The 2012 Budget, announced yesterday, is the first since the introduction of tax individualisation in 2000 not to 
further widen the tax gap between one-income married couples and double-income married couples.
The Budget, which introduced cuts in a number of areas, did not change income tax rates at all, meaning that the position of single income couples was not worsened.
Under the last Government’s four year Budgetary Plan, announced last November, single income married couples were to lose out in each successive budget as against double income couples and single people.
According to the plan, by 2014 the net pay for a married one-income family on €55,000 would be reduced by €2,310 per annum (€44 per week) or 5.4 per cent compared with €1860 for a single person on €55,000.
According to figures from Social Justice Ireland, in 2012, a one-income couple on €60,000 with two children will have an effective tax rate of 26.2 pc. This compares with an effective tax rate of 16.8 pc for a two-income couple, also with two children, where one parent earns €40,000 and the other earns €20,000.
In 2000, when tax individualisation began to be phased in, there was almost no difference in the effective tax rate of the two couples.
In response to questions from the Irish Catholic during the last election campaign, Fine Gael said it favoured improving the position of one-income married couples in respect of tax individualisation.
Meanwhile, lone parent charity One Family attacked the Government’s plan to reform the One Parent Family Allowance, saying that the Budget had “abandoned” the poorest families, and left them to “face the worst”.
Under the Government’s reforms of the single parent benefit, the upper age limit of the youngest child for new claimants of the payment will be reduced to seven years on a phased basis. By 2014, parents of children aged seven will be deemed available for work.
The reforms also reduce the amount of income that a lone parent can earn while still being allowed to claim the full single parent benefit from €146 to €130 per week in 2012 and to €60 over a five year period, by 2016.
