Did the budget help a widow with two young children?

I am a widow with two young children, in my second year of widowhood. I am in a good job and lucky enough to be able to support the three of us, even with reduced working hours.

I pay a significant amount of tax through my PAYE as the widow’s pension gets taxed that way. My take-home pay was significantly more when we were jointly assessed as a couple and I was caring for my sick husband.

Does the recent budget help the solo parent families from a tax viewpoint? And, where I lose out as one earner, is there any improvement to the social welfare support for me? Little has changed in our outgoings since four became three, and those kids are getting bigger and hungrier.

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Raising children is tough enough. Raising them on your own after having had to care for your husband when he was ill is a daunting challenge.

It’s at times like this that you hope a budget will deal a decisive blow in your favour, but, unfortunately for you and others who are financially vulnerable, this Government has sought to spread its largesse thinly and widely – hardly helped by the hospitality VAT cut last year limiting its room for manoeuvre this time around.

To make matters worse, although an exceptional tax credit is granted to new widows with children to try to ease the blow of two earners becoming one or the loss of joint assessment, the credit is phased down every year. And it does not appear to have been adjusted in the budget.

Although it will have been worth €3,600 to you the year after you were widowed, this drops to €3,150 in the second year of widowhood, €2,700 in year three, €2,250 in year four and €1,800 in year five.

This is on top of the annual widow’s tax credit, which replaces whatever other personal tax credit you might have been on previously. It is payable at €2,000 this year.

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This credit tends to keep pace with the single person’s tax credit so I am assuming it rises next year to €2,125.

You should also be eligible for the single person child carer credit as long as your children are under 18 or in full-time education over that age. It is worth €1,900 this year, but will rise to €2,025 next year.

You refer to the widow’s pension and you are certainly eligible for that. On the basis of what you say, you will be on the contributory pension – a payment that is available to you because of your PRSI record or your husband’s. In your case, I am assuming it is on the basis of your record.

I should say this pension has now been renamed the bereaved partner’s (contributory) pension. It’s not just because someone in social protection decided the word “widow” needed changing: the pension is, since last year, now available also to cohabiting couples where one partner has died.

If they don’t have children, they must have been together for five years, or, for those with dependent children, two years.

Widows under the age of 66 get between €252.60 and €259.50 weekly, depending on the number of PRSI stamps they have. Those over the age of 66 get a payment of between €286.60 and €299.30.

If, like you, they have dependent children, they get €58 a week for each child under the age of 12 and €78 for older children.

Anyway, along with most other welfare payments, this payment will rise by €10 from January of next year. So, if you are on the maximum payment for someone under 66, it will rise to €269.50 a week. And the payments for children rise by €6 a week – to €64 or €84 depending on the age of your children.

As a result, you will get an additional €22 a week, or just shy of €1,150 a year, unless one of your children turns 12 next year. It’s not nothing, but if, as you say, you are paying tax on this money, it doesn’t really stretch too far.

If your children are in childcare or after-school care with a creche that is signed up to the Government’s core funding model, that cost will come down next year but not until September.

On top of that, you will also benefit from the employee or earned income tax credit, which is rising by €125 a year to €2,125.

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There is also a benefit from the widening of the standard rate income tax band. As a widow, you pay 20 per cent income tax up to €48,000, which is better than the €44,000 for a single person, but short of the €53,000 you would have had as a married couple with one person working.

From January, your 20 per cent band will increase to €50,500, which will cut your tax bill by €500 as long as you are earning above that €50,500 level.

On the flip side, PRSI is rising for all employees although there will be a modest cut in your Universal Social Charge.

All told, you will be around €950 better off next year, leaving aside childcare, which may or may not be relevant.

Please send your queries to Dominic Coyle, Q&A, The Irish Times, 24-28 Tara Street, Dublin 2, or by email to dominic.coyle@irishtimes.com with a contact phone number. This column is a reader service and is not intended to replace professional advice.