Vol. 507 No. 1
33 Mr. R. Bruton asked the Minister for Finance the consideration, if any, he has given to the tax position of a couple with children where there is one earner and the couple are not married; his views on whether the tax allowances afforded to them are unjustifiably low; and if he will make a statement on the matter. [14855/99]
There are no special income tax allowances for unmarried couples living together. In this context, tax law follows the general law relating to marriage. The basis of the treatment of married persons for tax purposes derives from the Supreme Court decision in Murphy v. the Attorney General, 1980, which held that it was contrary to the Constitution for a married couple to pay more tax than two single people living together. The tax treatment of unmarried couples who cohabit was unaffected by the Murphy judgment. Each partner is taxed as a single person and each is entitled to the tax free allowances and rate bands appropriate to single persons.
I am conscious of the difficulties which can arise for cohabiting couples in certain circumstances including those outlined in this question. An interdepartmental working group has been set up under the Department of Social, Community and Family Affairs to examine the treatment of married, cohabiting and one parent households under the tax and social welfare codes. This group is due to report later this year.
34 Mr. Noonan asked the Minister for Finance if tax concessions will be targeted at lower income groups in the next budget to improve income levels and competitiveness; and if he will make a statement on the matter. [16087/99]
The Government's policy programme An Action Programme for the Millennium, contains a number of commitments in relation to income tax. In my budget speech last December, I restated the Government's commitment to deliver, over the five budgets of this Government, the tax proposals as agreed by Fianna Fáil and the Progressive Democrats – which are aimed at reducing the burden of personal taxation to reward effort and improve the incentives to work. I also stated my view that high tax rates in many areas of taxation – personal, corporation, capital, inheritance – lead to disincentives, evasion and finally less yield to the Exchequer, constraining, Government in implementing socially progressive policies.
The precise shape of the income tax package to be included in next year's budget will be considered in the period leading up to the budget. In preparing the tax package, I will be taking account a number of factors – including the commitments in the Government's policy programme, An Action Programme for the Millennium, the views of the social partners, the particular needs of lower income groups and the need to maintain competitiveness.
35 Mr. Durkan asked the Minister for Finance if he will improve the income tax concessions for widows, widowers and others with a need for child caring facilities; and if he will make a statement on the matter. [16120/99]
In regard to child care, the Government is conscious of the growing wish for a recognition of child care needs in one form or another. It has already discussed these issues in some detail and proposes to examine the matter further. Certain measures were announced in the budget to facilitate and encourage the supply of child care places and these were provided for in this year's Finance Act.
The Government will, of course, take into consideration the views of the interdepartmental committee which the Minister for Justice, Equality and Law Reform has established to evaluate the recommendations made by the various expert groups that have reported on the child care issue. Any proposals in the taxation area arising from this committee's deliberations will be considered in the context of the preparation of the next budget.
As regards widows and widowers as such, there are already significant income tax allowances in the system for these taxpayers. In my first budget I overhauled and substantially increased the tax allowance available in the years following bereavement. In standard-rating the tax allowances this year, particular care was taken to protect the position of widows with children and lone parents generally.
