Dáil Éireann Debate, Wednesday - 23 May 2012
46 Deputy Colm Keaveney asked the Minister for Finance if he will consider an amendment (details supplied) to the Civil Partnership and Certain Rights and Obligations of Cohabitants Act 2010; and if he will work with the Department of Social Protection to advance such an amendment. [25413/12]
Amharc ar fhreagraThe position is that any future changes to the Civil Partnership and Certain Rights and Obligations of Cohabitants Act 2010 will be the responsibility of the Minister for Justice and Equality. The basis for the current tax treatment of married couples 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 and having the same income.
The treatment of cohabiting couples for the purposes of social welfare is based on the principle that married couples should not be treated less favourably under the social welfare code than cohabiting couples. This was given a constitutional underpinning following the Supreme Court decision in Hyland v Minister for Social Welfare (1989) which ruled that it was unconstitutional for the income a married couple received in social welfare benefits to be less than the couple would have received in such benefits if they were unmarried and cohabiting.
The Taxes Consolidation Act 1997 provides for the granting of tax credits based on the civil status of the claimant. A person who is single is entitled to a basic personal credit of €1,650 and this is doubled to €3,300 for a married couple or civil partners who are jointly assessed. Should the couple choose separate treatment or single assessment, each individual is entitled to a personal credit of €1,650. A cohabiting couple where both partners are working also get, in total, the same tax credits as a married couple or couple in a civil partnership (i.e. €3,300).
Married couples or civil partners can transfer tax credits and tax bands between the individuals, and this is of benefit where one of the individuals earns less that the 20% tax threshold of €32,800 or where one of the individuals has no income.
However, cohabitants are treated as separate and unconnected individuals for the purpose of income tax and, accordingly, credits, tax bands and reliefs cannot be transferred from one partner to the other.
