Removal of One Parent Family Credit is to the detriment of children

Removal of One Parent Family Credit is to the detriment of children

OUT OF THE blue, on Budget Day in October 2013, the Minister for Finance, Michael Noonan, TD., announced that he was removing the One Parent Family Credit (OPFC) and replacing it with the Single Person Child Carer Credit (SPCCC) on foot of a recommendation contained in the Commission on Taxation Report in 2009.

The OPFC was a tax credit of €1,650 per annum that was available to those who were parenting on their own. It brought with it an increase in the Standard Rate Tax Band from €32,800 to €36,800. According to the Revenue, the tax credit resulted in reducing a claimant’s tax liability by €31.73 a week and – where a claimant’s income exceeded €36,800 – the additional rate of the Standard Rate Tax Band was worth a maximum of €16.15 per week. The maximum value of the credit and the additional rate band therefore was €2,490 a year or €47.88 a week. So a significant amount to lose. The following table illustrates the changes:

Annual wage difference in amount of tax paid per week

€13,500 (minimum wage x 30 hours) No change
€20,000 + €13
€30,000 + €10
€40,000 + €48
€60,000 + €47

As stated above the OPFC was available to parents parenting on their own. This meant that where two estranged parents were sharing the parenting of the child, both parents could claim the credit. The requirement from Revenue was that that the child resided with the parent at least one night in the year. Obviously, this criterion was totally inappropriate and the OPFC was in need of reform.

However, rather than reform this essential tax credit Minister Noonan decided, arbitrarily, to completely remove it.

To add insult to injury, the Minister has named the person who receives the new tax credit the Primary Carer (usually the mother) and the other parent the Secondary Carer (usually the father). This terminology has produced several witty but sad images on the Facebook page set up by fathers angered by the change – Irish Fathers for Equality.

We believe it is best for children to grow up with the involvement of both parents in their lives, provided it is safe and practical. Shared parenting is good for children and research shows this clearly.  The State should be supporting this, rather than removing an incentive to shared parenting. Read more.

See Revenue for further information.