Are separated divorced dads the biggest losers of budget 2014

[supertramp]

It looks like separated/divorced dads are set to lose €2,490 in 2014 - and there has hardly been a word about it.

Is there any other group who have lost 200 per month as a result of budget changes?

I heard the health insurance industry nearly having a heart attack because health insurance might rise by €100 over the year - ie €8 per month

The media keeps saying separated / divorced dads have lost 1650 - but we have actually lost 2490 as the standard tax band has been reduced by 4000 so this is an extra 840 loss for high rate tax payers.


That is such an impact on fathers who look after their kids = pay maintenance and also have to pay for a second home. I heard it been abolished because there has been abuse but divorced people have had their finances arranged by the courts
Will we see them rush back to the courts to re negotiate maintenance payments?


One initiative that would alleviate this situation for genuine cases would be to extend tax relief to legally enforced kids maintenance payments - how could we propose this change?

 

[kateball]

I had a look at this change as I know a few people in your situation. Yes it looks like you will lose over €2,490 net next year - if you are a high rate tax payer.

I havent seen this in any of the Budget coverage either - but unfortunately if the Finance Bill is passed you will lose €200 a month from January. The media might pick up this story if you can make them aware of it - or the Opposition parties?

 

[gianni]

Why was it there in the first place?

I'm not asking in a snide way, I'm genuinely curious as I never knew of it's existence as I'm not in that situation.

 

[mandelbrot]

Why was it there in the first place?

I'm not asking in a snide way, I'm genuinely curious as I never knew of it's existence as I'm not in that situation.

The rationale was that separated parents, who both maintain the kids, are financially in a worse position than a married/cohabiting couple, so they were both entitled to claim the one parent family tax credit. The change is that from now on, only the primary carer will be entitled to it.

Unfortunately it was quite widely abused, as many people continued to claim it even after they had shacked up with a new partner.

 

[supertramp]

I can understand why people might say why was it there in the first place. And yes I am sure some people who claimed it didnt deserve it and thats why its being withdrawn. (We could say the exact same thing about childrens allowance!)

To be fair to the thousands of genuine cases who are going to be so much worse off next year - they should ease these credits out gradually - not hit us with a net loss of €200 per month. I'm sure most people would feel very hard hit with an immediate €200 drop in monthly net pay.

Another problem is this change is so drastic it may well force many separated / divorced people back to the courts to rearrange maintenance agreements, as these are all based on net take home pay. The thought of trying to negotiate all that over again would be extremely stressful for all parties.


Something like a 3 year phasing in period would have allowed everyone to get used to the drop in net income - and that would be fair to all concerned.

 

[orka]

And yes I am sure some people who claimed it didnt deserve it and thats why its being withdrawn. (We could say the exact same thing about childrens allowance!)

There's a big difference between claiming something (children's allowance) that you might not absolutely need but are 100% entitled to, and fraudulently claiming for something that you are not entitled to...

 

[supertramp]

There's a big difference between claiming something (children's allowance) that you might not absolutely need but are 100% entitled to, and fraudulently claiming for something that you are not entitled to...

Thanks for this really helpful contribution to the debate!

 

[STEINER]

Something like a 3 year phasing in period would have allowed everyone to get used to the drop in net income - and that would be fair to all concerned.

People who lose their jobs in the recession don't have 3 years to get used to the drop in net income.

 

[Sunny]

People who lose their jobs in the recession don't have 3 years to get used to the drop in net income.

What has that got to with anything? There are probably single fathers out there who have taken huge pay cuts and now lose this credit so really don't understand the point you were to make.

 

[mandelbrot]

People who lose their jobs in the recession don't have 3 years to get used to the drop in net income.

That's a ridiculous statement to make - this thread is about a Govt policy via a budget change, that's hitting separated fathers for €200 a month, not the vagaries of market forces.

There are plenty of examples of a change like that being phased in - like the rent tax credit being phased out over several years.

 

[110quests]

Hi, I know a person who will be affected by this ridiculous change and noticed it on Budget day. I emailed several TDs including Minister for Finance. I got stock replies from all except one TD who was working on looking for some backtracking on it as he is involved with a group for separated and single fathers. However, as we know the finance bill was passed in Dail so no benefit came from his efforts. I also contacted RTE as I thought it had received insufficient analysis, but they said it had been discussed. I did hear a further discussion later, but the Government was not for turning, as we know. Perhaps the Press could high light it again but as the people effected by it are not a strong lobbying group I doubt anyone will pay heed. Budget policy seemed directed in this way so that there were several smaller sections of society targeted, Government knowing they are not organised to lobby or protest ie maternity leave cut, reduced relief on Health Ins, Medical card holders, pension capped subscribers, etc. To me, this alteration is a backward, last century type ruling, pushing the role of single fathers into a different era, by denying them of some assistance in their duties and responsibilities towards their children.

