Questioning Noonan | On tax breaks for childcare

Further to our recent work on the issue of childcare, Stephen asked the Minister for Finance:

if he will provide, or request that his officials prepare an analysis of the net cost to the Exchequer of making childcare tax deductible;

if he will provide any further analysis that has been done by his Department on alternative fiscal strategies for reducing the cost of childcare to parents.

Answered on Wednesday, 20th June, 2012. Ref No: 29823/12

Minister for Finance ( Mr Noonan) :  

I am informed by the Revenue Commissioners that as they do not capture data on the overall net cost of childcare there is, therefore, no statistical basis on which they can provide an estimate of the cost of making childcare tax deductible. In these circumstances, it is not possible to extrapolate the potential net cost to the Exchequer of the proposal.

I would have some concerns about the potential that any tax relief for childcare costs might have on charges for childcare, as it is possible that the main beneficiaries of any such tax relief would be the childcare providers. The introduction of such a relief would also potentially carry a large Exchequer cost which could not be countenanced at the current time.

Notwithstanding the absence of tax relief for childcare costs, the Government acknowledges the continuing cost pressures on parents, particularly those with young children.  For this reason a number of support measures are available. These include, (i) the Community Childcare Subvention (CCS) programme, which funds community childcare services to enable them to charge reduced childcare fees to qualifying parents, (ii) the Childcare Education and Training Support (CETS) programme, which provides free childcare places to qualifying FÁS and VEC trainees and (iii) the Early Childhood Care and Education (ECCE) programme which provides for a free pre-school year for children in the year before commencing primary school. In addition, generous entitlements to paid and unpaid maternity leave are provided, as well as child benefit payments.