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Sadhbh McElveen (Letters 2 Feb) is correct in saying that there is discrimination in the taxation of maintenance payments.
I run a financial advice service in my local citizens advice centre for those of limited means who cannot afford accountants. I only became aware of this discrimination in recent months when a woman who had endured a violent marriage came for advice about any taxation implications regarding the maintenance just awarded to her by a Court.
I checked the position and was horrified to see that on her €300 pw she would be liable for approx €,2400 pa in deductions in income tax, PRSI and USC for 2015.
My client burst into tears and said it had to be wrong; I felt like crying too. It is morally wrong but correct under current tax law.
The problem with the Irish tax system is that it discriminates on the source of the income when only the amount of income should be relevant.
In the 2016 budget the government introduced a €550 ‘earned income’ tax credit which applies to most self employed people.
This reduced the tax discrimination against the self employed but did not apply to those receiving maintenance payments.
Discrimination on the source of income needs to be legally challenged. Those trying to live on modest and over taxed maintenance payments do not have the money to do this.
Enid O’Dowd FCA
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