837. Deputy Ged Nash asked the Tánaiste and Minister for Finance if he plans to legislate to give effect to personal taxation implications of the Supreme Court judgment in a case (details supplied); and if he will make a statement on the matter. [63487/26]

As the Deputy is aware, in January 2024, the Supreme Court delivered its judgment on the entitlement of an unmarried cohabitant to a widow's, widower's or surviving civil partner's contributory pension. The Supreme Court judgment found in favour of the claimant, Mr. O'Meara, and his children. The court found that section 124 of the Social Welfare Consolidation Act 2005, as amended, was inconsistent with the Constitution insofar as it excluded Mr. O'Meara from the category of persons entitled to benefit from it. The court reached that conclusion on the basis of the equality guarantee contained in Article 40.1 of the Constitution. On foot of this judgement the Social Welfare (Bereaved Partners and Miscellaneous Provisions) Act 2025 extended eligibility for the payment to qualified cohabitants who have been in an intimate and committed relationship for a period of two years where there is a child or children of the relationship, or five years if otherwise. The scheme was also renamed the Bereaved Partner’s (Contributory) Pension.

For the purposes of income tax in circumstances where a couple is cohabiting, rather than married or in a civil partnership, they are treated as separate and unconnected individuals. Each partner is a separate entity for tax purposes, therefore, cohabiting couples cannot file joint assessment tax returns or share their tax credits and tax bands in the same manner as married couples.

The basis for the current income tax treatment of couples derives from the Supreme Court decision in Murphy vs. Attorney General (1980). This decision was based on Article 41.3.1 of the Constitution where the State pledges to protect the institution of marriage. The decision held that it was contrary to the Constitution for a married couple, both of whom are working, to pay more tax than two single people living together and having the same income. The Constitutional protection of Article 41.3.1 does not extend to non-married couples.

The tax treatment of couples was reviewed and considered as part of the 2020 Tax Strategy Group process. The Income Tax TSG Paper included an overview of the tax treatment of couples and outlined the rationale for the different treatment between married couples/civil partnerships and cohabiting couples. Further details can be located at the following link: [www.gov.ie/en/publication/fdd38-budget-2021-tsg-papers/].

The report of the Commission on Taxation and Welfare put forward no recommendation regarding the tax treatment of cohabiting couples. However, it did recommend a phased move towards individualisation of the Standard Rate Cut Off Point as a step towards addressing disparities in the income tax system, facilitating increased employment, and decreasing the gap in the employment rate between men and women.

Should this occur, couples that are married or in a civil partnership would no longer be treated differently to cohabitants as each person would be treated as a single taxpayer without the option of being jointly assessed.

It should be noted that both the PRSI and USC are already applied on an individualised basis.