Mattie McGrath (Tipperary, Independent)
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177. To ask the Minister for Finance the reason a person (details supplied) is now paying almost double the amount of tax that they were paying before their spouse's death; his views on whether the living alone allowance does not adequately compensate for the loss of a second income; if the tax credits for widows and widowers will be reviewed to ensure that they are not charged more tax on income following the death of a partner; and if he will make a statement on the matter. [34525/16]

Michael Noonan (Limerick City, Fine Gael)
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I am advised by Revenue that without knowing the full circumstances of the particular taxpayer it is not possible to comment specifically on the case raised by the Deputy. However I can provide the following general information with regard to the taxation of widowed persons in the year of bereavement, and in subsequent years.

In regard to the tax year in which a spouse has died, the allocation of standard rate bands and personal credits varies depending on how the couple were assessed to tax.

In the case of a couple assessed on the basis of joint assessment where the deceased individual was not the "assessable spouse" (i.e. the spouse responsible for making a joint return on behalf of the couple), the assessable spouse will continue to be entitled to married persons' tax credits and rate bands until the end of that year.

Where the deceased individual was the "assessable spouse", the surviving spouse is taxed on a joint assessed basis for the period to the date of death, and for the balance of the tax year the surviving spouse is taxed as a single person but with an increased personal tax credit of €3,300 (equivalent to the married tax credit) in respect of that period.

Where the spouses were assessed on the basis of separate treatment (i.e., taxed as single individuals) the surviving spouse is entitled to the increased personal tax credit of €3,300 in respect the year of death. 

In subsequent years, a person whose spouse has died will be entitled to the widowed person's tax credit of €2,190 if there are no dependent children. If there are dependent children the surviving spouse will be entitled to the single personal tax credit of €1,650 and the single person child carer tax credit of €1,650, and a widowed parent tax credit is also available for the five years following the year of bereavement. This credit tapers out over the five years and the current rates are: €3,600 in year one (the first year following bereavement), €3,150 in year two, €2,700 in year three, €2,250 in year four, and €1,800 in year five.

It is also worth noting that, following the death of a spouse, the surviving spouse may have an entitlement to a widow or widower's pension from the Department of Social Protection. As the Department of Social Protection do not operate PAYE, an individual's tax credits may be reduced in order to collect the tax due in respect of this payment. This could lead to an increase in the individual's tax deductions from other income sources in the period after the death of his or her spouse, as a result of the additional gross income received. 

If the individual in question wishes to clarify any aspect of their tax treatment he or she should submit their details to their local Revenue district who will advise them of the position.

Details of the taxation of bereaved persons can also be found in Revenue leaflet IT40 available at www.revenue.ie