Revenue working on child benefit tax plan
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PLANS to tax child benefit are already under way -- even before the Commission on Taxation reports its findings.
The commission was tasked with reporting on the possible means-testing or taxation of the benefit in last April's crisis Budget. It is due to report by the end of next month.
But the Department of Finance has been privately working with the Revenue Commissioners for weeks to devise a system for taxing the payment on the basis of household income, the Irish Independent has learned. Any such move is likely to result in a gender row over treating stay-at-home spouses as merely an adjunct to the income earner.
Social Affairs Minister Mary Hanafin has confirmed means-testing would present huge logistical difficulties, with more than 600,000 households in receipt of the payments at a cost to the State of €2.5bn a year. She also said the method of taxing the benefit was being studied. But taxation could present anomalies between married couples and recipients who are nominally single.
The Government has been warned that the taxation of child benefit will act as a further disincentive to work, prompting people to remain dependent on social welfare.
- Senan Molony
