance his views on whether both single parents should be able to avail of the single parent tax credit in a situation in which one parent has primary custody but the other is paying maintenance costs; and if he will make a statement on the matter. [62578/22]
View answerBy way of background, the 2009 Commission on Taxation reviewed the One-Parent Family Tax Credit. It acknowledged that the credit played a role in supporting and incentivising the labour market participation of single and widowed parents but recommended that the credit should be allocated to the principal carer of the child only. A feature of the One-Parent Family Tax Credit was that it could be claimed by multiple individuals in respect of the same child, resulting in an unsustainable position.
Accordingly, the One-Parent Family Tax Credit was replaced by the Single Person Child Carer Credit (SPCCC) from 1 January 2014. The restructured credit has a nominal value of €1,650 per annum and also carries an entitlement to an additional €4,000 extended standard rate band. From 2023 that band will be €44,000 per annum, before liability to higher rate of income tax arises. However, the SPCCC is more strategically targeted, in that it will in the first instance only be available to the principal carer of the child, who has a qualifying child resident with him or her for the whole or greater part of the tax year and who satisfies the other conditions of the relief.
To qualify as a single person for the purposes of the SPCCC, the claimant must not be jointly assessed for income tax as a married person or civil partner, or be living with his or her spouse or civil partner, or cohabiting with a partner. An individual can only receive one SPCCC irrespective of the number of qualifying children residing with him or her. In addition, only one parent or guardian of a child can claim the SPCCC in a tax year.
It is possible for a qualifying primary claimant to relinquish his or her entitlement to the credit, in favour of a secondary claimant where the child resides with that secondary claimant for at least 100 days per year. However, it is not possible for the SPCCC to be split between two parties and where a child is the subject of an order and resides with each parent for an equal part of the year of assessment, the credit will be awarded to whichever parent received a child benefit payment under Part 4 of the Social Welfare Consolidation Act 2005 in respect of the child.
Maintenance payments are a matter for parents and if necessary, the courts to decide. It is not possible, and indeed would not be appropriate, for the tax code to take account of every possible variable.
I am satisfied that the tax credit in its current form is targeting State resources to where they are most needed. As such, I have no plans to review or amend the SPCCC at this time.
