Income Tax

“There’s a strong case to be made that co-habiting couples fare out worst in all scenarios,” says Marian Ryan, of Taxback.com. “They cannot avail of the benefits of joint assessment which allow sharing of tax credits, rates and bands". 

“A single person will pay 20pc PAYE on the first €35,300 of their income and 40pc on the balance. If a married couple are both working, they would be entitled to earn a combined total of €70,600 at the 20pc rate, assuming both partners are earning over €26,300”. 

It’s a significant advantage if one spouse is a low-income earner and has unused tax credits as the higher-earning spouse can share them and pay less tax. 

Home Carer Tax Credit

This benefit, worth €1,600 per annum, can only be claimed by a married working spouse (or civil partner) where their other half stays at home to mind their children. 

Single Parent Tax Credit 

Introduced in 2014 this replaced the One Parent Family Tax Credit and has a value of €1,650 per annum plus an increased 20pc tax rate band of €4,000. “The unfortunate thing is that it is only available to the primary carer (99pc of the time it’s the mother) which means single fathers cannot avail of the credit,” says Marian, adding that under the previous arrangement both (single) parents could claim it. “If you happen to be in a relationship and have children, but are not married, you cannot avail of either this or the Home Carer’s Credit,” she adds.

Getting Married

Even the process of getting hitched can result in a tax refund if there’s a gap in incomes in the first year of marriage. “If both spouses are earning over the €35,000, the refund might be small, but there is never a negative to being jointly assessed.” 

Inheritance Tax

Spouses can transfer all of their assets to each other free of tax as gifts or inheritances but there’s a significant potential tax bill if you’re unmarried. “The unfairness around inheritance is hugely weighted against single/co-habiting people,” says Mike Knightson of KM Financial, who offers an example:

A house owned by an unmarried couple, worth €256,000 with half the mortgage paid off when one of them dies, means the mortgage protection (life) policy would pay out. But inheritance tax of €32,983 is due by the remaining partner who is only permitted a Class C tax exemption of €16,250. 

There are life insurance policies you can take out to mitigate against the tax bill, under a ‘life of another’ arrangement, but these obviously add a cost in themselves, and are price dependent on age and health. In addition, adds Mr Knightson, you’re now reduced to one income, and a bill to pay off, so home-owners definitely need extra financial advice around this if they’re not married.” 

Car Insurance

It may seem anomalous, but insurers often give a discount on your own insurance where a spouse or partner is an additional driver. Single people cannot generally benefit from this. 

Pensions

A person cannot apply for a widow’s pension in the event that their unmarried partner dies. It is only available to spouses or those in civil partnerships. 

Approved Retirement Funds (ARFs) can form part of the estate after a person dies, but it is subject to inheritance tax if the recipient is not the spouse/civil partner of the deceased person, at 33pc. There is no tax if it is left to a spouse.

Medicines

The Drugs Payment Scheme limits the amount anyone pays for prescription medicines to €114 per month. However this is a family limit, so a single person must spend up to that amount, while a couple with children can include all medicines within the DPS limit. 

Fair Deal

When a married person enters a nursing home under Fair Deal only half of their assets (3.75pc per annum) and income (40pc per annum) is taken to contribute toward their care while their spouse remains in the family home. 

A single person must contribute at the full rate – 7.5pc of assets and 80pc of income every year. 

Mortgages

The Help to Buy scheme helps first-time buyers to a maximum of €30,000 toward the purchase of a new, first home.

However, it is based on a refund of the previous four years’ tax. A single person is far less likely to have paid this amount than a couple. 

In addition, single people find that the Macroprudential rules around loan-to-income ratios affects them considerably more. An applicant can only borrow up to 3.5 times their income, but in a joint application this amount is based on both salaries.

Shortcuts – Flying Solo

Are sun, sea and sand beckoning now that travelling abroad is back on the cards? Well, if you’re only packing one bag, you could find yourself paying more. The dreaded ‘single supplement’ is the bane of solo travellers’ lives and a costly addition to any holiday.

A solo traveller on a cruise used to be referred to as ‘spoilage’. The distasteful term isn’t used any more says Paul Hackett, CEO of Click and Go, but the single supplement remains “a tetchy subject”.

“Hoteliers and cruise lines effectively work their forecasts on rooms and cabins as being one unit for the most part. If two people are sharing the rate is halved but if one person is travelling they want the same revenue so it is not intentional to punish the solo traveller. But someone has to pay for the room, be that one person, two people or more. This is especially the case during peak travel periods. If we take an average unit of accommodation (not a cruise) is approximately €100-€120 per night, then the sole occupancy supplement is usually €50 to €60 per night.”

He says there are options. Many hotels now (especially in America) charge by the room, irrespective of the number of occupants.

“Norwegian Cruise lines have studios for singles and an area on the ship where the studios are located. These are built for one person and priced for one person. They are cheaper than a standard cabin for sole occupancy.”

And, of course, when you’re flying solo, you can avoid the dreaded middle seat!