Dáil Éireann Debate, Tuesday - 4 July 2023
231. Deputy Cathal Crowe asked the Minister for Finance if he will give positive consideration to introducing tax relief measures for parents who have to take extended leave from work to care for young babies who, owing to an acute shortage of places for those under 12 months of age, cannot avail of childcare; and if he will make a statement on the matter. [32441/23]
View answerI 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 intended to increase the availability of childcare facilities more generally, I would note that:
• The Accelerated Capital Allowances scheme for Childcare Services encourages employers to develop childcare facilities onsite for their employees. It allows for 100% wear and tear allowances in respect of the capital expenditure incurred on childcare equipment for the year in which the equipment is first used. An accelerated industrial buildings annual allowance of 15% over 6 years and 10% in year 7 can also be claimed for capital expenditure incurred on the construction of a childcare services facility.
• 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.
I also note the findings of the Interdepartmental Working Group on Future Investment in Childcare in Ireland, which published their report in July 2015. Having considered the option of a tax credit that would be available to those who incur childcare costs, the Group recommended against introducing such a measure. The Group had concerns that a tax credit would not be equitable, would have possible high dead-weight, could end up being fully absorbed in the cost of childcare, and might not have a meaningful impact on a parent's decision on whether to join or to return to the labour market. Estimates produced at the time also suggested that the annual Exchequer cost of such a measure could be very substantial.
A number of tax credits are available to parents caring for dependent children, for instance:
• An Incapacitated Child tax credit of €3,300 is available to the parent or guardian of a child who is permanently incapacitated, where there is a reasonable expectation that the child will be unable to support themselves when over 18 by earning an income from working.
• A Single Person Child Carer tax credit is payable to any single parent or guardian to a child, other than a foster child or a child in residential care, which they support and maintain at their own expense. The child must be under 18 years of age or over 18 years of age if in full time education or permanently incapacitated. €1,650 is available as a credit as well as a standard rate band increase of €4,000.
• A Home Carer tax credit of up to €1,700 is available for those earning under €10,600 during 2023 who are married or in a civil partnership and care for one or more dependent persons, which may include a child for whom they receive the child benefit payment.
As Minister for Finance, I receive many requests for the introduction of new tax reliefs and the extension of existing ones. In considering these, I must be mindful of the public finances and the many demands on the Exchequer and I must have regard to budgetary constraints and the equitable treatment of all tax-payers. Tax reliefs, no matter how worthwhile in themselves, reduce the tax base and make general reform of the tax system that much more difficult.
I do not currently have any plans to introduce any further tax relief measures for parents along the lines suggested.
