# Married couples on a single income do very badly out of this budget



## Homer (14 Oct 2014)

Seems a bit strange that the 20% band is not being increased for married couples with a single income.  This means that the additional 20% band for married couples with a single income is being reduced by €1,000. Not very family friendly.


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## Brendan Burgess (14 Oct 2014)

> An increase in the standard rate band of income tax by €1,000 from €32,800 to €33,800 for single individuals and from €41,800 to €42,800 for married one earner couples.



So a single person gets an additional €1,000 
A married couple with both earning gets an additional €2,000
A married couple with one earner gets an additional €1,000

One of the structural problems of the Irish tax system is that we have such a generous system for married couples. This goes part of the way, but only part of the way, to addressing it. 

Brendan


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## DerKaiser (14 Oct 2014)

Brendan Burgess said:


> One of the structural problems of the Irish tax system is that we have such a generous system for married couples. This goes part of the way, but only part of the way, to addressing it.



Is that a matter of opinion?

As far as I can remember a one income married couple were taxed very similarly to a dual income couple in the past. We are now almost at a stage where almost no allowances are transferred from a non-working spouse. In relative terms, the system has never been less generous to the one income couple.

I'm sure there's arguments for either method, which I won't get into, but one effectively incentivises working couples and child care whilst the other incentivises a stay at home spouse. Not sure why either would be an obvious choice for society.


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## Bronte (15 Oct 2014)

DerKaiser said:


> I'm sure there's arguments for either method, which I won't get into, but one effectively incentivises working couples and child care whilst the other incentivises a stay at home spouse. Not sure why either would be an obvious choice for society.


 
I think that a society that incentivises a stay at home spouse is a good idea.  Particularly while children are young.  

Don't they now give PRSI/stamps credit for people who stay at home.


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## 44brendan (15 Oct 2014)

> I think that a society that incentivises a stay at home spouse is a good idea. Particularly while children are young.
> Don't they now give PRSI/stamps credit for people who stay at home.


Any decent study undertaken on families with one stay at home parent has found that the resultant development affects on the children have been more positive (also helath has been higher). My wife did a lot of research in this area. While I fully acknowledge that this approach would prove difficult for many families, I feel that there should be incentives to encourage at least a period of stay at home parenting.
We took that decision many years ago and while finances have suffered we have seen the positive results on our children. 
I fully agree with Homer that families who want to make this choice should be encouraged through the taxation system.


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## moneybox (15 Oct 2014)

Brendan Burgess said:


> So a single person gets an additional €1,000
> A married couple with both earning gets an additional €2,000
> A married couple with one earner gets an additional €1,000
> 
> ...



Can we blame Charlie McCreevy for that? was it him that introduced this policy of rewarding the two earner family.


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## Brendan Burgess (15 Oct 2014)

Children are not relevant to this. There is no additional tax credit for having dependent children.   A married couple without children get the same tax treatment as  a married couple with children.

I could see some sense in giving additional tax credits for children, if the child benefit is not sufficient. 

Brendan


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## michaelm (15 Oct 2014)

Homer said:


> Seems a bit strange that the 20% band is not being increased for married couples with a single income.


Hardly strange.  We were all but guaranteed that FG would further turn the Individualisation screw  . . which is a bit ironic as they jumped up and down when Individualisation was originally introduced by FF . . conversely FF were jumping up and down about it yesterday .  Some (many maybe) will view it as a good thing.  

Personally I think SRCOP should be the same whether a family decides childcare should be outsourced or kept in-house.  But as Brendan rightly points out this has nothing to do with children; while this is technically correct children and childcare are very much part of the picture.


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## Delboy (15 Oct 2014)

Noonan on the Sean O'Rourke show being quizzed on this by a caller now who pointed out that he was dead set against it when it was first introduced.

He said he did at the time, but it's now enshrined in the tax system, that the tax system views people as individuals and he'll see 'if anything can be done in the way of an allowance in future budgets' but 'he has no intention of reversing the individualisation in the tax system'.
He admitted there was now inequality between a house where only 1 member of a couple worked and the house next door where both adults worked. But it was the choice of the 1st house for only 1 person to work

The caller was very articulate and really lambasted both Labour and FG for this by pointing out what they said at the time McCreevey brought it in


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## Greekwife (15 Oct 2014)

Also you know have a position where a Household (married) with 1 Income of €71k pa is considered a "High Earner"  and moves into the 8% bracket for USC but 2 people earning €139k pa between them is not considered "High Earners".


