Written answers

Tuesday, 3 November 2015

Photo of Derek KeatingDerek Keating (Dublin Mid West, Fine Gael)
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329. To ask the Minister for Finance if he has considered the introduction of tax relief for child care costs (details supplied). [38132/15]

Photo of Michael NoonanMichael Noonan (Limerick City, Fine Gael)
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As the Deputy may be aware, an Inter-Departmental Working Group was established by the Minister for Children and Youth Affairs to identify and assess policies and future options for increasing the quality, accessibility (including supply) and affordability of early years and school-age care and education services. The group published its report in July 2015 and a copy of the report is available on the website of the Department of Children and Youth Affairs at.

In that report, while tax credits and/or fee subsidies were ranked very highly by parents as a key measure to improving affordability of child care, the group recommended that direct subsidies would be a more effective way of targeting scarce Government resources. Among the many arguments against the introduction of tax relief was the fact that tax relief is only of benefit to those in the tax net and it is estimated that in 2016, 36% of income earners will be exempt from income tax altogether. It was also argued that any tax relief would most likely be absorbed by child care providers in the form of higher prices. Whilst a credit based on a range of take-up and eligibility assumptions was considered (with tentative costings in the range of €290 million to €592 million per annum), pursuit of this option was not recommended.

The Deputy will also be aware of measures that were announced in Budget 2016 in relation to child care, which are set out below for his information.

The Early Childhood Care and Education Scheme has been extended to provide that children will be eligible for free child care from three years of age up until they are five and a half, or until they start primary school. In addition, over €15 million in new funding has been provided to facilitate the full participation of children with disabilities in the scheme.

To support parents in low paid employment, or in training and education, 8,000 places have been created through the Community Childcare Subvention Programme. To assist with after school care, €3 million has been allocated to develop after school services in school buildings. Child Benefit has been increased by €5 a month and a commitment has been given to introduce statutory paternity leave of two weeks from September 2016.

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