Instead, the credit will be restricted to just one parent and only the person who is the child’s principal carer.
One Family, the organisation for one-parent families, said the measure effectively halves the tax credit available to such families.
“We are extremely disappointed working parents who share caring and financial responsibility for their children after separation are now to be penalised by the removal of the One Family Tax Credit.
“We should be supporting both parents to co-operate and share responsibility for their children following relationship breakdown instead of penalising them,” said Karen Kiernan, chief executive of One Family.
Stuart Duffin, One Family director of policy and programmes, said the measure could put a further strain on relationships where parents were working hard to share the care.
“One Family works to ensure that parents do their best for their children as they move through separation and into the often challenging landscape of shared parenting.
“This cut is retrograde. It ignores the reality of the collaborative approach many people can take to sharing responsibility and penalises families who have separated,” Mr Duffin said.
One Family had been concerned for some time “by incidences of social welfare inspectors investigating families” because the parents, after separating, are sharing parenting of their children, Mr Duffin said.
The new measure, he insisted, was contrary to the ideal model of shared parenting and was likely to lead to acrimony.
The One Family Tax Credit has been available to both people sharing parenting of their children where they are not cohabiting and their child lives with them for part of the year. It was worth €1,650 per year in addition to the personal tax credit.
A spokesperson for the Department of Finance said the measure was introduced to address the type of situation where a child “only had to stay one night [of the year] with the other parent” for that parent to qualify.
Census 2011 figures show almost one in five children (18.3%) live in one-parent families. There are over 215,000 one-parent families in Ireland today and 87,586 of those are receiving the One-Parent Family Payment.
Ms Kiernan said they were alarmed at a continuing “negative approach to parents and families” by the Government.
“It costs people more money to live apart and share parenting of their children than if they were living together, and the removal of this tax credit will cause conflict in separated one-parent families,” she said.
A One-Parent Family Tax Credit is available to a single parent, or a person who has custody of and maintains a child who is living with him or her. This can include someone who is single or widowed, separated or divorced or whose civil partnership has been dissolved.