Moving from a 2 income to 1 income family

C

clonetrooper

Guest
Hi all,

Been reading through the various scenarios and situations but have not seen my one (apologies if I have not browsed back far enough).

My wife and I both currently work and are registered with Revenue as married, treated jointed but assessed seperately and receive the full married tax allowance.

My income is over €90k while my wife's income is approx €55k. We have 2 children and having looked at our monthly costs it has become apparent that a significant portion of my wifes income is paying for childcare or related costs. If my wife gives up work, what exactly can she claim and what will transfer to me ? The key question for us is "if she gives up work and give me her various allowances, could the reduction in tax I pay (if she gave up work) balance out the "net" contribution left from the income she is currently making after accounting for childcare? ". To do the calculation I need to figure out what changes.

I assume that the following can\might happen:

1. Her Tax credits (not PAYE credits) will move to me
2. Do the tax bands also change for me ?
3. Can she claim jobseekers allowance ?
4. Can she claim carers allowance ?

Hope you can tell me what will change and what we\she can do to max our income ?
 
Hi all,


I assume that the following can\might happen:

1. Her Tax credits (not PAYE credits) will move to me
2. Do the tax bands also change for me ?
3. Can she claim jobseekers allowance ?
4. Can she claim carers allowance ?

Hope you can tell me what will change and what we\she can do to max our income ?


1. Yes, your tax credit increases to €3,660
2. You'll get €45,400 @ 20% balance at 41%
3. Technically she shouldn't as she won't be seeking work
4. You claim carers tax credit of €900 per year if she doesn't earn an income of more than €5,080 in the year.

http://www.revenue.ie/en/tax/it/leaflets/it1.html#section12
 
Your tax credit should already be 3660 and hers the same.
You can transfer 1830 of her credits to you and her PAYE credit is lost as she is not working
 
http://www.taxcalc.eu/

According to the above website you'll be down significantly but that doesn't include the absence of childcare costs and the money you'll probably save by having a slower pace of life.

Yearly take home pay. (Married)
Selected Tax year is 2009 #2: 'Emergency' Apr-09
Gross Take Home Pay = € 90000.00
Tax = € 23975.28
Take Home Pay after Tax = € 66024.72
Less PRSI = € 6529.87
Less Spouse PRSI = € 0.00
Net take home pay = € 59494.85


Yearly take home pay. (Married)
Selected Tax year is 2009 #2: 'Emergency' Apr-09
Gross Take Home Pay = € 145000.00
Tax = € 40041.28
Take Home Pay after Tax = € 104958.72
Less PRSI = € 6529.87
Less Spouse PRSI = € 4135.84
Net take home pay = € 94293.02
 
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