One-parent family tax change a major blow

The Taoiseach Enda Kenny and Finance Minister Michael Noonan have publicly stated there will be no increase in income tax in 2014. They have not kept this promise as a vulnerable section of society discovered in January of this year.

Budget 2014, following a recommendation by the Commission on Taxation in 2009, replaced the ‘one parent family tax credit’ with a ‘single person child carer credit’. In the past a couple that experienced marriage breakdown were entitled to a tax credit in respect of dependent children. In practice this was awarded to both parents. Since January of this year the re-named tax credit is available to only one parent.

The tax code has, in effect, created a hierarchy in that there is now a ‘primary’ and a ‘secondary’ parent, the former receiving the tax credit, the latter not. Revenue by default allocates the new credit to the parent in receipt of child benefit who, in the majority of cases, is the mother. Only if she cannot avail of the credit for any reason is the credit transferred to the father.