Dáil Éireann debate -
Tuesday, 12 Feb 2002

Vol. 548 No. 2

Written Answers. - Tax Reliefs.

Willie Penrose

Question:

203 Mr. Penrose asked the Minister for Finance the tax relief or incentives available to parents, who are paying substantial amounts of money in order to get their children looked after in crèches; and if he will make a statement on the matter. [4196/02]

Minister for Finance (Mr. McCreevy)

There is no income tax relief available to individuals in respect of payments made by them to crèches. However, since 6 April 1999, there is an exemption to the usual benefit-in-kind provisions for employees who enjoy free or subsidised child care facilities provided by their employers. The benefit-in-kind exemption applies whether the employer provides the facilities "in-house" or in a premises made available by the employer in another location which suits the employer and employees. The exemption also applies if an employer provides child care facilities jointly with others, for example with other employers, or with a voluntary body. In such circumstances, the employer must be wholly or partly responsible for both financing and managing the child care facility.

However, the employer may opt not to be involved in the management of the child care service. To cater for such circumstances, I amended the benefit-in-kind exemption last year so that it covers situations where the employer provides financial support for items of capital expenditure and equipment but not other costs incurred by the employer. This provision was introduced to make the scheme more attractive to the many employers who did not want to be involved in the management of the facility.

In addition, capital allowances are available for capital expenditure on the construction, exten sion and refurbishment of a building, or part of a building or the conversion of an existing building which is used for the purpose of providing a pre-school service, day care or other child care facility. The premises must not include any part of a building in use as, or as part of, a dwelling. Aside from these tax incentives, the Government consulted widely and ultimately considered a universal child benefit system to be the most equitable approach to this issue. In this regard, the improvements in child benefit which I introduced in the past two budgets are part of a three year programme which will see an additional €1.27 billion invested in child related payments.