Richard Bruton (Dublin North Central, Fine Gael)
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Question 366: To ask the Minister for Finance if his attention has been drawn to the unfair tax treatment of unmarried couples in the event that one gives up work to look after their children; if he will introduce an extra tax allowance in the tax code in order that couples that present evidence to the Revenue Commissioners that they are living together and rearing children will receive the benefit of extra tax credits and the higher standard rate cut off point. [28604/05]

Brian Cowen (Laois-Offaly, Fianna Fail)
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Generally speaking, the tax system treats members of cohabiting couples as separate and unconnected individuals. Each partner is a separate entity for tax purposes and credits, and bands and reliefs cannot be transferred from one partner to the other. There are no special favourable tax arrangements for cohabiting couples with dependent children.

The working group examining the treatment of married, cohabiting and one-parent families under the tax and social welfare codes, which reported in August 1999, was sympathetic, in principle, to changes in the tax legislation to address the issues raised relating to cohabiting couples and reported that the options it set out should be considered further. However, it acknowledged in relation to the tax treatment of cohabiting couples that a key issue is whether tax law should proceed ahead of changes in the general law.

The Law Reform Commission published a consultation paper on the rights and duties of cohabitees in April 2004. That paper indicated that in the light of the current policy with regard to individualisation of the tax bands, the commission was not recommending any change to the income tax treatment of cohabiting couples.

Child benefit is the main instrument through which support is provided to parents in respect of qualifying children and this is available whether the parents are single, cohabiting or married. The Government has substantially increased child benefit since coming into office in 1997. Overall expenditure on child benefit has increased by 279% from €506 million in 1997 to an estimated €1.916 billion in 2005. At the same time, I have indicated to the House previously that I believe there is a need to examine pragmatically and practically what can be done in regard to providing child care support to parents.

I have also put on the record of the House that I would view as problematic and unwise a situation where changes in the tax code relating to the treatment of couples would set a headline in advance of developments in other relevant areas of public policy, for example, in the area of legal recognition of relationships other than married relationships. I am still of that view.