Tax benfits for married couples vs none for cohabiting, against european law?

sexmag

Hi,

I have a question that arose from a thread i started in the tax forum.

Married couples are enititled to tax benifits when it comes to employment and income.

However more and more couples decide not to marry and cohabit (and advise welfare/revenue of this to be above board) instead but are not entitled to tax benifits as they are considered single which seems quite unfair.

A thread started a few years back stated it mihht be in contrary to a European Law, no im no expert so i thought id open it for discussion.

Is it possible that by providing tax break/benifits to married couples and not to cohabiting couples who do not wish to get married, that the government may be in contrary or against a european law?

Thanks

_Brian

I thought all benifits of marriage in tax affairs were done away with.

Which are you referring to ?

Doop

I have never understood how its a fair system. My understanding is that it was originally to facilitate the days where only one person left the household to work (ie the father).

Needless to say its more the norm now that both parents works.

Also how was this fair the gay couples prior to the marriage referendum?

Addle

sexmag wrote: »

However more and more couples decide not to marry and cohabit

Is this true?
Marriage is as popular as ever.

Joint Assessment can be beneficial depending on how much a married couple earn, and how their earnings are split between them.

If you want to enjoy a positive benefit of being married, then marry.

Tzardine

_Brian wrote: »

I thought all benifits of marriage in tax affairs were done away with.

Which are you referring to ?

They still exist - when you get married you get an increased tax credit and the ability to adjust your rate bands and potentially avoid the higher tax bracket.

I sometimes tell my wife I only married her for her tax credits :P

Spook_ie

Cohabitating isn't the same as Marriage or Civil Partnership, there is no need for any kind of commitment to cohabit IMO anyway

Captain Flaps

Addle wrote: »

Is this true?
Marriage is as popular as ever.

Joint Assessment can be beneficial depending on how much a married couple earn, and how their earnings are split between them.

If you want to enjoy a positive benefit of being married, then marry.

I just bought a gaff with my girlfriend of 7 years, we've no specific plans to marry or have kids, are we less of a couple than our married friends who chose to wed and keep renting?

GingerLily

Captain Flaps wrote: »

I just bought a gaff with my girlfriend of 7 years, we've no specific plans to marry or have kids, are we less of a couple than our married friends who chose to wed and keep renting?

Legally yes

Addle

Captain Flaps wrote: »

I just bought a gaff with my girlfriend of 7 years, we've no specific plans to marry or have kids, are we less of a couple than our married friends who chose to wed and keep renting?

You're not less of a couple, but you're not a married couple.

sexmag

Spook_ie wrote: »

Cohabitating isn't the same as Marriage or Civil Partnership, there is no need for any kind of commitment to cohabit IMO anyway

True but cohabiting couples live like married people,kids, mortgage etc

Many dont wish to marry for a vairety of reasons but are technically penalised by not officiating their relationship with marriage, when many would do so if it was possible to do it without being married.

Tzardine

Married couples also have the following benefits over those that are unmarried:

*Assets may be transferred between husband and wife without being subject to capital gains tax.
*Any capital losses made by one spouse may be used by the other spouse to reduce a capital gains tax bill.
*Any gifts or inheritances given by one spouse to another are completely free of capital acquisition tax.
*Any money received by yourself or your spouse from a life assurance policy (providing you or your spouse were the original beneficial owners) will be completely tax-free.
*Married couples do not have to pay stamp duty when they transfer assets from one to another.

wersal gummage

Captain Flaps wrote: »

I just bought a gaff with my girlfriend of 7 years, we've no specific plans to marry or have kids, are we less of a couple than our married friends who chose to wed and keep renting?

There's a difference, as other people have pointed out.

I'm not sure about this, but I suspect you and your girlfriend may also not be "next of kin". Hopefully it never arises, but does this raise any potential issues in a medical emergency type scenario??

lawred2

sexmag wrote: »

Hi,

I have a question that arose from a thread i started in the tax forum.

Married couples are enititled to tax benifits when it comes to employment and income.

