Jillian van Turnhout (Independent) | Oireachtas source

I thank the Minister of State for coming to the House and comprehensively outlining for us what is in the Finance Bill.

I join others in welcoming measures such as the travel tax and the home renovation incentive but I will spend my time on the matters with which I have issues, which are section 7, obviously, and Part 3 on VAT where other matters could have been addressed but were not and I would like to take this opportunity to raise them with the Minister of State.

Section 7 deals with the single person child carer credit, introduced by the Finance Bill to replace the one parent family tax credit which will be abolished. I have great difficulty with section 7 because it will impact on separated, divorced, unmarried and single parents. I welcome the proposal made by Senator O'Brien. I would prefer if we were not doing this at present but if we must do it let us find a fairer way to do so.

In addressing this issue I will adopt terminology to reflect that in the vast majority of cases - I do not say in all cases - the resident primary carer will be the mother and the non-resident co-parent will be the father. The Bill refers to the non-resident co-parent as the secondary claimant, which makes it sound as though one parent is secondary to the other. The Bill makes efforts to make arrangements for the non-resident co-parent to be able to avail in whole or in part of the single person child care tax credit where the primary carer is not using it. I welcome the fact that as the Bill went through the Dáil the Minister made amendments but they exacerbate the problem. I urge the Minister of State to reconsider the criteria set out in section 7(2)(b) whereby it must be proved the child or children spend a minimum of 100 days with the non-resident co-parent in each given year. This is excessive and unnecessary, and arguably it is unworkable particularly for unmarried fathers.

Before I address the practical issues I must state I believe there are flawed concepts. We should act the best interests of the child and Article 3.1 of the UN Convention on the Rights of the Child states in all actions concerning children, whether undertaken by public or private social welfare institutions, courts of law, administrative authorities or legislative bodies, the best interests of the child shall be a primary consideration. The 100 day requirement reinforces a negative stereotype of single fathers in particular, implying they must be cajoled into participating in their child's life to avail of a tax credit which can be significant for some fathers in terms of income. Fathers will lose an estimated €215 per month which is €2,500 annually. I have met groups such as Treoir and individuals affected by this and it has been suggested to me some single fathers are already under so much financial strain they are considering giving up work to relieve themselves of their maintenance payments. I wonder whether this is a labour activation measure. It ought not to act as a further disincentive to fathers working. The majority of fathers do not have to be incentivised to partake in caring for and bringing up their children. Despite the breakdown of relationships the majority of parents come to consensual arrangements on co-parenting their children. Sometimes this takes time in the first stretches of a separation or divorce, but over time they come to consensual arrangements. I do not see why the State is interfering in the way it purports to do. It is an overprescriptive measure and an unwarranted interference in family life. It is particularly unwelcome since the breakdown of the parental relationship is often stressful and fractious and can be subject to stops and starts with regard to reaching agreements on visitation and access arrangements. The State should be supportive of reaching consensus rather than laying down preconditions.

To go back to the practicality and feasibility of the 100 day requirement, it would mean a father would have to see the child every single weekend throughout the year to qualify for the tax credit with no room for manoeuvre. To give an example, it is unreasonable and totally undesirable to expect the mother of a newborn baby or infant to forego the care and company of her baby to the extent required. It would be especially problematic where the mother is breastfeeding. If a child is ill, perhaps in hospital for a period of time, he or she will not be able to travel or stay overnight. Where parents live a considerable distance from one another a weekly arrangement will not be financially viable. Children have events at weekends such as dance recitals and sports matches, of which I know the Minister of State is more than well aware, which can also impinge on this. The work hours of either parents might change or the relationship between the parents might temporarily break down. In some cases teenage children will want to determine their own activities and what they do, but they will be told they must see their father for taxation reasons. The State needs to be very careful about involving itself in family life. We could all come up with many more problems with the 100 day rule. Who will monitor it? Who will police it?

There are situations where the State gets involved in family life to ensure children's welfare and protection but this is not one of them. It is wholly inappropriate for the State to interfere with parents consensual child-rearing arrangements in this way. I would prefer if section 7 were not in the Bill. I support the outline of the amendment proposed by Fianna Fáil but I would have to see the wording of it. Perhaps the Minister could look to replace the 100 day requirement with a situation where it is possible the secondary claimant could avail of the single person child carer credit through a transfer at the request of the primary carer if the parents consensually agree. Alternatively a request from the primary carer could be accompanied by a self-assessment from the primary carer that the non-resident co-parent is deserving of the tax credit, under a principle already established by Revenue for the local property tax. There are other ways we could do this, but the 100 day rule is problematic and not workable. It is the State interfering in family life. I urge the State to conduct an impact analysis on how the issues I have outlined will be dealt with prior to commencing this part. Perhaps we can amend it before it finishes its time in the House.

I wish to raise a number of issues with regard to VAT. We are trying to encourage small businesses online but many of them tell me the fact non-Irish Internet companies can make €35,000 before the VAT regulations dictate they must declare it is hugely problematic. It is also not fair, particularly when one examines the EU directive on VAT groupings. We need to examine this issue to allow Irish companies compete on a fair playing field.

The Irish Heart Foundation has raised the issue of VAT being charged on defibrillators and such devices and on advertising campaigns. The Irish Heart Foundation runs an annual campaign on stroke awareness and one can demonstrate the savings this awareness makes for the State. This is a service on behalf of the State and the Irish Heart Foundation works with the Department of Health on it. It must pay VAT and cannot reclaim it even though there is a direct cost benefit. There is no incentive for it to run such campaigns although we can see a direct cost saving. I do not want to hear an answer about the EU because the UK has found a way around it. The UK is able to allow charities in certain areas to reclaim VAT on advertising or goods where certain criteria are set down.

Prior to the budget I wrote to the Minister, Deputy Noonan, on mobile phone donations to charities. At present mobile phone operators have a problem with their billing system whereby they can only bill people at one VAT rate. One would think it would be simple to introduce a second VAT rate but it cannot be done. We saw the success of the fundraiser on "The Late Late Show" with Majella O'Donnell who shaved her head for the Irish Cancer Society. VAT was charged on all the text messages. The Revenue Commissioners state there does not have to be VAT on them. It should be possible to reclaim it but the mobile phone company would have to go to each individual to ask him or her to reclaim the VAT. Will the Minister make a ruling that VAT charged on text donations is not allowable for the reclaiming of VAT? The mobile phone companies would then have to hand over all of the VAT claimed. At present mobile phone companies have a fund which is donated.

In the Majella O'Donnell case the fund surpassed itself. We want to encourage people to donate and I shall forward my proposal to the Minister of State. I want to use this opportunity to draw attention to the fact that there are other ways to give back to society. I thank the Acting Chairman for his latitude in the debate.