Michael McGrath (Cork South Central, Fianna Fail)
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224. To ask the Minister for Finance if he is aware of the difficulties caused to parents from changes to the single person child carer credit; if he will review the rules governing the one-parent family tax credit where the primary carer is not claiming the benefit of the credit in full; and if he will make a statement on the matter. [10641/16]

Michael Noonan (Limerick City, Fine Gael)
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As the Deputy will be aware, the One-Parent Family Tax Credit (OPFTC) was replaced with a new Single Person Child Carer Credit (SPCCC) from 1 January 2014.

I recall that during the course of the debate on Report Stage of Finance Bill 2014, the Deputy tabled an amendment proposing to extend the transferability of all or part of the Single Person Child Carer Credit (SPCCC) to the non-principal carer parent where it has not been utilised in full by the principal carer.

As a result of the Deputy's proposed amendment, I agreed to review the SPCCC in the light of his proposal. The full text of this review was included in the Report on Taxation Expenditures, published on Budget day, which can be accessed online at:

.

The review undertaken comprised of:

- A review of the rationale for the replacement of the One-Parent Family Tax Credit with the Single Person Child Carer Credit.

- An outline of proposals relating to the transfer of any unused part of the SPCCC to the non-principal carer parent.

- Consideration of relevant legal issues.

- Consideration of relevant administrative, operational and data protection issues, and,

- Consideration of relevant budgetary implications.

This review identified that a transferable credit could only be effectively administered by Revenue with the full co-operation of the primary claimant, as it would require the primary claimant to file a tax return, provide information on the other parent (or secondary claimant) and consent to the release of personal information to the other parent (or secondary claimant).

I would point out that tax credits and bands are designed to be set against the taxable income of an individual in order to reduce his or her income tax liability. This does not necessarily mean that any given tax credit or rate band will be utilised in full, as the maximum relief available is that which would reduce the income tax liability to nil or the rate of tax chargeable to 20% in the case of standard rate bands. For example, an individual could be in receipt of the PAYE tax credit and have a level of income not sufficient to fully utilise this credit. As the SPCCC can currently be transferred in full to a qualifying secondary claimant in certain cases, I am satisfied that there is an appropriate level of transferability to secondary claimants, taking into account the various issues identified in the published review.