are we better off married tax wise ?

M

moneywizard

Guest
One person, a single parent mortgage holder, works full time and earns 46,000 euro per year. The other person (who is renting a flat) receives disability of 186 euro per week plus an income of 166.40 euro per week from a part time job which is rehabilitaive in nature. (You are allowed to earn 120 euro per week and receive the disability if your doctor agrees that the work is rehabilitative).

In this case the person earns 166.40 euro and the extra 46.40 euro has been deducted from the disability payment.

What we want to know is if these people get married are they better off tax wise than if they are not married. The 2nd person would lose their disability payment but would the tax benefits bring in a better total income than if these people didn't marry ?
 
If you live together after you get married you will save on the flat rental (as opposed to living separately as you are now - hence renting the flat)
 
A married person enjoys a slightly higher SRCOP than a single-parent (€45400 v €40400), hence pays a lower amount of tax than the single parent.
This amounts to a 'married advantage' of €1050 per annum (€5000 @ (41%-20%)). Additionally, as DB74 noted, you'll also save the rent of the flat, so that would be added to the €1050.

If the person in receipt of disability would definitely lose that benefit then the answer is going to depend on how much the rent saving is. You can then compare the savings above v the value of lost disability income.

I have uploaded an Excel 2007 tax calculator [currently in beta and it won't work in Excel 2003] which might help you evaluate this query (but 'caveat emptor'- it mightn't give the 100% correct answer so if in doubt, get professional advice). If interested, it can be downloaded here:

http://taxcalc.eu/monthlyss/dlf/beta calculator.htm
 
The person on disability's PAYE credit will cover the PAYE on their job which menas their single credit will be transferable which is an additional saving of €1,830 BUT the lone parent will lose their single-parent credit of €1,830 so that has a NIL effect overall.
 
Correct - so to clarify, the higher earner will still come out with annual tax credits of €5490 (being €3660 married and €1830 employee), the same as when treated as a single parent. The lower paid person will just have the €1830 employee credit.

However, the higher earner would have been on a maximum SRCOP of €40400 as a single parent and this will go up to €45400 if married- that's the €1,050 'married advantage' saving I referred to in my post above.
 
deadlyduck said:
A married person enjoys a slightly higher SRCOP than a single-parent (€45400 v €40400), hence pays a lower amount of tax than the single parent.
This amounts to a 'married advantage' of €1050 per annum (€5000 @ (41%-20%)). Additionally, as DB74 noted, you'll also save the rent of the flat, so that would be added to the €1050.

If the person in receipt of disability would definitely lose that benefit then the answer is going to depend on how much the rent saving is. You can then compare the savings above v the value of lost disability income.

I have uploaded an Excel 2007 tax calculator [currently in beta and it won't work in Excel 2003] which might help you evaluate this query (but 'caveat emptor'- it mightn't give the 100% correct answer so if in doubt, get professional advice). If interested, it can be downloaded here:

http://taxcalc.eu/monthlyss/dlf/beta calculator.htm
Click to expand...

I have downloaded this and unzipped the contents. How do you run it though?
 
I have downloaded this and unzipped the contents. How do you run it though?
Click to expand...

You must be using Internet Explorer- it sometimes does this with the file.

See the instructions for saving it here

If it still doesn't work, leave a message here or PM me and I can email a copy to you.
 
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