Written answers

Tuesday, 28 January 2014

Department of Finance

Carer's Allowance Eligibility

Photo of Róisín ShortallRóisín Shortall (Dublin North West, Independent)
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204. To ask the Minister for Finance if steps will be taken to ensure that the single person child carer tax credit is not used as leverage in discussions between separated couples; if he will examine secondary carers becoming automatically eligible when the credit is not in use; and if he will make a statement on the matter. [4035/14]

Photo of Michael NoonanMichael Noonan (Limerick City, Fine Gael)
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As the Deputy is aware, the One-Parent Family Tax Credit (OPFTC) has been replaced with a new Single Person Child Carer Tax Credit from 1 January 2014. However, the credit will be more targeted, in that it will in the first instance, only be available to the principal carer of the child.

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 or children is unsustainable. 

As regards the potential of this change to interfere with the level of maintenance payments, if such reasoning were to be applied, then any general tax increase, as a result of an adjustment in tax credits, rates or bands could lead to similar situations. Ultimately, maintenance payments are a matter for parents and if necessary, the courts to decide. It is not possible, and indeed would not be appropriate, for the tax code to take account of every possible variable.

Notwithstanding this, as a result on an amendment I brought at Committee stage of the Finance Bill, a primary carer who is entitled to the credit and who does not wish to avail of it can choose to surrender it.  A secondary carer may then make a claim for the credit, provided that the qualifying child resides with him or her for not less than 100 days in the tax year. However, where a primary carer is married, in a civil partnership or cohabiting they would not be entitled to the new credit (or indeed the former one). In such circumstances the primary carer cannot relinquish the credit to a secondary carer. In addition, a secondary carer who is married, in a civil partnership or cohabiting, would not be entitled to the new credit (or indeed the former one) regardless of the marital status of the primary carer.

Given the above and the requirement for the Revenue Commissioners to maintain confidentiality in relation to the personal information of taxpayers, it would not be possible to automatically assess entitlement and transfer of the new credit to a secondary carer.

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