one person tax credit being restricted to principal carer

Brendan Burgess

Brendan Burgess

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recommended by the Commission on Taxation3


One-Parent Family Tax Credit is to be replaced with a new Single Person Child Carer Tax Credit from 1 January 2014. The new credit will be to the same value but will be available only to the principal carer of the child.
 
Can't believe it!! just qualified for single parent credit post divorce this year, now I will lose 31.73 per week- I can't afford this!! I hope they at least allow seperated couples to nominate which can claim this allowance for tax planning, my ex is on social welfare disability pension and will never use this credit!
 
This is a strange one, and a real kick in the teeth for single dads..

I suppose my ex can claim it for one of my kids, and ill claim it for the other..

Joint custody, and there is no primary carer in my situation.
 
Might be quite a few maintenance adjustment orders on foot of this.

It was always an anomaly and an unfair treatment of couples who parented together.
 
SarahMc said:
Might be quite a few maintenance adjustment orders on foot of this.

It was always an anomaly and an unfair treatment of couples who parented together.
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Not true. Single parents have double the costs of cohabiting parents.
 
Appears to be one of the few commission on taxation recomendations that was implemented
 
mandelbrot said:
How so? Do the children eat twice as much? Or require twice as much childcare? Or twice as much clothes? etc...
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Twice the mortgage costs, two property taxes, twice the standing charges on all services, higher transport costs.. All due to having the necessary housing for children to live with single parents.

Not twice as much clothes but definitely more clothes..
 
chrisboy said:
Twice the mortgage costs, two property taxes, twice the standing charges on all services, higher transport costs.. All due to having the necessary housing for children to live with single parents.

Not twice as much clothes but definitely more clothes..
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Sorry but I don't buy that as justifying a preferential tax treatment - most of the substantial costs you just listed are general costs of living which the individuals might have regardless of whether they have kids. They'd still be paying a mortgage / rent / property taxes, still be paying for services...

Even with the credit being restricted to the one parent, between the 2 parents they still have 50% more of a personal tax credit than a married or cohabiting couple - I think that's pretty fair.
 
mandelbrot said:
Sorry but I don't buy that as justifying a preferential tax treatment - most of the substantial costs you just listed are general costs of living which the individuals might have regardless of whether they have kids. They'd still be paying a mortgage / rent / property taxes, still be paying for services...

Even with the credit being restricted to the one parent, between the 2 parents they still have 50% more of a personal tax credit than a married or cohabiting couple - I think that's pretty fair.
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There's definitely more need for a single person with kids to have a house than a single person with no kids. If i'd no kids, id either be sharing with a couple of mates, or in a flat, or most likely emigrated.But i felt for the security and happiness of my kids , after we broke up, that a house was needed.

Saying that the two parents have 50% more of a personal tax credit is mathematically correct, but in reality its one has 100% more and one has just lost half of their total personal tax credit which has been there since long before i split from my ex. And with the family law the way it is in this country will 9/10 times be the father who loses out..
 
Doh! Just realised I will lose the Single parent tax band as well as the actual credit, this will bring the net loss to me of 47.88 per week! surely they can't punish single parents this hard in one fell swoop!
 
How do i work out the nett impact on my take home pay ?
This is a serious cut to my already struggling weekly income.
I am dreading the impact on my pay packet in January.
 
Well the basic single parent tax credit was 1650 / 12 which is 137.50 per month, so this basic amount is now gone from Jan 14

additionally the single parent tax band was 36,800 it will now be basic single person band rate 32,800 so basically if you are earning more than 32,800 per year you will move into the higher 41% tax rate quicker depending on earnings this could amount to an additional 70 per month in tax
 
Thanks for your reply, appreciate it.

Sick to the stomach with the thoughts of the new year pay packet.
Going to be an even grimmer 2014 for me with this whammy to my bottom line.
Very close to breaking point with it all now, was just getting back slowly on my feet and now this. Even to phase it out gradually would have been a help to me.
 
Your not alone there are thousands like us,I just can't afford this either, it's worth investigating further with tax office towards year end when more detail is available, there may be some way around it through tax planning with ex partner, or modifications made by government, I belive this is such a savage hit all in one go that it will just have to be looked at again- wishful thinking I suppose, I intend to start emailing TDs and I would suggest anyone in this position should do the same.
 