However more and more couples decide not to marry and cohabit (and advise welfare/revenue of this to be above board) instead but are not entitled to tax benifits as they are considered single which seems quite unfair.

A thread started a few years back stated it mihht be in contrary to a European Law, no im no expert so i thought id open it for discussion.

Is it possible that by providing tax break/benifits to married couples and not to cohabiting couples who do not wish to get married, that the government may be in contrary or against a european law?

Thanks

are we?

gimme gimme gimme

lawred2

Tzardine wrote: »

They still exist - when you get married you get an increased tax credit and the ability to adjust your rate bands and potentially avoid the higher tax bracket.

I sometimes tell my wife I only married her for her tax credits :P

only if one of the spouses is not working and at that the working spouse is only getting their other half's personal text credit? No?

Tzardine

lawred2 wrote: »

only if one of the spouses is not working and at that you the working spouse is only getting their other half's personal text credit? No?

Yes this is correct, I should have been clearer.

Seen this elsewhere

Assets may be transferred between husband and wife without being subject to capital gains tax.

Any capital losses made by one spouse may be used by the other spouse to reduce a capital gains tax bill.

Any gifts or inheritances given by one spouse to another are completely free of capital acquisition tax.

Any money received by yourself or your spouse from a life assurance policy (providing you or your spouse were the original beneficial owners) will be completely tax-free.

Married couples do not have to pay stamp duty when they transfer assets from one to another.

http://www.thejournal.ie/readme/marriage-has-some-very-tasty-tax-benefits-attaching-to-it-heres-how-to-claim-them-3939250-Apr2018/

troyzer

I don't plan on getting married with my long term partner either but from the perspective of revenue, they can't realistically open it up to anyone cohabiting.

You'd just have flat mates with no relationship claiming the tax benefits.

The standard rate cut-off point for married couples/civil partners is €43,550 in 2018. This amount is taxed at 20% and the balance is taxed at 40%.

http://www.citizensinformation.ie/en/money_and_tax/tax/income_tax/taxation_of_married_people.html

Tzardine

RoboKlopp wrote: »

The standard rate cut-off point for married couples/civil partners is €43,550 in 2018. This amount is taxed at 20% and the balance is taxed at 40%.

http://www.citizensinformation.ie/en/money_and_tax/tax/income_tax/taxation_of_married_people.html

When both people are working, the standard rate cut off is €69,100, and you can distribute it in whatever ratio between the two that you like.

.......

wersal gummage wrote: »

I'm not sure about this, but I suspect you and your girlfriend may also not be "next of kin". Hopefully it never arises, but does this raise any potential issues in a medical emergency type scenario??

I have seen this cause issues among my own friends.

One couple who has been together for 20 years but never married and when the guy was in a terrible accident they contacted his ex wife in the UK for a decision on switching off life support as she was still legally is next of kin.

Tax/inheritance/next of kin/rights to your kids - all good reasons to get married in the society in which we live - outside of romance/making a public declaration etc...

sexmag

troyzer wrote: »

I don't plan on getting married with my long term partner either but from the perspective of revenue, they can't realistically open it up to anyone cohabiting.

You'd just have flat mates with no relationship claiming the tax benefits.

That of course would be a concern but there would need to be ways to prove the legtimacy of it i.e. children etc

It has only sparked my interest as my partner is not working currently as she is a full time carer to her son and her tax credits would help us termendisly but at this point in time we cannot benefit from them as we are not married but cohabiting for 5 years.

So my question was is there any European law that could be identified that may show that by allowing married couples benifit from their relationship where unmarried ones cant, that it would be a possible breach of their rights?

Tzardine

sexmag wrote: »

....

It has only sparked my interest as my partner is not working currently as she is a full time carer to her son and her tax credits would help us termendisly but at this point in time we cannot benefit from them as we are not married but cohabiting for 5 years.......

