Discounts for children. How many families will gain and how to lose? – Money.pl

Discounts for children. How many families will gain and how to lose? – Money.pl

[Photo: PAP / Barbara Ostrowska]

The introduction prepared by the Ministry of Finance the changes will benefit 1.5 million families and the costs for the budget could amount to 1.5 billion zł – assesses the Centre for Economic Analysis CenEA. Some will lose the new rules.

The idea announced by Prime Minister Donald Tusk and prepared by the Ministry of Finance a project to increase by 20 percent. education tax credit for the third and subsequent child. The change is intended to allow the use of full credit to those who previously showed too little tax to fully settle it.

CenEA reported in a report made available to the PAP, that the changes even families with very low incomes from work could benefit from the advantages tax related to having children. According to the Center in 2013. Roughly one-third of families with children had incomes too low to take full advantage of relief.

The report stated that the relief will be a so-called. reimbursements for tax relief – the height will not exceed the amount of accrued income tax. Taxpayers raising children, for which the value of input tax will be conferred lower than the maximum value of the child tax credit will receive a refund of the difference, limited the amount paid by them, and health insurance premiums (ZUS and the NFZ).

By CenEA advantage of this solution is that by significantly increasing the amount of income among families with low income can encourage parents to work or increase activity.

budgetary implications of new solutions may, however, significantly exceed the costs estimated by the Ministry of Finance. As shown CenEA analysis based on microsimulation model SIMPL, tax revenues may fall as a result of changes in 1.8 billion zł per year instead of 1.1 billion zł, which assumes MF – written in the message. According to the Ministry of Finance CenEA underestimated the number of children for which parents will be able to deduct the tax relief in a new form.

The Institute noted that the estimates were based on a representative sample of households. According CenEA the total cost of the reform to the public finances would be around 1.5 billion zł per year. Thanks to the higher relief will increase the net income because some families with children, which will affect their right to benefit from state support under the family benefits. As a result, the payment of family benefits will be smaller.

– In connection with obtaining tax benefits and increase in net income above the income criterion for entitlement to family benefits, the total income of about 70 thousand. families with children have fallen as a result of the proposed changes in the functioning of relief – noted in a statement.

calculated that in the case of a family with three children in which both parents are working for minimum wage (1680 zł gross month), the tax benefits would amount to 187,60 zł per month. However, this would increase the net income of such a family than a criterion taken into account in the allocation of family benefits, which she would lose all benefits currently received. As a result of its disposable income would decrease by 154.08 zł per month.

A similar situation apply to a family with four children, where only one spouse works, yielding 3700 zł gross income per month. In connection with the receipt of relief more about 362,50 zł, the family would lose 589 zł family benefits, which would reduce her monthly disposable income of 226.50 zł.

– Proposed changes significantly affect the situation material families with low incomes who are unable in the current system to fully benefit from the tax credit for children. At the same time, supporting families through the tax system will continue to be dependent on the amount of income from employment, and therefore a new form of relief can result in increasing the financial attractiveness of work and encourage parents to take up or increase the activity – rated in the commentary director CenEA Dr. Michal Myck.

He stressed that the problem of the Polish financial system of family support is still a threshold withdrawal of family benefits. – for about 70 thousand. families with children less taxation can result in loss of entitlement to family benefits, the new form of relief will not compensate. Paradoxically, therefore, for these families, lower taxes will mean less disposable income – added Myck.

Press Office of the Ministry of Finance informed PAP that the calculation of the budgetary impact of the introduction of relief was based on data from the annual PIT testimony submitted by taxpayers for 2012. were not included when the impact of the introduction of solutions to family benefits. According to the Ministry of Finance estimate is, however, burdened with uncertainties resulting from several factors.

The point is the number of children who take into account taxpayers in tax returns. According to the ministry of the family that could not take advantage of the full credit may not show in the accounts of all the children they have. According to preliminary data for 2013. Shows that between 2012 and 2013. Number of children who take into account taxpayers tax returns fell by approx. 350 thousand.

MF explained that the calculation of changes in net income per capita in family was carried out using data on income taxable year 2012 was assumed that all eligible benefit from the possibility of write-off amount of relief under the new rules. Resort stressed that the return of relief to the amount of premiums paid Social Security and National Health Fund depends on the decision of the taxpayer, because relief is a privilege, not a duty.

– In the event that an increase in disposable income has lead to exceeding the income criterion entitlement to family benefits, the taxpayer decide whether to use a copy of the new rules, whether to remain a beneficiary of family benefits. Received by the taxpayer of the amount of unused child tax credit will be included in the determination of income for the purpose of determining entitlement to family benefits for this group of taxpayers – added.

According to the Ministry of Finance to introduce the proposed solutions may also involve difficult to predict behavioral change parts taxpayers with children. Taxpayers who are in the current system does not have all the children on your tax return (eg. They have too low a tax, in order to fully benefit from relief to three children), after conducting new solutions may still have them, if they consider that the benefits from receiving family benefits are higher than the relief.