Noel Harrington (Cork South West, Fine Gael)
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138. To ask the Minister for Finance if he will amend the regulations regarding the single parent tax credit for 2014 so that by agreement it can be split between the parents on a 75%-25% or a 50%-50% basis or that it can claimed be by both parents on alternate years; and if he will make a statement on the matter. [52854/13]

Michael Noonan (Limerick City, Fine Gael)
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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 proposed new credit, should the changes be approved by the Oireachtas, will operate differently from the One-Parent Family Credit, such that the credit will be available in the first instance, to the primary carer, that is, the single individual with whom the child resides for the greater part of the year. In addition I introduced an amendment at Committee Stage in the Dáil to allow the primary carer to relinquish the credit such that a non-primary carer can claim it in certain circumstances.

If the primary claimant relinquishes the credit, a secondary claimant may claim it. The child must reside with this individual for over 100 days in aggregate in the year, which is indicative of a level of involvement in the care of the child that is supportive of the primary claimant. For the purpose of this limit a day can include the greater part of a day.

The new credit will be an activation measure and it is designed to be an in-work benefit to support the primary carer to take up, or remain in, employment. It will assist single parents or carers with the cost of childcare. Where a primary carer chooses to relinquish the credit, it will assist a non-primary carer to take up or remain in employment The purpose of relinquishment is to ensure that if the primary claimant has insufficient income or does not wish to avail of the credit, a secondary claimant with whom the child resides for over 100 days in the year may claim it in recognition of their involvement with the child and the support they provide to the primary claimant.

I am advised by the Revenue Commissioners that this procedure of relinquishment means that two individuals could, by agreement among themselves, alternate claiming the credit with the primary claimant getting it in year one, and the secondary claimant in year two, and so on.

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.

Allocation of childcare responsibilities is primarily for parents to agree. Therefore, I have no plans to amend the legislation to allow for the splitting or apportioning of the new tax credit.

This new policy has been agreed by Government based on a recommendation put forward by the Commission on Taxation that the credit should be retained but that it should be confined to the principal carer only. I am satisfied that the restructuring of the credit will achieve such an outcome.