Why not get married quietly in the registry office. Could be done quickly without any fuss and you can reap the benefits. If your partner is not working there is the potential to have quite a few extra quid in your pocket with the credits she is not using / rate band adjustment.

troyzer

sexmag wrote: »

That of course would be a concern but there would need to be ways to prove the legtimacy of it i.e. children etc

It has only sparked my interest as my partner is not working currently as she is a full time carer to her son and her tax credits would help us termendisly but at this point in time we cannot benefit from them as we are not married but cohabiting for 5 years.

So my question was is there any European law that could be identified that may show that by allowing married couples benifit from their relationship where unmarried ones cant, that it would be a possible breach of their rights?

Marriage is THE way of legally legitimising your relationship. That's the whole point of marriage going back thousands of years long before it took on a religious meaning or people getting married for love.

I don't understand how it breaches anyone's rights to deny legal recognition to relationships which don't want to avail of the avenue for attaining legal recognition. Which is basically what you're saying.

lawred2

sexmag wrote: »

That of course would be a concern but there would need to be ways to prove the legtimacy of it i.e. children etc

It has only sparked my interest as my partner is not working currently as she is a full time carer to her son and her tax credits would help us termendisly but at this point in time we cannot benefit from them as we are not married but cohabiting for 5 years.

So my question was is there any European law that could be identified that may show that by allowing married couples benifit from their relationship where unmarried ones cant, that it would be a possible breach of their rights?

Is there something preventing you from getting married?

Senature

As a person who has never been married and doesn't have children, it drives me bananas all the benefits and "special status" given to those who are parents and/or married. Why are they a more deserving citizen of benefits or favourable tax treatment than I am?!!

.......

sexmag wrote: »

So my question was is there any European law that could be identified that may show that by allowing married couples benifit from their relationship where unmarried ones cant, that it would be a possible breach of their rights?

If you want the benefits of marriage then you should, eh, get married.

.......

Senature wrote: »

As a person who has never been married and doesn't have children, it drives me bananas all the benefits and "special status" given to those who are parents and/or married. Why are they a more deserving citizen of benefits or favourable tax treatment than I am?!!

They are not.

You too, can choose to get married to a person of any gender you like.

troyzer

Senature wrote: »

As a person who has never been married and doesn't have children, it drives me bananas all the benefits and "special status" given to those who are parents and/or married. Why are they a more deserving citizen of benefits or favourable tax treatment than I am?!!

That's a seperate argument, one which I agree with you on. I don't mind it so much for having kids. There should be some state assistance to raising kids, it's in the interest of the state as a whole. But I don't like that just by heading down to the registry office I can save a few quid on tax every year.

lawred2

Senature wrote: »

As a person who has never been married and doesn't have children, it drives me bananas all the benefits and "special status" given to those who are parents and/or married. Why are they a more deserving citizen of benefits or favourable tax treatment than I am?!!

lol

well they are in general bringing the next generation of taxpayers in to the world..

the ones that will ultimately be contributing to your pension, travel pass, health care etc etc when you're all old and bitter and waving your stick at whomever looks at you..

sexmag

lawred2 wrote: »

Is there something preventing you from getting married?

Well at this point in time just for arguments sake our finances are severly stretched that we do not have 200 euro to pay the register to get married, tax benifits applied to me from her may have afforded us the option to get married but right now its out of reach

dudara

Revenue assess a couple separately until they are married. However, the DEASP (social welfare) will assess couples as a unit. I don’t understand how two different government bodies can have different approaches.

troyzer

sexmag wrote: »

Well at this point in time just for arguments sake our finances are severly stretched that we do not have 200 euro to pay the register to get married, tax benifits applied to me from her may have afforded us the option to get married but right now its out of reach

Getting married in a registry office is free.

troyzer

dudara wrote: »

Revenue assess a couple separately until they are married. However, the DEASP (social welfare) will assess couples as a unit. I don’t understand how two different government bodies can have different approaches.

DEASP is in a much stronger position to assess the validity of a claim over revenue I'd imagine. Considering that applying for benefits typically involves a face to face and documentation etc, establishing whether a relationship or not is legitimate probably isn't a big jump.

