Joe McHugh (Donegal North East, Fine Gael)
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Question 160: To ask the Minister for Finance if a person (details supplied) in County Donegal can change their tax credits so that their partner, who is working, can get their tax credit back due to the fact that because they are not a married couple they are not allowed to do it; and if he will make a statement on the matter. [18896/09]

Brian Lenihan Jnr (Dublin West, Fianna Fail)
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Sections 1017 to 1019 inclusive of the Taxes Consolidation Act 1997 deal with the joint assessment of married couples for a year of assessment. Persons assessed to tax under these provisions are entitled to the married person's tax credit (currently, €3,660). These provisions only apply to married couples. All other persons are assessed to tax as single persons in accordance with section 1016 of the Taxes Consolidation Act 1997. Such persons are entitled to the single person's tax credit (currently, €1,830).

The basis for the current tax treatment of married couples derives from the Supreme Court decision in Murphy v 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 and having the same income.

In the particular circumstances outlined, as the couple are cohabiting rather than married, it is not permitted under existing legislation to transfer tax credits between the individuals.