Seymour Crawford (Cavan-Monaghan, Fine Gael)
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Question 246: To ask the Minister for Finance his views on treating partners (details supplied) in County Monaghan who are looking after their children in the same way for tax purposes as they are for social welfare; but they are not considered as a connection to their spouse for tax purposes; if he will justify the situation; and if he will make a statement on the matter. [4367/07]

Brian Cowen (Laois-Offaly, Fianna Fail)
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The position is that there are no special income tax reliefs for unmarried couples living together. In this context, tax law follows the general law relating to marriage. Generally speaking, the basis for the current taxation of married couples derives from the Supreme Court decision in Murphy vs the Attorney General (1980) which held that it was contrary to the Constitution for a married couple to pay more tax than two single people living together. The tax treatment of unmarried couples who cohabit was unaffected by the Murphy Judgement. Each partner is taxed as a single person and each is entitled to the tax credits and standard rate band appropriate to single persons. There are no special tax arrangements for cohabiting couples with dependent children.

The treatment of married and cohabiting couples under the social welfare code is primarily a matter for the Minister for Social and Family Affairs. However, I should point out to the Deputy that in the Hyland case in 1989 the Supreme Court held that it was unconstitutional for the relevant social welfare provisions to treat a married couple living together less favourably than an (unmarried) cohabiting couple. Broadly speaking, this judgement has been put into effect by treating cohabiting couples in the same way as married couples for social welfare purposes.

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 to 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.