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.

Where a payment made under a maintenance arrangement is for the benefit of a child, section 1025 TCA 1997 specifically provides that there is no tax relief available for the paying spouse. The reason for this treatment is that maintenance payments in respect of children are treated the same way as if the taxpayer was providing for the child or children out of their after-tax income, which is in line with the tax treatment for all other parents, where the cost of maintaining their child or children is not tax deductible.

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.

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 them for the whole or greater part of the year of assessment.

The credit is granted in the first instance to the primary claimant who may, if they wish, relinquish it for the year of assessment to a secondary claimant.

I am advised by Revenue that a ‘primary claimant’ is the individual who proves that a qualifying child resides with them for the greater part of the year of assessment (i.e., a period greater than six months). The qualifying child must be maintained by that individual at their own expense for the whole or greater part of the tax year. If an individual does not have majority custody of a qualifying child for the greater part of the year of assessment, they will not be the primary claimant. In circumstances where a child might reside equally with each parent under a joint custody order, the primary claimant is the parent in receipt of child benefit from the Department of Social Protection. This is specifically provided for in section 462B(2)(a).

A claimant is only entitled to one SPCCC, regardless of the number of qualifying children residing with them and the SPCCC cannot be split between two claimants.

Further details on the SPCCC can be found 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.pdf

It is the case that all tax measures are kept under review and any proposals for new tax measures or adjustments to current measures are normally considered by the Minister for Finance in the context of the annual Budget and Finance Bill process, having due regard to available resources, competing demands and the equitable treatment of all taxpayers.

However, I do not currently have plans to adjust the tax treatment of maintenance payments or the qualifying criteria for the SPCCC, or to introduce tax reliefs, credits, or allowances in the manner suggested by the Deputy.