Dinny McGinley (Donegal South West, Fine Gael)
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Question 34: To ask the Minister for Finance if he is satisfied regarding the tax treatment of families with children to support. [24906/06]

Brian Cowen (Laois-Offaly, Fianna Fail)
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This Government acknowledge the continuing cost pressures on parents, particularly those with young children.

The Government have substantially increased Child Benefit since coming into office in 1997. From April this year Child Benefit payments have increased to €150 per month for the first and second children and €185 for the third and subsequent children. Overall expenditure on Child Benefit has increased by 279% from €506 million in 1997 to just over €2 billion in 2006.

In addition, in Budget 2006 I announced a new Early Childcare Supplement of €1,000 in a full year for each child up to his or her sixth birthday. This new payment, along with increases in Child Benefit, brings the amount a family will receive, for each of the first two children under six years, to €2,800 per year, equivalent to over €50 per week in direct financial tax exempt support. This will be even higher where a family has more than two children under six.

On the supply side, the provision of formal childcare places is being stimulated through a programme of investment under the new five year National Childcare Investment Programme which I announced in Budget 2006. When combined with the existing Equal Opportunities Childcare Programme, this means that between 2006 and 2010 some 65,000 additional places will be funded.

In total, over €2.5 billion extra will be invested in the area of child support over the next five years.

Measures have also been taken by the Government to favour the supply of childcare by tax incentives to set up facilities and provide relief from benefit-in-kind taxation for free or subsidised childcare where this is provided by employers. Taken together, these represent substantial measures to assist with the cost of childcare.

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. Also, 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 €36,000 in 2006. This is €4,000 greater than that which applies for a single person.