Finian McGrath (Dublin North Central, Independent)
Link to this: Individually | In context | Oireachtas source

71. To ask the Minister for Finance if he will re-examine the unfair tax changes for lone parents (details supplied). [47511/13]

Michael Noonan (Limerick City, Fine Gael)
Link to this: Individually | In context | Oireachtas source

As the Deputy is aware, the One-Parent Family Tax Credit (OPFTC) is being replaced with a new Single Person Child Carer Tax Credit from 1 January 2014. The Single Person Child Carer Tax Credit will be of the same value, i.e. €1,650, as the existing OPFTC and will also carry the same entitlement to the extended standard rate tax band of €36,800 per annum. The new credit will be targeted such that it is available only to the primary carer of the child. A maximum of one credit will be available per single carer/claimant, regardless of whether he or she cares for more than one child. This is the same condition that applies to the current OPFTC. Given the difficult fiscal environment it is essential to review all tax reliefs, credits and incentives in order to ensure that they are properly targeted and if necessary re-focused in order that they can achieve the socio-economic objectives that are set for them. A system that allows multiple claims in respect of the same child, as can happen with the OPFTC, is unsustainable.

The Commission on Taxation acknowledged that the One-Parent Family Tax Credit plays a role in supporting and incentivising the labour market participation of single and widowed parents. However, in its recommendations it concluded that the credit should be retained but that it should be allocated to the principal carer only. The restructuring of the credit will achieve such an outcome.

Allocation of childcare responsibilities is primarily for parents to agree. However, having listened carefully to the views expressed by colleagues and Deputies, I have asked my officials to explore how the credit could be used by another individual, where the primary carer chooses not to, or cannot, claim it and accordingly I will be bringing forward an amendment at Committee Stage.