Michael McGrath (Cork South Central, Fianna Fail) | Oireachtas source

I move amendment No. 6:

In page 16, between lines 38 and 39, to insert the following:

“Amendment of section 462B of Principal Act (personal allowances and reliefs)

12. Section 462B of the Principal Act is amended by inserting the following new subsection (2A) after subsection (2)—

“(2A) Where the primary carer has insufficient income to avail in full of the single person childcare credit the other parent may avail of the full or unused amount of the credit, on condition that the other parent has met any court ordered maintenance payments.”.”.

One of the most controversial elements of budget 2014 was the abolition of the one-parent family tax credit and its replacement with a new single person child care credit which could only be claimed by one of the parents. That resulted in a loss of income for some single parents of up to €2,500 - €1,650 in respect of the actual tax credit and a further €800 or so in respect of the loss of the additional band at the low rate of which they had been availing. That was up to €2,500 net income - most people would have to earn up to €5,000 gross to earn that amount.

An issue has arisen since then. One parent is not allowed to transfer any unused or unclaimed credit to the other parent in the event that the primary carer does not have a sufficient tax liability to absorb the tax credit in full. If that person wishes and is willing to transfer the remainder of that tax credit to the secondary carer, he or she is unable to do so. If the primary carer is not in a position to use any of the tax credit, he or she can sign a Revenue form and transfer the entitlement to the €1,650 credit to the secondary carer in full, but that requires that person's consent and there are a number of conditions that need to be fulfilled in order for that to happen.

I am proposing that if the primary carer has a tax liability but not a sufficient tax liability to use the tax credit in full, he or she should be permitted with his or her consent to transfer the unused credit to the secondary carer so that this person could reduce his or her tax bill accordingly.

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