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Child Care Costs

Dáil Éireann Debate, Thursday - 29 September 2016

Thursday, 29 September 2016

Ceisteanna (5)

Eamon Ryan

Ceist:

5. Deputy Eamon Ryan asked the Minister for Finance the measures he will introduce to support families with child care other than subsidisation of paid child care. [27878/16]

Amharc ar fhreagra

Freagraí ó Béal (8 píosaí cainte)

I do not believe the Government should discriminate between different approaches to parenting and child care. We need to ensure that full-time paid child care facilities are both accessible and of good quality but I argue that we also need to support those parents who decide to provide full-time care themselves or to use relatives, grandparents or a paid child minder. Parents are the best people to call what is the best form of child care to use for their children and I question why we are using our tax system, and it now looks like new support systems, to favour one choice or form of child care over the other.

As the Deputy will be aware, the Minister for Children and Youth Affairs has primary responsibility for Government policy in relation to child care and at the outset, I would refer to the interdepartmental working group on future investment in child care in Ireland, which published its report in July 2015.

Having considered the option of a tax credit that would be available to those who incur child care costs, the group recommended against introducing such a measure. The group had concerns that a tax credit would not be equitable, would have high possible deadweight, could end up being fully absorbed in the cost of child care and might not have a meaningful impact on a parent's decision on whether to join or return to the labour market.

The interdepartmental working group also made some initial estimates of the potential costs of such a tax credit based on available data. Tentative costings, based on estimates of average child care costs per pre-primary and primary school child care place, were applied to Department of Social Protection figures on the numbers of such children in receipt of child benefit. If a tax credit were provided in respect of even half of these children at the standard rate of 20%, it would involve a potential cost to the Exchequer of between €290 million and €590 million per annum. The variation depends on the rate of take-up which is difficult to estimate. It was assumed for the purposes of that costing that all paid child care would be covered by the relief, that is, not just centre-based care.

It is clear that any initiative that provides tax credits for paid child care would fail an equity test as it could be seen to unfairly discriminate against those individuals who choose to stay at home to care for their children. In addition, tax relief is only of benefit to those in the tax net and it is estimated that in 2016, 36% of income earners were exempt from income tax altogether.

As regards other tax measures, the Deputy may be aware that in budget 2016, I increased the value of the home carer tax credit and increased the amount of income the home carer can earn while still qualifying for a full or partial credit. The increase in the income threshold is a measure which is of specific benefit to lower income families and retention of the credit could facilitate the home carer in meeting child care costs associated with working any additional hours.

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There is a commitment in the programme for Government to further increase the home carer credit and I am considering relevant options as part of the tax package for the budget.

I would also point out that the social impact assessment of the budget 2016 tax and welfare measures published by the Department of Social Protection showed that households with children were the biggest beneficiaries.

It should also be noted that budgets 2015 and 2016 introduced reductions in income tax and USC for all income earners that had a relevant liability.  These reductions were specifically focused to target low and middle income earners and the programme for Government commits to continue reductions in personal taxation in order to make Ireland's personal tax system more competitive and to encourage work and employment.

The Minister gave the same response to the Committee on Budgetary Oversight. I am not calling for a tax credit. I am asking a fundamental question and I want to hear the Minister's view. It is not good enough to just say that it is the view of the Minister for Children and Youth Affairs. Is the Minister, as a Fine Gael Minister, happy that he is about to introduce a budget that, historically, will say the Government does not want parents staying at home looking after children, that it does not want them using a grandparent to care for children, that it does not believe in unpaid care work and that whatever a person does, he or she must get into the paid workplace because the Government wants to push the economy, whatever it takes, and it does not care if this means discrimination against a choice of different types of parenting. I would like to hear the Minister's view on that rather than getting the same answer a second time, which was not an answer to my question.

This is not a small change because the sort of subsidy which we have talked about paying, a couple of thousand euro a year, is a huge difference. In my constituency, and in many parts of the State, parents will be faced with a choice in that they will not have the option of staying at home because everyone else who is working will be paying higher mortgages and will pump up the whole economy. One has to be part of a dual-income system because that is what the Government says people have to do by the measures that it has introduced. I would like to hear the Minister's view on it rather than another repeated answer to something I did not ask.

First, I am not responsible for policy on child care, there is a Minister who is. To establish the Government policy on child care, along the lines of the Deputy's supplementary question, he should put down a question for the Minister for Children and Youth Affairs and not to me. I have referenced for the Deputy a reply to the notion that different parents should be treated differently under the tax code. I referenced the working party report which said it would be discriminatory to do so. I am responsible for taxes, among other things, and I have given the Deputy the reason applying tax relief to child care would be inequitable. It would discriminate against people who are not in the tax net and who are not in the labour force. I am fulfilling my obligations to the House in being amenable in respect of the policies I control. If Deputy Ryan wants a general discussion on child care, I suggest he raises it with the Minister, Deputy Zappone.

This is a central issue in the budget and there is a raging debate, from what I read in the newspapers, within the Minister for Finance's party about possible discrimination between those on different incomes. I support the Minister, Deputy Zappone, in trying as much as possible to target support for those on low incomes. However, a second massive discrimination is about to be introduced which is a historic statement that Fine Gael is saying it does not want anyone to do unpaid care work, it wants people in the economy and to stop caring for children and it will make that happen by introducing budgetary measures - the Minister's budget - which give direct financial assistance to those who tick a particular option. I do not have a problem with that but if the Government is doing that, then it should give the same assistance to those who choose other options because parents are best placed to choose what is the best form of child care for their different circumstances. Every child is different and every family is different. Why is it that economic considerations seem to be driving the State and the Government to say that only one approach is right? The reality is that it is the Minister's budget which is delivering that strategic change of direction in this State. That is wrong and I would like to hear the Minister's view on child care, as the Minister introducing the measure.

Deputy Ryan is ascribing views to me which I do not hold. On no occasion in the preparation for this budget have I indicated that I am introducing any particular measures on child care. I have never spoken about it and I do not know from where the Deputy's assumptions are coming.

The front page of everything.

If one was to rely on the newspapers, I would not be here at all.

According to last Sunday's newspaper, I should be dead long ago. The Deputy should not assume that what is on the front of a newspaper is a policy position. The Deputy was in government. He knows that quite well. I am sure he was misquoted on several occasions as well. The point is, if the Deputy wants a debate on child care, he should put it down to the Minister for Children and Youth Affairs. My job in the budget is setting the expenditure ceiling, managing the tax affairs, keeping within the fiscal rules and so on. I have indicated on no occasion that there are going to be measures along the lines the Deputy suggests for child care or otherwise. He will have to wait for budget day to see if there are any specifics.

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