Whereas establishing it for tax purposes is probably much bigger considering that for most PAYE workers, they never deal directly with revenue.

sexmag

troyzer wrote: »

Getting married in a registry office is free.

http://www.citizensinformation.ie/en/birth_family_relationships/getting_married/notification_requirements_for_marriage.html

Cost
The standard notification fee is €200. This is non-refundable. There is a reduced notification fee of €50 for same-sex couples who are already in a civil partnership that is registered in Ireland and now wish to marry

Senature

troyzer wrote: »

That's a seperate argument, one which I agree with you on. I don't mind it so much for having kids. There should be some state assistance to raising kids, it's in the interest of the state as a whole. But I don't like that just by heading down to the registry office I can save a few quid on tax every year.

In relation to the op, there was a question of whether treating cohabiting couples differently to married couples could be against European law. What I mean is, why should any couple be treated more favourably than any individual? Should we not all be equal citizens in the eyes of the law? People who are not part of a couple are often financially disadvantaged as it is, often living alone, nobody to split the bills with, or help them out while they are between jobs or maybe studying or unwell etc.

Also quite surprised at the level of negative responses to my previous post. I'm guessing you are all mostly married with kids so are happy with the special status that brings you at other people's expense. I'm not buying the part about how we should all pay for kids as they will pay our healthcare etc in future. By the time I'm at that point the state benefits available will probably be minimal, and I'll be funding my own retirement including a massive health insurance premium!

wench

dudara wrote: »

Revenue assess a couple separately until they are married. However, the DEASP (social welfare) will assess couples as a unit. I don’t understand how two different government bodies can have different approaches.

They both stem from the same place, the constitutional protection of the family, which is based on marriage.


So Revenue's approach encourages marriage.

DEASP's is to not disincentive it. Otherwise two cohabiting people both claiming would get two full payments, where a couple get about 1.5 between them.

jester77

It's the exact same in Germany, cohabiting are not entitled to the better tax bands that married couples are entitled to.

However when it comes to welfare benefits, then you are considered the same :rolleyes: Your partners welfare benefits are means tested based on the cohabiting partners income.

.......

sexmag wrote: »

Well at this point in time just for arguments sake our finances are severly stretched that we do not have 200 euro to pay the register to get married, tax benifits applied to me from her may have afforded us the option to get married but right now its out of reach

You have to make an appointment to meet with the registrar in order to notify him/her of your intention to marry.

Usually the earliest appointment is a few months out. Then from the time you informing him/her - you have to wait at least 3 months before you get married.

So you would have 6+ months to save 200 euro between the 2 of you.

Mrs OBumble

Addle wrote: »

Is this true?
Marriage is as popular as ever.

Joint Assessment can be beneficial depending on how much a married couple earn, and how their earnings are split between them.

If you want to enjoy a positive benefit of being married, then marry.

So why do we face the negative consequence of the unmarried partner's income counting for social welfare entitlement then?

Surely it should be both or neither?

longgonesilver

dudara wrote: »

Revenue assess a couple separately until they are married. However, the DEASP (social welfare) will assess couples as a unit. I don’t understand how two different government bodies can have different approaches.

We used to have the same situation in relation to welfare payments marriages were recognised but co-habiting couples were not. Married couples were entitled to higher benefits.

The state lost the court case, at European level I think.

sexmag

....... wrote: »

You have to make an appointment to meet with the registrar in order to notify him/her of your intention to marry.

Usually the earliest appointment is a few months out. Then from the time you informing him/her - you have to wait at least 3 months before you get married.

So you would have 6+ months to save 200 euro between the 2 of you.

I work full time and she is on carers, every penny is accounted for, its not that simple to be honest but thats not in relation to my original op.

As another poster point out single people not benifiting however cohabiting have it worse off, both are taxed as single but social welfare take into account both incomes to means test.

So can anyone think of how giving married couple the benifit of each others tax credits may be in contradiction to european laws for cohabiting and also single people?