This is what the Commission on Taxation said at the time:

8.3 One-parent family tax credit​
Description​
A single parent, whether widowed, single, separated or divorced, with a dependent child or
children may be entitled to receive the one-parent family tax credit. The value of this credit is​
€​
​
​
​
1,830 per annum. The one-parent family tax credit, where due, is given in addition to the basic
personal tax credit. The tax credit can be claimed in full by each parent provided the child resides
with the claimant for a whole or part of the year of claim. This condition is deemed by the Revenue
Commissioners to be fulfilled if a child resides with a parent for at least one night in the year. The
relief was originally introduced to assist single and widowed parents who work outside the home
and who have dependants. The underlying purpose of the relief, therefore, is to support labour
market participation of single parents with sufficient income to avail of the value of the credit.​

Conclusion​
We acknowledge that this tax relief plays a role in supporting and incentivising the labour market
participation of single and widowed parents. We therefore recommend that the tax credit should
continue. However, we also note that the annual cost of this relief is considerable. We recommend
that Government should seek to minimise or eliminate the inefficiency (or deadweight element)
associated with this relief in relation to the allocation of the full credit (and the additional standard
band which applies as a result) to both parents. Such a move would help restore greater balance
between the cost of the tax credit and the benefit derived from it. Accordingly, we recommend that
the credit be allocated to the principal carer only in accordance with the current arrangements for
child benefit.​
Recommendation 8.9​
The one-parent family tax credit should continue and the credit should be allocated to the​
principal carer only and in a similar way to the current arrangements for child benefit.
 
@Beingfleeced

The only change relates to tax credit. Tax bands remain the same as in 2013
 
kasko said:
@Beingfleeced

The only change relates to tax credit. Tax bands remain the same as in 2013
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Actually the bands will reduce to a lower band - for those not claiming the lone parent credit - so not only will they lose the credit they will also lose the increased band.

This is a massive loss for separated families and will impact children of in a big way - i know some separated dads who were in complete shock today.
 
This is all very hard to stomach. Could someone please explain how much I will lose in my pay come January?

I am a single dad, not the primary care giver. I have a job. I found out last night reading the journal that I will lose my tax credit for being a single parent but was not aware of a change in the bands or is this the same thing?

@mandelbrot just to explain why this credit is important to people like myself. I live in a two bedroom apartment. The second bedroom is my son's room. With the help of the credits I received from this tax allowance I was able to just about make ends meet between paying for bills, pay his mother maintenance, rent, travel to and from my son's primary home 120miles each way. Keep clothes on his back as well as food etc. I am also his primary care giver for over 1 month in the year. The net result for me here is that I may be forced to rent out his room to make ends meet and he will share with me. This is not an ideal environment to raise a child, wouldn't you agree?

You mention that I will still get on average 50% more tax credit than a cohabiting married couple, this is not true for the majority of single dads whose ex-partners will be awarded the entire credit. Hardly a fair deal for many working, single dads.
 
As a divorced working (female) parent I too am in shock. I have always shared parenting on a 50/50 basis and that is definitely the more expensive but better parenting option. Opting to have one parent remain in the family home with the other parent living in single occupancy accommodation, that affords children only visitors access, is the traditional but cheaper option. However this must upset children and why as parents, or indeed as a society, would we want to inflict that on anyone involved, children or parents? Nobody commits to a relationship and has children with separation/ divorce as the preferred outcome in mind. Furthermore, the fact that one parent must now be selected as the main carer will push divorced/ separated parents towards conflict where both are working or where one is in receipt of job seekers allowance. Surely the State should be encouraging a cooperative model of parenting. This is a very short term perspective. A loving and conflict free upbringing is much more likely to result in children who grow into productive adults who in turn will give back to society (this includes tax payments) in the long term.

The single parent tax credit alleviated some of the burden of doing the right thing for one's children. An article on the topic in the Examiner states that "...87,586 .... are receiving the One-Parent Family Payment." [broken link removed]

I think everyone affected by this change should make it clear to their local TDs that they will not be voting for parties that follow such retrogressive policies next time. Remember the grey vote....
 
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