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## Branz (15 Oct 2014)

Delboy said:


> ..Noonan: . But it was the choice of the 1st house for only 1 person to work.


Must remember this with the Pension Levy when I see the next polling card.


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## advice pls (15 Oct 2014)

I'm sure in many cases like ours it was a choice based on the simple fact that currently I can't afford to work. I was made redundant and there just isn't the jobs out there at the level of pay and benefits I was on before. I have no objection to any work and would happily turn my hand to anything if given the chance but the reality is with a young family I would be paying out more than I would be taking in.


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## michaelm (15 Oct 2014)

Delboy said:


> Noonan on the Sean O'Rourke show being quizzed on this by a caller now who pointed out that he was dead set against it when it was first introduced.


Sean allowed them to slither out of the question.  Noonan said he'd see what he could do in the future and Howlin said everything can't be done in one go and it would cost €x to undo it, both emollient and empty comments.  Sean should  have zeroed in in the fact that it's not just a case that the Ministers  didn't do anything on Individualisation but that they deliberately widened it.


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## Greekwife (15 Oct 2014)

advice pls said:


> I'm sure in many cases like ours it was a choice based on the simple fact that currently I can't afford to work. I was made redundant and there just isn't the jobs out there at the level of pay and benefits I was on before. I have no objection to any work and would happily turn my hand to anything if given the chance but the reality is with a young family I would be paying out more than I would be taking in.



I am in pretty much the same position.


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## 44brendan (15 Oct 2014)

> Also you know have a position where a Household (married) with 1 Income of €71k pa is considered a "High Earner" and moves into the 8% bracket for USC but 2 people earning €139k pa between them is not considered "High Earners".


Similarly Sinn Fein view a couple with 1 earner on a salary >100k to be in the high earner bracket and with 2 employed on 50K as being in middle income bracket. 
Individualisation is all very well and I appreciate BB's point about children being a separate issue. However, there are many situations where one half of a couple is not in a position to choose not to work. A full employment economy might make a case for stricter individualisation to encourage parties into the workforce. However, we are well short of that position and appropriate tax changes would give an opportunity to some parents to exit the workforce and free up jobs for those unemployed.


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## advice pls (15 Oct 2014)

If it gets to a point where from revenues point of view there are no "married" couples just two individuals living at the same address how does that impact places like the department of social welfare? 

As a rough example if they means tested child benefit do you end up where a household with two people earring €50k each doesn't get it but a household with a single income of €100k can qualify for a full or half amount?


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## DB74 (15 Oct 2014)

44brendan said:


> However, we are well short of that position and appropriate tax changes would give an opportunity to some parents to exit the workforce and free up jobs for those unemployed.



Well if you take a 2-income family with one earning min €41,800 and the other earning €32,800 with 2 children in childcare costing €1,000 per month (I just plucked this figure from the air)

Assuming that they have their own tax credits etc, the €32,800 person takes home €26,613 per year after tax

If the €32,800 spouse decides to give up work then the other spouse's net pay will increase by €4,350 per year while they will also save a further €12,000 in childcare.

So the drop in income of €26,613 is offset by €16,350 bringing total net drop in income to just over €10,263 per annum

Now don't get me wrong, €10K is still €10K but it's not a total wipe-out of the household income and you also have to take into account non-financial aspects such as time with children, less stress in workplace etc etc.

If the childcare costs were €1,500 per month then you're looking at a total drop in income of just €4,263 per year

I'm not sure how much extra the govt should be giving in tax breaks etc to encourage parents to give up work TBH.


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## 44brendan (15 Oct 2014)

> I'm not sure how much extra the govt should be giving in tax breaks etc to encourage parents to give up work TBH.


I am not in favour of "extra" tax breaks to encourage parents to give up work. However I would encourage the government to implement a tax position where a married couple with 1 earner is taxed the same as a couple with 2 earners. I'm reasonably sure that the tax differential was changed in the early noughties by FF to encourage non working parents back into the workforce!


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