Stephen Donnelly (Wicklow, Independent) | Oireachtas source

I agree that the purpose of the amendment is to close a loophole which may have been abused by some people who were caring for children for a short time and claiming a full €2,500 in tax deductions. The point of the tax credit is to offset the cost of raising children for separated parents. I propose three changes to make the credit work much better. The first of these is amendment No. 40, which proposes to reduce the qualifying period from 100 to 50 days. Greater care is needed in respect of children who are in college. This goes to the point that Deputies Doherty and Boyd Barrett made about mothers and fathers being out of the country. It is a matter of opinion whether the qualifying period should be 100 or 50 days. The lower figure is reasonable for a person who resides with a child for ten full weeks in a year and works abroad or whatever for the rest of they year. The requirement of 100 days in residence is excessive.

The second change I propose relates to the permission required. As Deputy O'Donnell noted, in the case of an acrimonious break-up where the main carer does not use the tax credit, he or she may, for whatever reason, refuse to relinquish the credit. I propose a win-win scenario where such circumstances apply. I would like couples to be able to use the tax credit as they see fit. Not only should the person who is not living with the children be able to avail of the credit where it has not been used by the primary carer, but the value of the credit should be up to the full amount, even in cases where the primary carer is claiming it off a lower tax base and irrespective of whether he or she chooses to relinquish it. The win-win scenario would be if we were to link this option to the payment of maintenance. Some parents do not pay the amount of maintenance they should pay. I ask the Minister to consider providing on Report Stage that the credit could be used without the permission of the main carer. If, however, the secondary carer is not providing maintenance, a case could be made for refusing the credit.

The third opportunity for improving the system relates to subsection (5), which provides that the credit applies to only one child. If we return to principles on this, the point of tax deductible provisions is to offset the costs of raising a child for separated parents. I have two children and the cost to my family is much higher than if we had one child. There is obviously a link between the number of children one has and the costs involved, as we see in the case of child benefit. I ask the Minister to review subsection (5) on the basis that having two or more children staying with one for 50 or 100 days is much more expensive than having one child staying with one. Perhaps a case could be made for a phased tax deductible which may diminish as the number of children rises and would not only be for one child.