Tax Status of Co-Habiting Couples

Sleepy

A disclaimer first: this is something which directly affects me so my views on this may be biased.

At present in Ireland, co-habiting couples seem to me, to be getting it from every angle:

1. Unmarried couples cannot claim tax credits for each other should only one of them be working.

2. Should either be working, the other is disqualified from receiving most forms of social welfare.

3. When neither is employed, welfare will be paid for the 'dependent adult'.

This is actively incentivising welfare fraud and the black economy. While I'm not engaged in it myself, I'm aware of quite a few couples who are claiming that one partner or the other is living elsewhere so they can claim the dole / single parents benefit whilst the other has a good job and given the above situation, I can't blame them too harshly.

With welfare entitlements so high, I've calculated that as the sole earner in a co-habiting couple with two children (childcare costs make it unaffordable for o/h to work) that rent, the total JSB and Rent Allowance I'd be entitled to after this budget mean that were I unemployed I would be losing the grand total of €98 a week on my net income and that's before accounting for the associated costs of working such as commuting, lunches, maintaing a work wardrobe etc. Finding an extra hundred euros worth of work a week in the black economy couldn't be that difficult. I'd estimate I could do it with a day's work at week, two at most.

To me, it seems to make sense to give co-habiting couples the same entitlement to claim a dependent adult tax credit that they would be entitled to were they married. Obviously, it's easy for me to say this when it'd be an extra three and a half grand or so a year to me. Given that I earn a decent enough salary (close to average PS sector wage), I'm at least getting *some* premium for getting up and going to work in the morning (even if it's less than I'd get claiming dole and doing nixers a couple of days a week).

For a single earning, co-habiting couple with two children in Dublin paying rent of €1,000 a month, I've calculated that you need to be earning over €39,330 a year just to equal your welfare entitlement! A married couple get parity with their welfare entitlements at roughly €34,950.

Welfare Entitlements of Couple with 2 Children
Adult Couple||312.8|
Two dependent Children||59.6|
|||372.40
Rent Allowance|||
Max Rent Level|1050 p.m.||
3 Bed House|1000|12000|
Personal Contrib|26|1352|
||10648|204.77
Weekly Income|||577.17
Annual Equivalent|||30012.80
Monthly Equivalent|||2501.07

RedXIV

It does indeed suck that while I live with my OH and our 2 kids, I don't get any tax benefits from her while she doesn't work etc. At the moment though, you have to wonder, will it take much longer for the state to recognise that couples don't need to be married to live together?

It's mentioned in a thread in Humanities I think that Marriage is becoming an outdated concept. Not because of the idea behind a full commitment but because of the religious ties that people are no longer feeling obliged to adhere to.

I'm hoping it gets sorted out sooner rather than later as I'm a good bit off that total and I could use all the help I can get!

dirtyghettokid

2. Should either be working, the other is disqualified from receiving most forms of social welfare.

i remember the SW worker's words at the hatch in coolock so clearly;
"anyone who lives in the house is considered a FAMILY UNIT and their income is taken into account"
i was denied JA because i lived with my OH (who i am NOW married to)
i was sickened by this. i don't think a person you are not married to should HAVE to be responsible for you financially. why is there marriage at all if that is the case?

& getting married isn't that rosy; you can't be taxed as a married couple in the year you are married.
http://www.revenue.ie/en/personal/circumstances/marriage.html

Sleepy

dirtyghettokid, a bit of consistency would be nice as a starting point.

Either co-habiting families are recognised as families for tax and welfare purposes or they're not. It's ludicrous to have them recognised differently by the different departments.

RobbieTheRobber

I agree it is silly that the Irish state can use financial reasons to force people into a life style choice.
I have no intention of getting married for various reasons, however at times the tax and other legal obstacles faced by non-married couples is absurd.

I remember the government was looking into changing some of these legal standings a few years ago but then it dropped from the news and nothign happened.

edanto

Sleepy, you are as right as a fella can be.

The best thing to change this is probably a court case, so you would need to find someone who feels strongly enough about it to do the research and find out if it's breaking any anti-discrimination laws.

Politically, I don't think you have any chance of getting the Dept of Finance to make the change you would like unless they are forced to by a court. The simple reason for that is just 'cos it would cost money.