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Tax Credits

Dáil Éireann Debate, Thursday - 24 March 2022

Thursday, 24 March 2022

Questions (192)

Holly Cairns

Question:

192. Deputy Holly Cairns asked the Minister for Finance his views on providing a tax credit for parents and guardians for childcare costs; and if he will make a statement on the matter. [15742/22]

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Written answers

As I advised in relation to question 315 of 18 May last, I acknowledge the cost pressures on parents with young children. In recognition of these pressures, a number of support measures are already in place to ease the burden on working parents. These include various tax-exempted financial supports provided by the Minister for Children, Equality, Disability, Integration and Youth to assist parents to offset the costs of early learning and childcare and measures such as the Working Family Payment provided by the Minister for Social Protection.

With regard to taxation measures, and separate to the above:

The Accelerated Capital Allowances scheme for Childcare Services was introduced to encourage employers to develop childcare facilities onsite for their employees.

www.revenue.ie/en/tax-professionals/tdm/income-tax-capital-gains-tax-corporation-tax/part-09/09-01-11 .pdf.

Individuals who provide child-minding services in their own home may claim childcare services relief each year, provided that they do not receive more than €15,000 income per annum from the child-minding income.

www.revenue.ie/en/personal-tax-credits-reliefs-and-exemptions/children/childcare-services/index.aspx.

Furthermore, a Single Person Child Carer tax credit of €1,650 is available as well as an additional standard rate band of €4,000. This credit and band is payable to any single person with a child under 18 years of age or over 18 years of age if in full time education or permanently incapacitated. The primary claimant may relinquish this credit and increase in the rate band to a secondary claimant with whom the child resides for not less than 100 days in the year.

www.revenue.ie/en/personal-tax-credits-reliefs-and-exemptions/children/single-person-child-carer-credit/index.aspx.

Providing a tax credit for parents in respect of childcare costs was considered by the Interdepartmental Group on Future Investment in Childcare in 2015 and was deemed to be a suboptimal approach to investing in affordability for parents. Further details of that consideration are available in that report.

assets.gov.ie/36162/37cc5033f3124062912a416088a48827.pdf.

Finally, and as announced by my colleague, Minister O’Gorman, Budget 2022 made provision for the introduction of a number of measures to support parents in respect of childcare costs. The universal subsidy of the National Childcare Scheme will be extended to children of all ages and there will be a change to the practice of deducting hours spend in the Early Childhood Care and Education pre-school programme or school from the entitlement to subsidised hours of care. A new Core Funding stream will come into effect from September 2022 which will require participating providers to maintain their fee levels at or below September 2021 levels. This will ensure that the full affordability benefits of the National Childcare Scheme, and the Early Childhood Care and Education programme, are felt by parents. This will be preceded by a Transition Fund between May and August which will also require providers not to increase fees.

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