Tax and welfare systems “unfairly treat” cohabiting couples

By Mary Dennehy

CALLS have been made for the Government to tackle the “unfair and discriminatory” treatment that unmarried cohabitating couples receive in the tax and social welfare systems.

Dublin South West TD Sean Crowe has this week highlighted that a couple cohabiting under the current system cannot claim certain tax credits and share their tax liabilities.

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However, the social welfare system treats them the same as married couples.

“Our current tax system discriminates against cohabiting couples who are not married and do not want to marry, but the social welfare system treats them the same as married couples”, Deputy Crowe said.

 “This is an unfair system and it needs reform.”

He added: “This means [couples] cannot transfer unused tax credits or their standard cut-off points.

“They cannot claim home carers tax credits and they cannot claim tax for a partner who might be on low pay or out of work.

“A married couple or those in a civil partnership can be financially better off by 20 per cent, a substantial amount in anyone’s estimation.

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Deputy Sean Crowe has called for 'reform'

“Such a considerable saving is important for a couple who are more than likely caught in the current rental and housing crisis, and like many others, paying a small fortune for accommodation.

“If a partner in a cohabiting relationship gets ill, it falls on the other half in the relationship to nurture and financially provide without any active support or help from the State. If the partner dies and there is a shared property there is a substantial inheritance tax burden to be carried by the surviving partner.

“Their cohabiting status is however means tested and taken into full account by the current social welfare system if a partner is made redundant or in need of state supports and assistance.”

He added that if a person is cohabiting and gets sick, an application for a full or doctor only medical card is means tested and your partner’s income and assets will be decisive in whether a person gets a medical card or not.

“Our current tax system denies cohabiting couples fair treatment, while our social welfare system goes to great lengths to try monitor relationships and cohabiting status of couples”, Deputy Crowe said.

“As a legislator I find this demeaning and totally wrong.”

'Radical reform' needed 

According to the Dublin South West TD, the current system needs radical reform, with a new approach needed – particularly from the Minister for Finance and Social Protection.

“They need to collectively work together and come up with common sense and practical solutions that will end this unfair system that impacts so negatively against cohabiting couples”, Deputy Crowe said.

“We should not have a system that supports one couple and discriminates against another because they have a piece of paper that says they are married or are in a civil partnership.”

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