Dáil Éireann Debate, Tuesday - 25 April 2023
213. Deputy Neasa Hourigan asked the Minister for Finance the estimated cost to the Exchequer of increasing the single-person child carer credit in Budget 2024, in line with the €150 increase to the married person or civil partner credit in Budget 2023; if consideration is being given to same; and if he will make a statement on the matter. [19106/23]
View answer214. Deputy Neasa Hourigan asked the Minister for Finance the estimated cost to the Exchequer of increasing the single-person child carer credit by €75, €100 or €150 respectively. [19107/23]
View answer215. Deputy Neasa Hourigan asked the Minister for Finance if he will consider equivalising the tax rate for recipients of the single-person child carer credit with the two-adult single-earner household rate; the estimated cost to the Exchequer of equivalising these two rates; and if he will make a statement on the matter. [19108/23]
View answer216. Deputy Neasa Hourigan asked the Minister for Finance the number of people in receipt of the single-person child carer credit. [19109/23]
View answerI propose to take Questions Nos. 213 to 216, inclusive, together.
The Single Person Child Carer Credit (SPCCC) was introduced from 1 January 2014. It replaced the One- Parent Family Credit. By 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.
The SPCCC is available to a single person 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 be cohabiting with a partner.
The SPCCC has a nominal value of €1,650 per annum and also carries an entitlement to an additional €4,000 extended standard rate band, such that those availing of the credit can earn up to €44,000 in 2023 before liability to higher rate of income tax arises. An individual can only receive one SPCCC irrespective of the number of qualifying children residing with him or her.
The credit is ordinarily given to the primary claimant. The primary claimant is the individual who proves that a qualifying child resides with him or her for the whole or the greater part of the tax year (i.e. a period greater than six months) and that the child is either his or her own or has been placed in his or her custody. A primary claimant can relinquish entitlement to the SPCCC to a secondary claimant. The secondary claimant can then claim the credit if he or she qualifies as a single person and the qualifying child resides with him or her for at least 100 days throughout the tax year. Detailed information on the SPCCC can be found on Revenue’s website at link: www.revenue.ie/en/tax-professionals/tdm/income-tax-capital-gains-tax-corporation-tax/part-15/15-01-41.pdf, which may be of interest to the Deputy.
I am advised by Revenue that the number of claimants of the SPCCC is set out in the publication ‘Costs of tax expenditures (credits, allowances and reliefs)’ which is available on the Revenue website at www.revenue.ie/en/corporate/information-about-revenue/statistics/tax-expenditures/costs-expenditures.aspx .
For the convenience of the Deputy, the table below shows the number of claimants each year for the period 2014-2020. This is the most recent data that is currently available for the credit.
|
2014 |
2015 |
2016 |
2017 |
2018 |
2019 |
2020 |
|
71,100 |
66,800 |
65700 |
67,400 |
70,500 |
77,100 |
77,100 |
I am advised by Revenue that the estimated cost of increasing the SPCCC by €75, €100 or €150 in 2023 can be found in the Revenue Ready Reckoner, available on the Revenue website at www.revenue.ie/en/corporate/information-about-revenue/statistics/ready-reckoner/index.aspx. Amounts other than those shown can be extrapolated using a straight line or pro-rata calculation. For the convenience of the Deputy, the relevant costs are set out below:
|
Increase |
First Year (€m) |
Full Year (€m) |
|
€75 |
3 |
3 |
|
€100 |
4 |
4 |
|
€150 |
6 |
6 |
The Deputy refers to equivalising the tax rate for recipients of the SPCCC with the two-adult single-earner household rate and the estimated cost to the Exchequer of equivalising these two rates. However, I am advised by Revenue that there are no specific rates of income tax for persons in different circumstances. Depending on the level of income, either a standard rate of income tax (currently 20%) or a marginal rate (currently set at 40%) applies. Income that is taxed at the standard rate of income tax is known as the standard rate tax band. The standard rate tax band for persons in receipt of the SPCCC is currently increased by €4,000 to a total of €44,000. The standard rate band for a joint assessed couple with one person working is €49,000. Further increasing the additional standard rate band given to recipients of the SPCCC to €49,000 is estimated to cost €14 million and €16 million on a first and full year basis respectively.
Finally, I am satisfied that the SPCCC in its current form is appropriately calibrated and there are no immediate plans to amend the credit as per the Deputy’s proposals.
