Michael Noonan (Limerick City, Fine Gael) | Oireachtas source

As the Deputy will be aware, the single person child care credit is, in the first instance, only available to the primary carer of the child. In circumstances where the primary carer cannot utilise the credit - for example, because of insufficient taxable income - the primary carer may relinquish the credit and a secondary claimant may claim it. However, the requirement for a primary claimant to relinquish the credit before a claim from a secondary claimant can be considered is necessary, as in the first instance, only one credit is available in respect of a qualifying child or children.

There are many reasons that a primary carer may not wish to relinquish the credit. Only that person can gauge whether their income would be of a sufficient amount over the course of a tax year to be able to utilise the credit. An individual may wish to retain the credit in the expectation that he or she may find employment during the year, for example. In addition, taxpayers are entitled to review their tax affairs over a four-year look back period and, depending on circumstances, an individual might wish to retain the credit in order to offset any tax liability that might arise as a result of a review of their income tax liabilities in any of the years concerned.

I have considered the possible automatic transfer of the credit in cases where a primary carer refuses to relinquish it. However, there are many reasons that this would not be feasible, including logistical, data protection and constitutional concerns.

As regards tax relief for maintenance payments and other costs incurred by separated parents, the position is that maintenance payments in respect of children are not taxable in the hands of the children or the receiving spouse. The effect of this is that the payments are treated in the same way as if the taxpayer was providing for the child out of his or her after tax income. This is in line with the tax treatment of all other parents, where the cost of maintaining their children is not tax deductible.

The Revenue Commissioners inform me that, as of October 2014, there were 86,368 primary claimants and 2,903 secondary claimants of the single person child care credit which suggests to me that the tax credit in its current form is working as intended and I have no plans to change it at this time.

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