Dáil Éireann Debate, Tuesday - 30 June 2026
269. Deputy Darren O'Rourke asked the Tánaiste and Minister for Finance if he can confirm, considering all other things being equal, the difference in net take-home income between a lone parent household with a single earner on €88,000 and a married couple or two-adult household on a combined income of €88,000; if he will outline the basis for any disparity; and if he will make a statement on the matter. [49157/26]
View answer270. Deputy Darren O'Rourke asked the Tánaiste and Minister for Finance the specific measures, he is considering in Budget 2027 to address what many view as a “single person penalty” within the tax system; whether he will commit to reforming tax credits and bands to better reflect the reality that lone parents are supporting an entire household on a single income; and if he will make a statement on the matter. [49158/26]
View answer271. Deputy Darren O'Rourke asked the Tánaiste and Minister for Finance if he agrees with the assessment that lone parents are being asked to earn nearly twice as much just to achieve what dual-income households get by default, all while carrying the full weight alone; the measures he is taking to address this; and if he will make a statement on the matter. [49159/26]
View answerI propose to take Questions Nos. 269, 270 and 271 together.
By way of background, prior to 2000, the income tax system allowed for full joint assessment of married couples. This meant that a married one earner couple could use the combined tax credits and standard rate band available to both individuals – i.e. double the personal tax credit and standard rate band available to a single earner. However, as a result, where the primary earner of a married couple had sufficient income to use the available reliefs in full, the second earner faced the marginal rate of income tax from the first pound of income earned, which acted as a disincentive to workforce participation for second earners.
A process of moving towards an individualised system of income taxation began in the tax year 2000/2001, with initial steps being taken to individualise the tax bands. The stated economic objective behind the move was to increase labour force participation and reduce the numbers of workers paying the higher rate of income tax. It should be noted that many European countries have made similar moves towards a partial or fully individualised income taxation system on the grounds that it improves equality and economic independence for women.
The policy of individualisation never advanced beyond the initial step outlined above. The result is that we now have a hybrid system, which has been maintained for over 25 years. For example, under joint assessment, up to €9,000 of the standard rate band can be transferred between married couples/civil partners and the married personal tax credit can be allocated in full to one spouse or apportioned between spouses depending on their income levels.
The issue of tax individualisation was considered by the Commission on Taxation and Welfare (CoTW) in 2022 and it recommended a phased move towards individualisation of the Standard Rate Cut Off Point as a step towards addressing disparities in the income tax system, facilitating increased employment, and decreasing the gap in the employment rate between men and women. Further details are set out in the Report of the Commission, located at the following link -
www.gov.ie/en/publication/7fbeb-report-of-the-commission/
Turning to the tax treatment of single parent families, section 462B of the Taxes Consolidation Act (TCA) 1997 provides for the Single Person Child Carer Tax Credit (“SPCCC”). Subject to the conditions of section 462B TCA 1997 being met, the SPCCC is available to a single person who proves that they have a qualifying child resident with them for the whole or greater part of the year of assessment. The SPCCC has a nominal value of €1,900 per annum and carries an entitlement to an additional €4,000 extended rate band, such that those availing of the credit can earn up to €48,000 in 2026 before liability to the higher rate of income tax arises.
In relation to the Deputy’s specific question regarding the difference in net take-home income between the two households outlined, it is not possible to determine the net income without knowing the compositional breakdown of the couple’s income. As the Deputy will be aware, the income tax system allows married couples and civil partners to choose whether to be jointly or individually assessed.
USC is an individualised tax and encompasses a number of thresholds and rates and therefore a taxpayer’s liability can only be calculated if the individual’s income is known. Likewise, PRSI is also an individualised charge.
The objective of the income tax system is to strike a balance between raising revenue to fund public services and supporting and incentivising work.
The Government acknowledges the challenging circumstances that face many single parent families, and it is for this reason that a broad range of supports, including non-tax supports, are provided for such families.
Finally, as the Deputy will appreciate, decisions regarding taxation measures are made in the context of the annual Budget and Finance Bill processes, at the appropriate time, and having regard to the sound management of the public finances.
