Michael Healy-Rae (Kerry South, Independent)
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34. To ask the Minister for Finance his views on correspondence (details supplied) regarding the abolition of tax credits for single parents; and if he will make a statement on the matter. [17114/14]

Michael Noonan (Limerick City, Fine Gael)
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I would like to assure the Deputy that tax credits for single parents have not been abolished. However, the One-Parent Family Tax Credit has been restructured and replaced with a new Single Person Child Carer Credit from 1 January 2014. The new credit is more targeted, in that it is in the first instance, only 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.

There is no specific tax credit for children in the tax code. Therefore, married or cohabiting couples are unable to avail of any additional credit to assist them in the financial maintenance of their children.  In certain cases, such couples also need to maintain two households due to the location of employment, for example.

It is the responsibility of the parents to look after a child, including financially.  The new credit is targeted to assist principal child carers to take up, or remain in employment.

Notwithstanding the above, as a result of an amendment which I brought forward 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.

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). 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.

The maximum potential loss to an individual who is not entitled to the restructured credit, and who has income greatly in excess of the average industrial wage, is €48 per week. For someone on the average industrial wage, estimated at €32,450, the loss would be approximately €31 per week.

Given that this measure was only approved by the Oireachtas and enacted in Finance (No. 2) Act 2013 in late December, I have no immediate plans to review the legislation.