ESRI: Lone parents better off not working because of 'extremely high childcare costs'

Almost one in five lone parents are better off not working due to the cost of childcare, according to the ESRI.

New research shows those who took up work after a social welfare policy change 2011 actually suffered a fall in income rather than a rise.

The report puts this down to high childcare costs and low-paid, part-time employment options.

Senior Research Officer, Dr Claire Keane, says the price of child-minders and creches is a huge factor.

Dr Keane said: "We have extremely high childcare costs compared to other OECD countries.

"So if we look and see how many lone parents are better off not working before we take these childcare costs into account, it's around 2%.

"If we move to include childcare costs, 16% of lone parents are financially better off not being in employment."

The Society of St. Vincent de Paul (SVP) said it confirms that the changes to the One Parent Family Payment introduced in 2012 were "counterproductive".

Dr Tricia Keilthy, Head of Social Justice with SVP, said, “This is the fourth report to be published in the last nine months which shows how the cuts during the crisis reduced the income of lone parents and pushed them into deeper and more persistent poverty.

"From the outset of the reforms, it was clear that the policy lacked coherence and led to the development of a complex system of supports, where eligibility depends on the age of their youngest child.”

“Since 2012, SVP has been particularly critical of the decision to abolish the features of the One Parent Family Payment which supported lone parents to take up employment and education. The ESRI research clearly shows that the cuts and changes resulted in income losses for employed lone parents.

"This is also reflected in data from the European Income and Living Conditions survey which showed that the rate of in-work poverty among lone parent increased from 9% in 2012 to just over 20% in 2016," she continued.

Dr Keilthy said the report also shows that adequate subsidies under the Affordable Childcare Scheme can improve lone parents’ access to employment and make it possible for parents to take up and increase working hours.

She said: “We fully agree with the authors of today’s report when they say labour market activation can’t occur in a vacuum.

"Changes in the benefit system need to be considered alongside other changes in childcare policies and family employment practices, the availability of social and affordable housing, and legislation relating to precarious work, minimum wage, and child maintenance.

“It is clear that the Government needs to move away from a ‘work first approach’, as it does not consider the barrier to education and training, making access to quality employment more difficult. Lone parents need decent employment opportunities that fit with the realities of everyday family life.”

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