Brian Lenihan Jnr (Dublin West, Fianna Fail)

I will come to that in a moment. As a new payment affecting some 350,000 children, it is evident that a new system of administrative arrangements must be established to give effect to the supplement. As with any other payment scheme, care is taken at the planning stage to ensure it will operate in a streamlined way, which is done to facilitate the recipients of the payment so that, for example, they can have their payments paid directly into bank accounts or through post offices if that is preferred.

I assure the House that, having decided that the Department of Social and Family Affairs will be the agency through which my office will administer the early child care supplement, officials from my office have been in contact with the relevant officials in that Department since the supplement was announced in budget 2006. At this stage, plans for the introduction of the scheme are well in hand, as is the draft legislative provision, which I expect will be published shortly in the Social Welfare and Pensions Bill 2005.

I take this opportunity to clarify the position regarding when the first payments of the supplement will be made. It is my understanding — it has been confirmed to me by the Department of Social and Family Affairs — that the Department will be in a position to make the first early child care supplement payment on behalf of my office in late August 2006, with the second payment, which is due in September 2006, being paid at that time. To put it simply, for the sound reasons I have outlined, the first payment is expected to be made in August rather than June. I hope this statement clarifies the issue.

As the Taoiseach and I have said in recent days, the early child care supplement makes no distinction as to the income or employment status of the parents. This is deliberate. Some may be critical of this feature but the Government believes it is right that parents have a choice when it comes to child care. It is not the role of the State to tell parents which child care arrangements are best suited to their families. Rather, it is for the State to support them in such arrangements as are appropriate. Budget 2006 also included significant increases in child benefit and there will be a further opportunity for discussion on this matter in the context of the Social Welfare and Pensions Bill 2005.

On the question of childminders, which was raised by Deputy Catherine Murphy, childminders are an important sector of our child care services and, for many parents, are the preferred option. It is important that we recognise and support this resource. In this regard, the Government has introduced a new child-minding relief, legislative provision for which is set out in section 13 of the Finance Bill 2006. As a result, where an individual minds up to three children in the minder's own home, no tax will be payable on the child-minding earnings provided the amount is less than €10,000 per annum. Following the rent-a-room scheme model, if child-minding income exceeds €10,000, the total amount will be taxable as normal under self-assessment. To avail of the exemption, an individual will be obliged to make an annual tax return on the child-minding income and notify his or her city or county child care committee of the service.

While I appreciate Deputy Catherine Murphy's point about the HSE's role in the co-ordination and support of child-minding service, it has no specific assigned role in the context of this provision. The notification requirement is to the city or county child care committee, not the HSE. Regarding the overall figure arrived at, opinions can clearly differ as to what is appropriate but the cost and affordability of child care was a significant element in the debate that arose. In selecting a figure, I take it that the Minister for Finance was prudent not to further increase the cost of child-minding. The payment is only available to those who fall outside the current pre-school regulations. The new regulations I am about to promulgate will not affect the numbers involved, as it is up to a maximum of three other than children of the child-minder.

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