Catherine Murphy (Kildare North, Independent)
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Question 243: To ask the Minister for Finance if he will introduce measures to provide single parents with similar tax relief arrangements to those enjoyed by married couples in order to ensure that where both parents contribute to the upbringing of a child but are not married they may each still avail of much needed tax reliefs; and if he will make a statement on the matter. [4251/07]

Brian Cowen (Laois-Offaly, Fianna Fail)
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The position is that a lone parent, whether single, separated, divorced or widowed, may claim the one parent family tax credit if they have qualifying dependant children, and if they are not cohabiting with another person as man and wife.

The personal relief for lone parents was introduced as a tax allowance in 1979 in recognition of the circumstances where additional costs involved in child rearing in a one parent situation compared to where both parents are present.

The one parent family tax credit combined with the basic personal tax credit gives a lone parent the same value in tax relief as the married personal tax credit. In addition, entitlement to the one parent family tax credit means that the lone parent will also be entitled to the lone parent standard rate band which for 2007 will be €38,000 (€4,000 greater than the standard band for a single person).

The one parent family tax credit may also be claimed by each parent in cases where parents live separately and where the child or children resided with each parent for part of the year. The Revenue Commissioners deem this requirement to be met if the child is so resident at least one night during the year.

I am generally satisfied with the current tax treatment of lone parents.

However, as indicated above, the credit may not be claimed by either party in a cohabiting couple as this would undermine the key purpose of the relief which is to assist lone parents raising children on their own.

In relation to couples who cohabit, generally speaking the tax system treats the members of such 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 that 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.

There are a number of recent reports which will help to inform the Government's deliberations in this general area including:

the Tenth Progress Report of the Oireachtas All-Party Committee on the Constitution entitled 'The Family' which was published in early 2006;

the Options Paper presented to the Minister for Justice, Equality and Law Reform in November 2006 by the Working Group on Domestic Partnership; and

the Report of the Law Reform Commission on the rights and duties of cohabitants which was published in December 2006.

I previously 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.