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Dáil Reply: 4,000 parents drawn into tax net as a result of Budget changes for separated parents

4,000 parents drawn into tax net as a result of Budget changes for separated parents

– A further 5,500 extra people will now pay tax at the higher rate from the same set of measures

A reply to a Dáil question provided to me yesterday evening shows the true extent of the impact of the tax changes affecting separated parents.

3,980 people previously outside the income tax net will now be brought into it arising from the decision to abolish the One Parent Family Tax credit, worth €1,650. A further 5,550 parents will now pay tax at the higher rate because the measures also include a change to income tax bands for single parents. In total 15,400 parents will pay higher income tax as a result of the changes.

Indeed some people on very low incomes, at or just above the minimum wage, are being asked by Michael Noonan, to pay extra income tax purely on the basis of being a separated parent. What concept of fairness is the Government working to? How on earth is it justifiable for one section of Irish society to suffer a loss of over €2,000 while others far better able to afford extra tax are protected?

 

DÁIL QUESTION

 

NO  243 and 244


To ask the Minister for Finance his estimate of the number of persons that would be brought into the income tax net if his proposal to abolish the one parent family tax credit is approved by Dáil Éireann; and the number in each income category starting at an annual income of €16,000 and at intervals of €2,000..

– Róisín Shortall.

*    For WRITTEN answer on Tuesday, 5th November, 2013.

Ref No: 47107/13

To ask the Minister for Finance his estimate of the number of persons that would be brought into the higher band of income tax if his proposals in relation to the tax treatment of separated parents are approved by Dáil Éireann..

– Róisín Shortall.

*    For WRITTEN answer on Tuesday, 5th November, 2013.

Ref No: 47108/13

REPLY

Minister for Finance ( Mr Noonan) :

I propose to take question numbers 243 and 244 together.

I am advised by the Revenue Commissioners that based on the most up to date data it is estimated that up to 15,400 individuals may be affected by the restriction of the restructured credit to the principal carer.  In addition, it is tentatively estimated that about 5,550 of the estimated 15,400 individuals affected will now become liable to the higher rate of income tax i.e. 41% on a portion of their income, while a further 3,980 are expected to be brought in to the income tax net, i.e. liable to pay income tax at standard rate of tax on a portion of their income as a result of this measure. However, ultimately it will depend on the circumstances of each individual carer.

I am also informed by the Revenue Commissioners that as the individuals who are likely to be affected by the Budget changes are not specifically identifiable on Revenue tax records the statistical basis for measuring the impact of the changes was an estimate of aggregated numbers which were not income specific. Accordingly, there is no basis on which a precise distribution of these individuals by income range could be compiled.