Finian McGrath (Dublin North Central, Independent)
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194. To ask the Minister for Finance the reason the single person child carer credit does not apply to the child and a child living with their parent who is in a cohabitation position is exempt from this tax credit (details supplied); and if he will make a statement on the matter. [33087/14]

Michael 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 the Single Person Child Carer Credit from 1 January 2014.   However, the reformed credit is more targeted in that it is, in the first instance, only available to the primary 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. 

The Commission on Taxation acknowledged that the previous 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 primary carer only. The restructuring of the credit achieves such an outcome.

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.

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.