Spook_ie

OSI wrote: »

Don't forget that many benefits are assessable for tax, so if you did become joint assessable while you would benefit from shared credits and tax bands, you would also have to pay tax on benefits. Might not be quite the boost you're expecting.

Payments liable to tax


Taxable payments
Adoptive Benefit Taxable
Blind Pension Taxable
Carer's Allowance Taxable
Carer's Benefit Taxable
Constant Attendance Allowance (payable with Disablement Pension) Taxable
Deserted Wife's Benefit Taxable
Deserted Wife’s Allowance Taxable
Death Benefit Pension Taxable
Disablement Pension Taxable (except for child increases)
Guardian's Payment (Contributory) Taxable (on child's income)
Guardian's Payment (Non-Contributory) Taxable (on child's income)
Health and Safety Benefit Taxable (since 1 July 2013)
Illness Benefit Taxable (except for child increases)
Invalidity Pension Taxable
Incapacity Supplement Taxable (except for child increases)
Injury Benefit Taxable (except for child increases)
Jobseeker's Benefit and Short-Term Enterprise Allowance Taxable (first €13 per week excluded)
Maternity Benefit Taxable (since 1 July 2013)
One-Parent Family Payment Taxable
Partial Capacity Benefit Taxable
Paternity Benefit Taxable
State Pension (Contributory) Taxable
State Pension (Non-Contributory) Taxable
Widow’s, Widower’s or Surviving Civil Partner's (Contributory) Pension Taxable
Widow’s, Widower’s or Surviving Civil Partner's (Non-Contributory) Pension Taxable


Payments that are not taxed
Back to Work Family Dividend Not taxed
Child Benefit Not taxed
Disability Allowance Not taxed
Disablement Gratuity (lump sum payment) Not taxed
Domiciliary Care Allowance Not taxed
Farm Assist Not taxed
Working Family Payment (formerly Family Income Supplement) Not taxed
Fuel Allowance Not taxed
Household Benefits Scheme Not taxed
Jobseeker's Allowance Not taxed
Jobseeker's Benefit (paid to systematic short-term workers) Not taxed
Jobseeker's Transitional payment Not taxed
Pre-Retirement Allowance Not taxed
Supplementary Welfare Allowance Not taxed
Widowed or Surviving Civil Partner Grant Not taxed

TBF you have to pay tax on non exempt SW payments whether you are married or whatever

Addle

Tzardine wrote: »

When both people are working, the standard rate cut off is €69,100, and you can distribute it in whatever ratio between the two that you like.

This is not accurate.

Spook_ie

sexmag wrote: »

I work full time and she is on carers, every penny is accounted for, its not that simple to be honest but thats not in relation to my original op.

As another poster point out single people not benifiting however cohabiting have it worse off, both are taxed as single but social welfare take into account both incomes to means test.

So can anyone think of how giving married couple the benifit of each others tax credits may be in contradiction to european laws for cohabiting and also single people?

If it's home carer tax credit then you might get a shock if you muddy the waters too much

https://www.revenue.ie/en/personal-tax-credits-reliefs-and-exemptions/health-and-age/home-carer-credit/qualifying-for-home-carer-tax-credit.aspx

Qualifying for Home Carer Tax Credit
To claim the Home Carer Tax Credit you must care for a dependent person. You must also be married or in a civil partnership and be jointly assessed for Income Tax (IT).

The dependent person you care for must be either:

a child for whom you receive the child benefit payment from the Department of Employment Affairs and Social Protection (DEASP)
a person aged 65 years or over
a person who is permanently incapacitated due to mental or physical disability.

Tzardine

Addle wrote: »

This is not accurate.

It is very accurate. Here is a snip of the top of my 2018 tax credit cert.

.......

sexmag wrote: »

I work full time and she is on carers, every penny is accounted for, its not that simple to be honest but thats not in relation to my original op.

You could talk to the welfare officer and explain your predicament? See if he will stump up the 200?

You could borrow 200 euro and then pay it back out of the tax benefit you receive.