 

[supertramp]

Thanks 110quests
I agree with all your comments - I will organize some reminders out to the media this week as even the journalists who gave it some very little coverage didnt get the facts right. The Irish Times and Indo both said single fathers would lose 1650 tax credit but didnt mention if you happened to be a high rate tax payer you will be hit with an additional 840 loss. Now lets face it you dont have to earn much in this country to be a high rate tax payer - yet the lowest paid high rate tax payer stands to lose €2,490.
A single budget measure like this should not target a small group of people with such a massive hit in one go.

 

[Purple]

The rationale was that separated parents, who both maintain the kids, are financially in a worse position than a married/cohabiting couple, so they were both entitled to claim the one parent family tax credit. The change is that from now on, only the primary carer will be entitled to it.

Unfortunately it was quite widely abused, as many people continued to claim it even after they had shacked up with a new partner.

What about when the primary care giver (it seems to be assumed that its the mother) shacks up with someone else? Then the father gets nothing, even though he's single, and the mother keeps the tax credit even though she's not single. What a sexist piece of legislation. I assume ivana Bacik etc will take this up... since they are so interested in equality and all.

 

[Dachshund]

What about when the primary care giver (it seems to be assumed that its the mother) shacks up with someone else? Then the father gets nothing, even though he's single, and the mother keeps the tax credit even though she's not single.

You can't be cohabiting to avail of the tax credit.

The revenue page has not been updated to account for the Budget but the qualifying criteria are outlined on [broken link removed].

 

[Purple]

You can't be cohabiting to avail of the tax credit.

The revenue page has not been updated to account for the Budget but the qualifying criteria are outlined on [broken link removed].

And do you think that most people volunteer that information?

 

[Dachshund]

And do you think that most people volunteer that information?

That's why cohabitants are often reported to revenue/social welfare.

Currently the legislation is not sexist and most legislation is framed in gender neutral terms.

 

[Purple]

That's why cohabitants are often reported to revenue/social welfare.

Currently the legislation is not sexist and most legislation is framed in gender neutral terms.

I think "sometimes" would be a better word herethan "often". You could add that Revenue then sometimes do something about it.

Both parents share the financial burden of looking after their children. They do this by agreement and/or through the courts. Why penalise one parent? As we all know the mother is usually the primary care giver as the courts usually favour the mother, which is sexist. Therefore this legislation is sexist in its application. So much for equality. If a piece of legislation favoured men in this way there would be uproar from women and rightly so but it seems that some are more equal than others.

 

[orka]

I don't understand your point. The legislation IS gender neutral - if the primary care giver is the father, he gets the allowance. The fact that courts (and very often couples themselves) decide that the mother is the primary care giver seems to be your issue - but that is independent of this legislation. The couple/courts decide the finances so there will probably be a reallocation of the impact of the change - there's no legislation or rules to say that the non-primary care giver must take the full net impact of this.

 

[supertramp]

The couple/courts decide the finances so there will probably be a reallocation of the impact of the change - there's no legislation or rules to say that the non-primary care giver must take the full net impact of this.

Not sure what you mean - the Finance Act has never distinguished between primary and secondary carer until now. Of course the non-primary carer will take the full impact and in most cases that will be the fathers.

This will drive couples back to the courts as most people affected by this are men - you cant expect the primary carer (who in most cases will be the mother) to reduce her net pay and give up some of her income because her ex has been screwed by this ridiculous legislation. And why should she ?

Many fathers will lose over €200 net a month from January - all but the very wealthy could ignore this hit.This legislation will drive many couples back to the courts or into mediation to renegotiate maintenance payments which are based on net income. Thats why there is a lot of anger out there.

 

[orka]

...Of course the non-primary carer will take the full impact and in most cases that will be the fathers. ...This legislation will drive many couples back to the courts or into mediation to renegotiate maintenance payments which are based on net income.

You're pretty much agreeing with what I said - there's no requirement for the non-primary care giver to take the full net impact of this (net here meaning after reallocation of resources between the couple). Whether it's through mediation, the courts or by mutual agreement, the reality that the couple's combined resources are down by €200 per month will need to be reflected in revised maintenance agreements.

Would you have been happier if the allowance was halved for each person? So the overall impact would be the same but there would be no need for messy renegotiation of maintenance etc.?