Section 1025 of the Taxes Consolidation Act 1997 provides for the taxation treatment of payments made under legally enforceable arrangements by one spouse of a marriage to the other spouse in consideration, or in consequence, of the annulment or dissolution of a marriage or where the couple are separated. Legally enforceable arrangements include court orders, arbitration awards and deeds of separation including foreign orders and arrangements.
Where legally enforceable maintenance arrangements apply, the general position is that:
the spouse who pays the maintenance is entitled to a tax deduction for payments made for the benefit of the other spouse,
the maintenance payments are taxed in the hands of the receiving spouse,
the couple are treated for tax purposes as if unmarried.
In effect the maintenance payment is treated for tax purposes as if it was the income of the recipient and not the payer.
However, a separated couple may (except where a civil annulment has been obtained) jointly elect to be treated for tax purposes as if the separation had not taken place (provided they are both resident in the State and, if divorced, neither have remarried). When such an election is made, then the maintenance payments are ignored for tax purposes. The payer does not receive a tax deduction for them and the receiving spouse is not taxable on them.
In the case of non-legally binding maintenance payments, such payments are not taxable in the hands of the receiving spouse and the paying spouse cannot claim a tax deduction for them.
Where a relationship other than a married relationship dissolves, the income tax code makes no special provision in respect of the tax treatment of maintenance payments which may be made by one party to the other. There are no plans to change this arrangement which reflects, in part at least, the fact that, in such circumstances, no legal duty of financial support would have existed in the first place between the parties concerned.
I might also inform the Deputy that no special tax relief exists for married parents in respect of childcare, crèche costs or the general maintenance of their children. To the extent that the State supports parents in respect of their children, this is mainly done through the direct expenditure route in the form of Child Benefit payments and the Early Childcare Supplement and no distinction is made in this regard between married and unmarried parents.