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Tax Credits

Dáil Éireann Debate, Tuesday - 17 April 2018

Tuesday, 17 April 2018

Ceisteanna (219)

Tom Neville

Ceist:

219. Deputy Tom Neville asked the Minister for Finance if he will address a matter regarding the case of a person (details supplied); and if he will make a statement on the matter. [15146/18]

Amharc ar fhreagra

Freagraí scríofa

The One-Parent Family Tax Credit (OPFTC) was replaced by the SPCCC from 1 January 2014. It is essential to review all tax reliefs, credits and incentives in order to ensure that they are properly targeted and if necessary re-focused in order that they can achieve the socio-economic objectives that are set for them within a system of finite fiscal resources. A provision that allowed, under the OPFTC, multiple claims in respect of the same child was unsustainable.

The OPFTC was examined by the Commission on Taxation in 2009, and its role in supporting the labour market participation of single and widowed parents was acknowledged. However, it recommended that the credit should be retained but that it should be allocated to primary carer of the child only. Agreement as to who will be the primary carer of a child is a matter for the parents or guardians, and is defined for the purpose of the credit as being the person with whom the qualifying child is resident for the greater part of the year.

In cases where there is an exact 50:50 split between parents, the credit is allocated to the parent in receipt of the child benefit payment from the Department of Social Protection.  However this is a secondary provision, and the main criteria for allocation of the credit is the residence provision above.  If a child is resident with one parent for the greater part of the year (i.e. for 183 or more days per year), that person should qualify as the primary carer of the child and therefore be entitled to claim the credit in their own right as primary claimant.

All issues concerning this credit are outlined in detail in the review of the SPCCC conducted by my Department in 2015 contained in the Report on Tax Expenditures, available online at

http://budget.gov.ie/Budgets/2016/Documents/Tax_Expenditures_Report_pub.pdf.

I am satisfied that the SPCCC is targeting limited resources to where they are most needed. I am however conscious of the significant contribution made by taxpayers generally to the rebalancing of the public finances, and of the challenges that individuals continue to face notwithstanding the improving economic conditions.

For this reason Budget 2018 has for the fourth year in succession, introduced reductions in the income tax and USC burden with a particular focus on low and middle income earners. It is my intention to continue to make progress on reducing the personal tax burden in future Budgets subject to having the necessary resources.

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