Richard Bruton (Dublin North Central, Fine Gael)

I move amendment No. 9:

In page 13, between lines 25* and 26*, to insert the following:

"

Section 466A (home carer's allowance)

€770.00

€1,760.00

".

Amendment No. 9 was also tabled on Committee Stage. However, its subject matter is of sufficient importance that it warrants a debate in the House. It relates to the tax policy we have developed in respect of families in recent years. For most families, trying to rear children is quite tough. In the majority of instances, both parents are obliged to work in order to fund the cost of a mortgage. Most parents are under pressure to work and can at best take a short break from their place of employment.

In my constituency — I am sure the position is similar in that of the Minister — parents who devote their entire child benefit and under six payments towards the cost of child care still come up approximately €145 short per week. The latter converts into a gross annual income of €13,500. If there are two children in a family, the parents must find €27,000 to fund continuing child care for them. Given that the average industrial wage is between €32,000 to €34,000, there is virtually nothing left for people who go out to work. Many parents find themselves under extreme pressure as a result and quite a number of them decide to opt for home caring. They see benefits in choosing the latter course, particularly from the point of view of being able to spend time with their children in their formative years and also in light of the economic reality of the high cost of child care.

What happens when parents consider taking the home care option for a few years in order to look after their children? They are immediately hit with a penalty on their tax credits of €990. In addition, under the terms of individualisation they lose an amount that could rise up to €5,250 on their tax bands. A massive tax penalty of €6,240 is, therefore, imposed when a person opts to give up work and become a home carer. This begs the question as to the sort of policy we are trying to develop in respect of families. Most other European countries recognise that supporting parents in the task of rearing children is of huge importance and is worthy of considerable state support. However, we appear to take a different view. We offer minimal support and we put in place tax penalties in respect of those who opt to become home carers for short periods.

The situation is even worse when one considers the way in which the tax and welfare system treats parents. It does not treat those who try to stay together and share the responsibility of parenting in an equitable way. If parents separate, they are treated much more favourably under the tax code and can qualify for four tax credits. If they remain together, they qualify for, at best, two such credits. If they are partners who are not married, they may only qualify for one tax credit. In the context of the social welfare system, we have not evolved a way of dealing with the anomalies regarding people who are single parents and those who are involved in joint parenting. We must develop new thinking in the context of how we treat families and how we might use the tax and welfare code in a more joined-up way to help parents to care for their children in an effective manner.

Developments in this area must go beyond tax and welfare law and enter the realm of employment law, where scant regard has been paid to parents who try to get time off to deal with significant family events or issues that arise on foot of their having young children. We must engage in a fresh examination of this matter and develop a structure that is more supportive of families. The success of families in rearing their children represents what we pass on to the next generation. It is the key test as regards the measure of our legacy. There are far too many children who fall by the wayside under the current model and we do not have the systems in place to identify them. A great deal of what passes for child policy represents a mere reaction to crises. We should, rather, try to anticipate such crises and create environments in which children can succeed. Many policies are developed within rigid silos, with no thought given to the links that must be created.

It is important that we should begin to roll back on the current system. The amendment makes a simple and straightforward proposal, namely, that home carers should enjoy the same tax credits as those who opt to work outside the home. This would involve increasing the tax credit for home carers by €990. People would then be in a position to make a choice and would not be penalised for doing so. Under the amendment, if people want to be home carers for a number of years, they will be treated as workers in the home. If they opt to work outside the home, they will be treated as they are at present. People would then, at least as far as credits are concerned, enjoy the same tax treatment.

We must also consider rolling back on the impact of individualisation further up the line. Much of the drive in favour of individualisation emanated from people who, through our social partnership model, have the ear of the Government. The needs of employers, producers and the trade unions, rather than those of families and people trying to deal with the consequences of changes in tax policy, are far too much to the fore under this model.

The amendment represents a modest start in an area in respect of which it is important that we should reclaim ground by putting in place a solid, family-based policy. The State opted out of taking action in this area for a long period and regarded its main concern as ensuring that our economic model remained intact. However, the State has an important role that has been overlooked. In that context, I hope the Minister is of the view that the amendment is worthy of support.

See this speech in context