Fine Gael have pledged to begin easing the effects of tax individualisation if they are in Government after the General Election. Their plan involves increasing the stay-at-home tax credit, currently worth €770 pa, by €1000 pa. The proposal is in line with the tax policy document launched by the Iona Institute which called for the Government to begin closing the tax gap between double and single income married couples.

Launching their tax policy in Limerick yesterday, Fine Gael Finance spokesman Richard Bruton TD said that tax concessions to two income families “had gone far enough and should go no further”. However, he denied that the plan was intended to reverse the tax individualisation brought in by Charlie McCreevy in 1999.

The announcement coincided with a call by Labour Finance spokesperson Joan Burton TD for the stay-at-home carers tax credit to be increased to €1770. At the launch of the Iona Institute’s first policy document, entitled “Tax Individualisation: Time for a Critical Rethink” Deputy Burton said that she believed that the policy outlined would become part of any coalition policy involving Labour and Fine Gael.

The document, written by barrister John P Byrne, highlighted the fact that single income married couples can now pay up to €6,240 more in tax than a double income couple on the same income. While PAYE tax credits had steadily increased since individualisation was introduced in 1999, the stay-at-home carers credit had remained the same, the document points out.

With both main Opposition parties now targeting single income families, tax individualisations seems set to become a key battleground in the coming election.