Michael D'Arcy (Wexford, Fine Gael)
Link to this: Individually | In context | Oireachtas source

85. To ask the Minister for Finance the current threshold for a tax free award from an employer to an employee under the Revenue small benefits exemption scheme; his plans to change the threshold; and if he will make a statement on the matter. [31278/16]

Michael Noonan (Limerick City, Fine Gael)
Link to this: Individually | In context | Oireachtas source

I increased the annual tax free benefit that an employer may give to an employee from €250 to €500 in last year's Finance Act. Section 112B of the Taxes Consolidation Act 1997 provides that the benefit must not exceed €500 in value, must not be in the form of cash and may not form part of any salary sacrifice arrangement between the employee and the employer. Only one such benefit may be given in any tax year. The exemption applies to benefits granted on or after 22 October 2015.

The Programme for a Partnership Government states that, working with the Oireachtas, we would increase the Small Benefits Exemption (voucher) from €500 to €650. In my Budget statement I noted that we will be true to the commitments we made in that Programme. However I also said that we will divide the resources available between increased investment in public services and tax cuts in proportions of at least two to one in favour of public services.  Therefore the Deputy will understand that not everything can be accomplished in or more years and I am not proposing to make any changes to this measure at this particular time.

Niall Collins (Limerick County, Fianna Fail)
Link to this: Individually | In context | Oireachtas source

86. To ask the Minister for Finance his views on a circumstance (details supplied); if he will rectify this situation; and if he will make a statement on the matter. [31321/16]

Michael Noonan (Limerick City, Fine Gael)
Link to this: Individually | In context | Oireachtas source

Where a couple is cohabiting, rather than married or in a civil partnership, each partner is treated for the purposes of income tax as a separate and unconnected individual. Because they are treated separately for tax purposes, credits, tax bands and reliefs cannot be transferred from one partner to the other. Cohabitants do not have the same legal rights and obligations as a married couple or couple in a civil partnership, which is why they are not accorded similar treatment to couples who have a civil status that is recognised in law.

The basis for the current tax treatment of married couples derives from the Supreme Court decision in Murphy vs. Attorney General (1980). This decision was based on Article 41.3.1 of the Constitution where the State pledges to protect the institution of marriage. The decision held that it was contrary to the Constitution for a married couple, both of whom are working, to pay more tax than two single people living together and having the same income. 

To the extent that there are differences in the tax treatment of the different categories of couples, such differences arise from the objective of dealing with different types of circumstances while at the same time respecting the constitutional requirements to protect the institution of marriage. Any change in the tax treatment of cohabiting couples can only be addressed in the broader context of future social and legal policy development in relation to such couples.

From a practical perspective, it would be very difficult to administer a regime for cohabitants which would be the same as that for married couples or civil partners. Married couples and civil partners have a verifiable official confirmation of their status. It would be difficult, intrusive and time-consuming to confirm declarations by individuals that they were actually cohabiting. It would also be difficult to establish when cohabitation started or ceased. 

There would also be legal issues with regard to 'connected persons'. To counter tax avoidance, 'connected persons' are frequently defined throughout the various Tax Acts. The definitions extend to relatives and children of spouses and civil partners. This would be very difficult to prove and enforce in respect of persons connected with a cohabiting couple where the couple has no legal recognition. There may be an advantage in tax legislation for a married couple or civil partners as regards the extended rate band and the ability to transfer credits. However, their legal status has wider consequences from a tax perspective both for themselves and persons connected with them.

The treatment of cohabiting couples for the purposes of social welfare is primarily a matter for my colleague, the Minister for Social Protection, Mr. Leo Varadkar TD. However, it is also based on the principle that married couples should not be treated less favourably than cohabiting couples. This was given a constitutional underpinning following the Supreme Court decision in Hyland v Minister for Social Welfare (1989) which ruled that it was unconstitutional for the total income a married couple received in social welfare benefits to be less than the couple would have received if they were unmarried and cohabiting.