Brian Cowen (Laois-Offaly, Fianna Fail)

I assume what the Deputy mainly has in mind is support through the tax system for child care. The Government's policy is that child benefit is the main instrument through which support is provided for parents with children. One of the main advantages of this approach is that whereas tax relief would be of little or no benefit to those with low incomes, the provision of support for parents through the child benefit route means equality of treatment for all recipients.

The Government has substantially increased child benefit since coming into office in 1997. Overall expenditure on child benefit has increased by 279% from €506 million when the Government came into office in 1997 to an estimated €1,916 million in 2005. On the supply side, the provision of formal child care places is being stimulated through a programme of investment under the national development plan equal opportunities childcare programme, about which there were further announcements today. Over the next five years, about 17,000 places are expected to be created under this programme. The Government has also undertaken measures to favour the supply of child care by tax incentives to set up facilities and relief from benefit-in-kind taxation for free or subsidised child care where this is provided by employers. Taken together, these represent substantial measures to assist with the cost of child care.

In addition, the tax system treats parents with dependent children more favourably than persons with no dependent children, in recognition of the additional financial burden associated with parenthood. This is done mainly through the one parent family tax credit, the widowed parent tax credit, the incapacitated child tax credit and the home carer tax credit. Persons who qualify for the one parent family tax credit, including widowed parents, qualify for the associated standard rate band cut-off point which is €33,400 in 2005. This is €4,000 greater than that which applies for a single person.

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