John Cregan (Limerick West, Fianna Fail)
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Question 55: To ask the Tánaiste and Minister for Finance the situation in relation to tax individualisation and particularly for parents with children with severe or ongoing medical conditions; and if the tax system will be made more family friendly for parents who out of necessity have to parent at home due to the medical condition of their child. [19464/07]

Brian Cowen (Laois-Offaly, Fianna Fail)
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I assume that what the Deputy has in mind are circumstances where one parent in a married couple gives up work to care for a child with a severe or on going medical condition. This cannot be seen from a tax point of view in isolation. While a couple in such circumstances may lose entitlement to the employee credit of €1,760 per annum (where the spouse who has given up work was in PAYE employment), they may gain entitlement to the home carer tax credit of €770 per annum. In addition, as the Deputy will be aware, there are a range of other services and supports available from the Health Service Executive to which families or individuals with particular medical conditions and needs may be entitled. These measures, details of which are available from the Executive, can provide real and substantial assistance to families in particular circumstances. Also, entitlement to the married tax credit of €3,520 per annum, which is double the value of the single basic personal tax credit, would continue to apply. The incapacitated child tax credit of €3,000 per annum, where it applies, would continue to be available. Similarly, entitlement to medical expenses relief to the extent that it applied would be unaffected.

Where a couple decide to employ a carer to assist with the child's care needs, the couple may benefit from the support provided by the "employed person taking care of an incapacitated individual allowance". The amount which may be claimed as a deduction under this provision is the lesser of (a) the amount ultimately borne by the taxpayer in the year of assessment in employing the employed person, or (b) €50,000. In the event that a couple chooses this approach, the incapacitated child tax credit would not apply but entitlement to medical expenses relief, to the extent that it applied, would be unaffected.