Rules that treat unmarried cohabiting couples less favourably when it comes to tax and inheritance than people who are married should be changed, a survey has found.
The findings come as Minister for Finance Paschal Donohoe is weighing options for the budget that he will present in a month’s time.
The survey by Royal London found that almost 90 per cent of Irish people back a change in the current rules that effectively discriminate against cohabiting couples, though a significant proportion do think there should be some rules in place.
While 43 per cent do not think there should be any limit on cohabiting couples having equal tax treatment with their married counterparts or those in civil partnerships, 12 per cent said it should apply only to couples with children. A further third backed “longevity” criteria, with 6 per cent happy to see parity of taxation for couples that have been in a relationship for two years, a further 14 per cent wanting to wait until they have been together five years and 13 per cent holding out for a decade.
Orla Tinsley: The reality of having to fight for basic rights from all angles is exhausting
Dancing with the Stars 2025: Who are the contestants, when is it on and more
When the Nazis occupied Paris, his colleagues fled, but 84-year-old Sparrow Robertson kept filing his sports column
Joe Humphreys: Lessons in philosophy from Sally Rooney’s latest novel that can help us make sense of the world
Thirteen per cent of respondents were happy with the status quo and said couples should be married to secure beneficial tax treatment.
Pension and inheritance
When it comes to allowing a surviving partner to be eligible for a widow or widower’s pension, the figures are broadly the same, though a slightly larger number of respondents said the cohabiting couple should have been together for five or 10 years in order to qualify.
Those in the 25-34 age group were most in favour of the proposals – with half seeing no need for any restrictions when it comes to tax and a further 38 per cent open to the idea with some qualifying criteria. The next most supportive group was people over the age of 55.
People aged between 35 and 44 were least supportive of change in tax treatment, with just 38 per cent backing such a move without restriction and 15 per cent saying people should marry if they want to be treated more favourably.
“There’s not much difference in viewpoints across the different age brackets,” Karen Gallagher, interim head of proposition at Royal London Ireland said. “This suggests that most people in this day and age realise that relationships and families come in many shapes and forms so perhaps the legislation should change to reflect this.”
As it stands, cohabiting couples cannot be jointly assessed for income tax. If one dies, they are also not eligible for pension payments – such as the widow(er)’s State pension – and are treated as strangers in terms of inheritance. That means they are taxed on anything over €16,250 that they inherit. And if there is no will, they are not automatically entitled to anything. By contrast, a surviving spouse has a legal right of inheritance and anything they receive is not taxed regardless of value.
Although data from the latest census is not yet available, Royal London notes that the number of cohabiting couples is rising, with 152,000 couples in that position at the time of the 2016 census, representing one in eight Irish families. That figure was 6 per cent more than in the 2011 census.
