Dominic Hannigan (Meath East, Labour)
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497. To ask the Minister for Children and Youth Affairs if he has had any communication with the Department of Finance regarding the possibility of a child care tax credit in budget 2016; and if he will make a statement on the matter. [29052/15]

James Reilly (Dublin North, Fine Gael)
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Funding of more than a quarter of a billion euro is provided annually by my Department towards childcare. All childcare programmes supported by my Department currently provide funding directly to childcare providers, either in the form of capitation or subvention payments. This kind of funding mechanism provides the leverage to progressively build the quality of childcare provision, while at the same time making childcare more affordable.

The question of tax allowances for parents was considered prior to the introduction of these childcare programmes. A number of issues emerged at that time which did not favour the introduction of a childcare tax credit. For example, the introduction of a tax credit would not help to support quality improvements within the early years sector and would not help those families on low pay who may not have any tax liability. There is also concern that the application of tax credits could lead to increased prices and therefore have limited impact in terms of savings to parents.

Options for future investment in childcare, including childcare tax credits, are currently being considered by the Inter-Departmental Group on Future Investment in Early Years and After-School Care and Education, which I established in February this year. This Inter-Departmental Group, which is tasked with setting out a range of options for current and future investment, will consider options to enhance affordability, options to increase the accessibility of provision and options to build the quality of provision and support the sustainability of the early years sector. It will submit a series of recommendations to Government shortly.

These recommendations will be considered as part of the upcoming annual estimates cycle and budgetary process. It is not possible for me to comment at this time on what future decisions may be taken by Government in the context of Budget 2016.