Dáil Éireann debate -
Wednesday, 10 Feb 1993

Vol. 425 No. 7

Written Answers. - Tax Treatment.

Michael Creed

Question:

102 Mr. Creed asked the Minister for Finance if his attention has been drawn to media reports (details supplied) wherein allegations of discrimination against widows and widowers are contained; the steps, if any, he intends to take to alleviate this discrimination; and if he will make a statement on the matter.

Nora Owen

Question:

113 Mrs. Owen asked the Minister for Finance if he will make alterations in the tax code so that widows/widowers are not worse off after the death of a spouse; and if he will include a tax concession for a housekeeper in order to keep the family together.

Minister for Finance (Mr. B. Ahern)

I propose to answer Questions Nos. 102 and 113 together. I do not accept that there is discrimination in tax treatment as between widowed persons, on the one hand, and married couples, on the other. I assume that the Deputies' concerns stem from the tax treatment of widows-widowers in the years subsequent to the year of bereavement. The position here is that the doubled rate bands available to married couples were introduced in the light of the Supreme Court Ruling in the Murphy case and, in accordance with that decision, are given in respect of two adults.

The special position of widowed persons is recognised by the provision of a widowed personal allowance, currently standing at £2,600 compared to the single person's allowance of £2,100. There is also a special ceiling on mortgage interest relief currently standing at £2,320 compared to £1,600 for a single person. These provisions allow greater tax relief for widowed persons than is available to a single person. Widowed persons with children, are also entitled to a widowed parent allowance, which brings the total basic allowances of a widowed parent up to the same level as those of a married couple. In recognition of the special difficulties faced by widowed parents in the years following bereavement, a special tax allowance was introduced in 1991 for widowed parents with dependent children, to operate for the first three years following bereavement. The allowance is £1,500 for the first tax year following bereavement, £1,000 for the second and £500 for the third.

In relation to the question of the introduction of further concessions such as a housekeeper's allowance for widowed parents, I would point out that such an allowance would not only be costly in itself but it would be bound to lead to calls for a similar allowance from other groups which would, in equity, be hard to resist. The loss to the Exchequer would have to be made up by increased taxation elsewhere.