You could crowd fund it.

I actually see it as a bigger issue that the cost of getting married may put marriage out of reach for some.

The state dealing with cohabitation differently for non married versus married couples is an attempt to save tax payers money. I agree it should be consistent though.

Particularly in light of the Cohabitation Act (2011?) which allows for cohabiting couples to seek redress in the event of a breakup as though they had been married.

There are a lot of inconsistencies between different government depts though.

sexmag

Spook_ie wrote: »

If it's home carer tax credit then you might get a shock if you muddy the waters too much

https://www.revenue.ie/en/personal-tax-credits-reliefs-and-exemptions/health-and-age/home-carer-credit/qualifying-for-home-carer-tax-credit.aspx

This is not in relation to a home carers tax credit as we are not looking to claim that, my partner receives carers allowance or benifit(i cant remember which right now as she switched recently) for her son, the question that raised it was about her transferring to her working tax credits to me as a cohabiting couple which cannot be done, this in turn raised the question of how constituional was this in relation to european laws and the favourable treatment of persons over other people

dudara

troyzer wrote: »

DEASP is in a much stronger position to assess the validity of a claim over revenue I'd imagine. Considering that applying for benefits typically involves a face to face and documentation etc, establishing whether a relationship or not is legitimate probably isn't a big jump.

Whereas establishing it for tax purposes is probably much bigger considering that for most PAYE workers, they never deal directly with revenue.

A unified or consistent approach would help.

A unmarried couple can be denied social welfare assistance if one person is not working, but the working partner can’t avail of the others tax credits to help ease the burden, although this is something a married couple can do.

It’s discriminatory TBH.

sexmag

dudara wrote: »

A unified or consistent approach would help.

A unmarried couple can be denied social welfare assistance if one person is not working, but the working partner can’t avail of the others tax credits to help ease the burden, although this is something a married couple can do.

It’s discriminatory TBH.

Which is why I asked the questions about European rights and laws. Hopefully a legal eagle here knows of something or somewhere to start digging

Carawaystick

dudara wrote: »

A unified or consistent approach would help.

A unmarried couple can be denied social welfare assistance if one person is not working, but the working partner can’t avail of the others tax credits to help ease the burden, although this is something a married couple can do.

It’s discriminatory TBH.

Does the Social welfare approach would apply to siblings raising a child?

Peregrinus

dudara wrote: »

A unified or consistent approach would help.

A unmarried couple can be denied social welfare assistance if one person is not working, but the working partner can’t avail of the others tax credits to help ease the burden, although this is something a married couple can do.

It’s discriminatory TBH.

This is because tax and social welfare are two different systems with two different objectives, and different considerations are relevant to each.

In the social welfare system, they are looking at your needs. As such, any kind of direct or indirect suspport you are receiving from a partner is factored in to assessing your needs. It doesn't matter whether your partners has made a commitment to support you, or whether they are obliged to support you. All that matter is that they are, in fact, supporting you. (This could be direct support or it could be indirect support by, e.g., sharing accommodation expenses.)

Whereas in the tax system they are looking at your ability to contribute financial to society, and they take account of your prior commitments. Married couples are legally obliged to support one another, and furthermore have made public solemn commitments to do so. So that is factored into the calculation fo their tax liablities. Whereas non-married couples have no such obligation or commitment; they merely choose to support one another, a choice they can reverse at any time.

Basically, as others have said, marriage is the mechanism by which you seek legal, administrative, regulatory, etc recognition and support for the commitments you have made to your conjugal partner. If you want that legal, etc, recognition, marry; if you don't want it, don't marry. But if you choose not to marry you can't then complain that your commitment to support your partner goes unrecognised. You have chosen for it to go unrecognised.

Is there an EU law argument against it? I kind of doubt that. In general tax law is a jealously-guarded competence of the member states. As long as they afford the came tax treatment to other EU citizens as they afford to their own citizens, I don't think EU law is at all perscriptive about how member states should treat marriage and/or cohabitation in their income tax codes.