Government officials have advised against a tax credit scheme for childcare on the basis that it would unfairly benefit higher earners and discriminate against stay-at-home mothers.
Parents have expressed growing frustration in recent days over the high cost of childcare. It follows a widely publicised letter by Cork mother Donna Harnett last week in which she described giving up work due to exorbitant childcare costs.
While there have been calls for tax allowances to make childcare more affordable, Minister for Children Dr James Reilly said in a parliamentary question a system of tax allowances would not benefit parents working in the home and could be seen as discriminatory. In addition, tax reliefs would favour the high paid while those on the minimum wage or in part-time work would not benefit to the same extent.
More than half (62 per cent) of these children are with their families in hotel or B&B emergency accommodation, often sharing one room.
“Many parents use childminders or relatives to meet their childcare requirements and may not be in a position to obtain receipts, making it impossible for them to establish their entitlement to tax relief,” Dr Reilly told the Dáil, in reply to a parliamentary question.
“There is also a view that the introduction of tax credits could lead to increased prices and therefore have limited impact in terms of savings to parents.”
A better approach was to make childcare more affordable through the free pre-school year and other targeted measures.
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