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Child Care Services.

Dáil Éireann Debate, Tuesday - 8 February 2005

Tuesday, 8 February 2005

Questions (233)

Finian McGrath

Question:

243 Mr. F. McGrath asked the Minister for Finance if he will consider proposals (details supplied) on funding child care services. [3398/05]

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Written answers

The Deputy's question has nine separate proposals for funding child care services. Only some of them fall within the remit of my Department.

Over the past number of years the Government has considered carefully the whole area of child care. It has been decided as a matter of policy that child benefit will be the main instrument through which support will be provided to parents with children. One of the main benefits from this approach is that, whereas tax relief would be of little or no benefit to those with low incomes, the provision of support for parents through the child benefit route means equality of treatment for all recipients.

In line with this policy approach, the Government has substantially increased child benefit since coming into office in 1997. In that year, the rate of payment was €38.09 per month for the first and second child and €49.52 for the third and subsequent children. In accordance with my budget 2005 statement, the rate of payment from April 2005 will be €141.60 per month for the first and second child and €177.30 for the third and subsequent children. This represents a 272% increase in the rate for first and second children over the rate prevailing in 1997 and a 258% increase in the rate for third and subsequent children. By comparison, during this period the increase in the consumer price index was 31%. Overall expenditure on child benefit has increased from €506 million in 1997 to an estimated €1,916 million in 2005.

One of the key drivers of costs in respect of child care has been the limited number of formal child care places available. In addition, the delivery of quality child care is, of necessity, expensive because it is a labour intensive service frequently required by parents for ten or more hours per day. To address the availability of services, the supply of formal child care places is being stimulated through a programme of investment under the national development plan equal opportunities child care programme, EOCP. The EOCP funds capital development to increase places, support staffing costs for facilities targeting disadvantage, and improve child care quality. Over the next five years, 2005-2009, the capital envelope for the planned programme of continued investment in child care facilities will be €313 million, which is expected to create about 17,000 places — some 3,400 per annum for each of the next five years. The 2005 allocation for the EOCP provides €83.4 million of which €43.8 million is current and €39.6 million is capital funding. In effect, this is all new spending since 1997. Prior to 1997, the only equivalent provision was a pilot scheme which ran from 1994-97 at a total cost over the three years of €1.6 million.

The Government has also undertaken measures to favour the supply of child care by tax incentives to set up facilities and relief from benefit-in-kind taxation for free or subsidised child care provided by employers. Taken together these represent substantial measures to assist with the cost of child care.

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