Written answers
Tuesday, 24 June 2025
Department of Finance
Tax Code
Aidan Farrelly (Kildare North, Social Democrats)
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314. To ask the Minister for Finance the minimum effective tax rate on individual earnings for each of the past ten years; and the level of earnings at which that minimum effective tax rate applied in each of those ten years, in tabular form. [34209/25]
Aidan Farrelly (Kildare North, Social Democrats)
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315. To ask the Minister for Finance the estimated first- and full-year yield from each percentage point increase in the minimum effective tax rate on individual earnings in 2026; and the estimated the first- and full-year yield from each €10,000 reduction in the level of earnings at which that minimum effective tax rate applies. [34210/25]
Paschal Donohoe (Dublin Central, Fine Gael)
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I propose to take Questions Nos. 314 and 315 together.
In regard to the Deputy’s questions, the structure of the Irish personal income tax system does not provide for a minimum effective tax rate and so it is not possible to perform the analysis requested. An individual will normally pay income tax, PRSI and USC on their employment income and earnings, and the rates at which they are liable to these charges is dependent on their overall level of income and their own specific circumstances.
However, the average effective tax rates for individuals at various income levels were published as part of the Budget 2025 documentation in the Tax Policy Changes document. This document includes tables that show the average effective tax rates on a range of annual earnings in respect of income tax, PRSI and USC as a proportion of gross income. This is available by various household types, including single persons, married couples with children, PAYE and self-employed income earners over a wide distribution of income levels between €15,000 and €120,000 from 2009 to 2025.
This document also includes detailed distributional analysis of the tax measures announced in Budget 2025, which demonstrate the effect of changes to some payments from the Department of Social Protection such as Child Benefit and the Working Family payment.
The document is available at the following link: assets.gov.ie/static/documents/budget-2025-tax-policy-changes.pdf.
Seán Fleming (Laois, Fianna Fail)
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316. To ask the Minister for Finance to respond to correspondence (details supplied); and if he will make a statement on the matter. [34240/25]
Paschal Donohoe (Dublin Central, Fine Gael)
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Section 1025 of the Taxes Consolidation Act (“TCA”) 1997 provides for the tax treatment of payments made under a maintenance arrangement by one party of a marriage to another, where parties to the marriage are not jointly assessed to tax.
A maintenance arrangement for the purposes of section 1025 TCA 1997, means an order of a court, rule of court, deed of separation, trust, covenant, agreement, arrangement, or any other act giving rise to a legally enforceable obligation and made or done in consideration or in consequence of:
- the dissolution or annulment of a marriage, or
- the separation of the parties to a marriage where such separation is expected to be permanent.
Voluntary maintenance payments are not legally enforceable; therefore, they are ignored when calculating either spouse’s tax liability. Where such payments are made in respect of a child, they are not taxable in the hands of the child or the receiving spouse, and there is no tax relief available to the paying spouse.
As the maintenance paid in this case is in respect of your constituent’s children, there is no tax relief available to him on such payments.
Further information on the taxation of maintenance payments can be found at the link below:Tax and Duty Manual Part 44-01-01 - Income tax treatment of married persons and civil partners: www.revenue.ie/en/tax-professionals/tdm/income-tax-capital-gains-tax-corporation-tax/part-44/44-01-01.pdf
Section 462B TCA 1997 provides for the Single Person Child Carer Tax Credit (“SPCCC”). Subject to the conditions of section 462B TCA 1997 being met, the SPCCC is available to a single person who has a qualifying child resident with him or her for the whole or greater part of the year of assessment.
Based on the limited information provided, it would appear the constituent is not entitled to claim the SPCCC as, based on the information provided, his children do not reside with him for the greater part of the year.
Further details on the SPCCC are set out in Tax and Duty Manual Part 15-01-41, which can be located at the link below:
Tax and Duty Manual Part 15-01-41 - Single Person Child Carer Credit: www.revenue.ie/en/tax-professionals/tdm/income-tax-capital-gains-tax-corporation-tax/part-15/15-01-41.pdfWith regard to the details provided, if the constituent has any further queries by reference to the facts and circumstances of the specific case, he can contact Revenue using MyEnquiries. MyEnquiries is a free and easy to use online facility available to both PAYE taxpayers, through MyAccount, and self-assessed taxpayers, using ROS.
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