Written answers

Thursday, 28 April 2022

Photo of Aindrias MoynihanAindrias Moynihan (Cork North West, Fianna Fail)
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56. To ask the Minister for Finance the reason for different criteria under social protection entitlements and taxation in which a cohabiting couple have to be jointly assessed under social protection entitlements but cannot be jointly assessed for tax purposes as cohabitants; if a review will be considered to change this taxation rule to allow cohabiting couples to apply to be jointly assessed for tax purposes; and if he will make a statement on the matter. [21440/22]

Photo of Paschal DonohoePaschal Donohoe (Dublin Central, Fine Gael)
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Where a couple is cohabiting, rather than married or in a civil partnership, they are treated as separate and unconnected individuals for the purposes of income tax. Each partner is a separate entity for tax purposes, therefore, cohabiting couples cannot file joint assessment tax returns or share their tax credits and tax bands in the same manner as married couples.

The basis for the current tax treatment of couples derives from the Supreme Court decision in Murphy vs. Attorney General (1980), which 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.

The treatment of cohabiting couples for the purposes of social welfare is primarily a matter for the Minister for Social Protection. However, it is 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.

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. 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 tax treatment to couples who have a civil status that is recognised in law. Any change in the tax treatment of cohabiting couples can only be addressed in the broader context of social and legal policy development in relation to such couples.

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