John Cregan (Limerick West, Fianna Fail)
Link to this: Individually | In context

Question 92: To ask the Tánaiste and Minister for Finance the situation regarding the ongoing campaign for crèche charges to be tax deductible; the reasoning and decision to reflect this when decided on by Cabinet in 2006; the position regarding actions to assist parents with child care costs at that time; and if he will make a statement on the matter. [18355/07]

Brian Cowen (Laois-Offaly, Fianna Fail)
Link to this: Individually | In context

As the Deputy will be aware, this Government acknowledges the continuing cost pressures on parents, particularly those with young children. Childcare is probably the single biggest issue facing working parents today. That is why in Budget 2006 the Government introduced a suite of support measures in tandem with further increases in Child Benefit payments. These support measures include the Early Childcare Supplement of €1,000 in a full year for each child up to his or her sixth birthday, a five-year National Childcare Investment Programme which aims to fund an additional 50,000 childcare places by 2010, as well as extended paid and unpaid maternity leave.

From April of this year, Child Benefit payment rates increased to €160 per month for the first and second child and to €195 for each additional child. These Child Benefit payment levels represent a 321% increase in the rate for the first and second child over the prevailing rate in 1997 and a 294% increase in the rate for each additional child. By comparison, during this period the increase in the consumer price index is estimated to be 38%.

In addition, as part of the Government's strategy to increase the supply of childcare, I introduced an income tax exemption in Budget 2006 for income of up to €10,000 per year from childminding where individuals mind up to three children, who are not their own, in the minder's own home. I have now increased the exemption limit in 2007 from €10,000 to €15,000 per year.

As the Deputy will appreciate, I receive numerous requests for the introduction of new tax reliefs and the extension of existing ones. I must be mindful of the public finances and the many demands on the Exchequer. Tax reliefs, no matter how worthwhile in themselves, reduce the tax base and make general reform of the tax system that much more difficult. However, I believe that the measures outlined above demonstrate the Government's ongoing commitment in the area of childcare.