Begin to reverse tax individualisation

[Ceist Beag]

I think it is time to start reversing the changes which favour both parents working over single income families. There is a huge difference in the take home pay depending on whether this is from one earner or both parents earning the same overall total.

Take the following scenario (figures based on family with children, without pensions or any other benefits/allowances to keep it very simple. Figures taken from Deloitte tax calculator)

Family income is €85K

Single income family (the one earner earning the total 85K)
Annual Net Income €58,221.00
Monthly Net Income €4,852.00

Dual income family (based on both working earning 48K and 37K incomes)
Annual Net Income €65,989.00
Monthly Net Income €5,499.00

A stay at home parent is not a burden on the state so why penalise this option? I know back when McCreevy introduced individualisation it was to encourage more SAHP back to work but I think this is a very different time and I don't see why we should still be encouraging both parents to work and leaving children in care.

 

[DB74]

I would prefer to see better tax breaks to people with children as opposed to just couples who are married

Married couples with no children shouldn't get the same tax credits as those with children

 

[Delboy]

I would prefer to see better tax breaks to people with children as opposed to just couples who are married

Married couples with no children shouldn't get the same tax credits as those with children

Not very PC so won't fly in this day and age.
But surely the children's allowance is in effect a tax credit

 

[Protocol]

Ceist Beag,

I see your point, and I think that we should not penalise SAHP.

However, we also want to encourage second earner labour supply.

It was in that context that the part-individualisation was introduced.

What about this suggestion?

• Move to full individualisation, no transfer of SRCOP at all.
• But introduce child tax credits

This would maintain the incentive facing the second spouse to go back to work, as they would have their own SRCOP.