Kevin O'Keeffe (Cork East, Fianna Fail)
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119. To ask the Minister for Finance if consideration will be given to including the skill of hurley making in section 195 of the Taxes Consolidation Act 1997 to enable the Revenue Commissioners exempt this skill from payment of income tax (details supplied). [2516/19]

Paschal Donohoe (Dublin Central, Fine Gael)
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Section 195 of the Taxes Consolidation Act 1997 provides for the exemption of certain earnings of writers, composers and artists and allows the Revenue Commissioners to make determinations in respect of artistic works in the following categories only:

1. a book or other writing

2. a play

3. a musical composition

4. a painting or other like picture

5. a sculpture

Guidelines were drawn up by the Arts Council and the then Minister for Arts, Heritage and the Gaeltacht, for determining whether a work which falls within the scope of the activities listed in the section is an original and creative work and whether it has, or is generally recognised as having, cultural or artistic merit and consequentially can qualify for the exemption.

As identified by the Minister for Finance, Mr. Charles Haughey TD, in his budget speech in 1969, the policy basis of the artists’ exemption is to provide "further encouragement to the creative artists in our midst and to help create a sympathetic environment here in which the arts can flourish".

In light of this policy intent, I do not consider it appropriate to extend the exemption as proposed by the Deputy, as the activity described does not fall into the realm of artistic endeavor.

Paschal Donohoe (Dublin Central, Fine Gael)
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I propose to take Questions Nos. 120 and 121 together.

The Irish Income Tax code has many favourable provisions relating to the tax treatment of widowed persons and, in particular, widowed parents.

In the year of bereavement, a widowed person is entitled to the same personal tax credits as a married couple.  A widowed parent tax credit is then available to a widowed person with dependent children for the five years following the year of bereavement.  This credit tapers out over the five years and amounts to €3,600 in year one, €3,150 in year two, €2,700 in year three, €2,250 in year four, €1,800 in year five. This credit was introduced in 1991 specifically to assist such parents in the transition from married to widowed status.  The estimated cost of maintaining the relief at €3,600 for five years is of the order of €1.7m. This is based on 2016 data and assumes the number of claims for this credit will remain static at 2016 levels. It also does not take account of future economic growth, or the resulting change in income levels, which would have an effect on the taxable income and as a result the ability of taxpayers to fully absorb the credit.

In relation to the estimated cost of extending the relief to ten years, at the current tapering rate of €450 per year there would only be 3 additional years before the credit is reduced to zero (€1350 in year 6, €900 in year 7, €450 in year 8). The cost of extending the relief to include the 3 additional years is estimated to be of the order of €5m which would be fully materialised after a period of 3 years, again assuming the number of claims for this credit will remain static at 2016 levels and it also does not take account of future economic growth, or the resulting change in income levels, which would have an effect on the taxable income and as a result the ability of taxpayers to fully absorb the credit.

However, both during and after this five-year period a widowed person with dependent children is also entitled to claim the Single Person Child Carer Credit (SPCCC), in addition to the single personal credit. This ensures that their basic personal credits, before taking into account the additional widowed parent credit, will be equivalent to those granted to a married couple while he or she continues to have dependent children.

Widowed parents who qualify for the SPCCC are also entitled to an increased standard rate band of €39,300. This compares favourably with the single person’s tax band of €35,300 currently. This ensures that in 2019 a widowed parent will not be subject to the higher rate of income tax until their taxable income exceeds €39,300. 

Furthermore, widowed persons without dependent children, who therefore do not qualify for the SPCCC or the widowed parent credit, are entitled to the widowed person tax credit of €540 per year in addition to the normal tax credits for a single person. 

It should also be noted that widowed persons who are in receipt of the social welfare non-contributory widow’s pension are not liable to the Universal Social Charge on that payment.

I am satisfied that the significant provisions currently in place relating to the tax treatment of widows and widowed parents are targeting limited resources to where they are most needed.