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

I thank the Senators for continuing with this debate and the very good points that have been made. Senator Michael D'Arcy would like to know the costs. The Revenue Commissioners estimate that in 2013 the one-parent family tax credit will cost approximately €127 million. The Revenue Commissioners also estimate that the yield from replacing the one-parent family tax credit with the single person child carer tax credit from 1 January 2014 will be €18 million in 2014 and €25 million in a full year. I am further advised by the Revenue Commissioners that the expected yield will be reduced to €16 million in 2014 and €22.5 million in a full year as a result of the amendment to this section which I brought forward to the committee.

One person's tax credit is another person's tax liability. There are no free tax credits. Do the Senators think it is fair that all those couples with children who get no tax credit should pay extra tax to give two tax credits to the children of the people in the circumstances we have been discussing or would they agree with the advice of the Commission on Taxation that one tax credit would be more appropriate than two? I am of the view that one tax credit is more appropriate than two, but Senator Jim D'Arcy in particular - but also the public debate - made a reasonable case that if the primary carer could not avail of the tax credit it should be transferable to the other parent by arrangement or by law so the principle of one tax credit in each case would be applicable and that no family would be completely deprived of the tax credit. Senator Jim D'Arcy privately made that point very strongly to me and he was right. It improved the situation very much.

The question of the 100 days is obviously providing a difficulty to some Senators. The primary carer has the first right to the tax credit and if he or she claims it there is no transfer. In circumstances where the primary carer is not claiming it, it is transferred. To be the primary carer that person would need to have care of the child for half the year, six months. The 100 days to be the other carer is approximately half of the other six months. The reason for it, as advised by the Revenue, is to prevent multiple claims because if one had a shorter period of time one could end up with two or three further claimants, depending on how one pitches it. The Revenue Commissioners will apply their customer code to this, as they do to everything else, and will presume the honesty of the applicant. If one applicant applies for this and no other credit is being paid in respect of that situation, he or she will receive it. If there is a second claimant, they will need some test of who should get the credit. If there is a second or third claimant, somebody will have to bring forward proof of the 100 days. It is a very exceptional circumstance and I would not see it arising except in very limited cases.

This does not apply just to fathers. Fathers or mothers are not mentioned in law. This could apply equally to a grandparent or a sister's or brother's family. As originally constructed, the test was caring for the child for at least one night of the year. This is why three tax credits were frequently awarded and more than that in exceptional circumstances. The Revenue has records of this. We are making a change that has consequences for people but now that we have amended it, it is a fair change. If the 100 days causes difficulty in practice I will go back to the Houses of the Oireachtas and change it because I have been impressed by the Senators' arguments.