Andrew Doyle (Wicklow, Fine Gael)
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227. To ask the Minister for Finance if the new single child carer tax credit will be transferred to a parent (details supplied) who is not the principle carer in circumstances where the principle carer is married and in work and cannot claim this credit; and if he will make a statement on the matter. [13400/14]

Michael Noonan (Limerick City, Fine Gael)
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The Deputy will be aware that the One-Parent Family Credit has been replaced with a new Single Person Child Carer Credit from 1 January 2014.   The restructured credit is of the same value i.e. €1,650 per annum as the one-parent family credit and also includes the same entitlement to the additional €4,000 extended standard rate band, which increases it to €36,800 per annum, before liability to higher rate of income tax arises.  However, the credit and the band are more targeted in that they are, in the first instance, only available to the principal carer of the child.

The person who receives the child benefit payment is being used as the initial indicator by the Revenue Commissioners to identify the individuals who are likely to qualify for the new credit.  However, the credit will in the first place go to the person who cares for the child for most of the year. Agreement as to who will be the principal carer of a child is a matter for the parents or guardians.

The Commission on Taxation acknowledged that the One-Parent Family Tax Credit played 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.

Notwithstanding the above, as a result of an amendment which I brought forward at Committee Stage of the Finance Bill, a principal 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.

It should be noted that 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), on the basis that the relevant child is not, in the main, being cared for by a single person. 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.