Dáil Éireann Debate, Thursday - 20 February 2014
18. Deputy Clare Daly asked the Minister for Finance if he will review the decision to award the single parent tax credit to only one parent in view of the enormous financial and social hardship that is being imposed on families as a result of this budget measure. [8244/14]
Amharc ar fhreagraThe correct title of the new credit is the Single Person Child Carer Credit and not the single parent tax credit referred to by the Deputy. It is to the same value i.e. €1,650 per annum as the one-parent family tax credit and it also carries the same entitlement to the additional €4,000 extended standard rate band, which increases it to €36,800 per annum, before liability to higher rate of income tax arises. Only those on incomes above €32,800 would be affected by the loss of the extended standard rate band.
As the Deputy will be aware, the credit is more targeted, in that it is in the first instance, only available to the principal carer of the child. This follows on from a recommendation made by the Commission on Taxation in its 2009 report. A system that allows multiple claims in respect of the same child is unsustainable in the current fiscal environment.
The new credit is designed to be an activation measure, which was the original intention behind the One Parent Family Credit, which it replaces. It is designed to be an in-work benefit to support a principal carer to take up, or remain in, employment.
It is important to point out that those families who care for a relevant child for the majority of the year will retain access to the new credit and associated extended standard rate band.
This measure was discussed at length during the passage through the Oireachtas of the recent Finance Bill, at which I brought forward an amendment to allow the credit to be relinquished by a principal carer such that a secondary claimant can avail of it provided they meet certain qualifying conditions. The Government, by allowing for such relinquishing, where a principal carer chooses to do so for whatever reason, actually provided for an additional option for single person carers, over and above that recommended by the Commission on Taxation. The Finance (No. 2) Act 2013 was signed into law by the President as recently as 18 December 2013. Therefore, I have no plans to review the matter in the short term.
