€16,500: Cost of care for two kids

A family with two children in childcare face paying out €16,500 a year — a cost that may stop people from taking up employment, according to a report.

The economic report into the cost of childcare was carried out by the Donegal County Childcare Committee and raises further questions about the affordability of childcare in this country.

The report found that the prohibitively expensive cost of childcare was a barrier to employment, with 26% of parents claiming they were prevented from returning to work or training because of childcare arrangements.

That figure jumped to 56% in lower income groups, while Ireland has the second highest childcare costs in the OECD as a percentage of average wages.

The report, launched in Dublin yesterday by the Children’s Minister Frances Fitzgerald, found that typical full-time childcare costs range from €730 to €1,100 per month, with a two-child family likely to spend €16,500 annually.

The high cost of childcare is also an issue given the nature of the country’s working population — 266,000 households have children under five years of age, so the fact parents feel they are unable to get back into the workforce has a wider economic impact.

The report, entitled Supporting Working Families – Releasing a Brake on Economic Growth, suggested two policy initiatives to address the issues.

Those behind the report said one option was a tax incentive to assist low-income working parents to fund childcare. A second option would be a direct payment related to the cost of childcare through the family income supplement (FIS).

The authors of the report said the latter option was the preferred one, as a cost-benefit appraisal for providing an incentive via the FIS scheme to long-term unemployed individuals with families found positive net economic benefits — for every €1 in costs there was €1.51 in additional economic benefit. The report recommends targeting people who are unemployed with children under five years with an amendment to the current FIS scheme.

A tax break for working families whose income is marginally above FIS limits would see a childcare subsidy of up to 40%. This option for families in employment and earning at or under the industrial wage would also lead to a cost benefit, the report said — €1.17 for every €1 spent.

The manager of Donegal County Childcare Committee, Avril McMonagle, said: “This report throws light on a growing problem and illustrates the extent to which childcare costs are putting a brake on Ireland’s economic growth, restricting a significant number of parents from returning to work after having children.

“This report outlines two policy options for combating this barrier to the workforce, with a particular focus on incentivising the hard-hit lower income working families.”

Responding to the report, early childhood education group Start Strong said in addition to lowering cost it was also vital to ensure that services are of high-quality.

Start Strong’s director, Ciairín de Buis, said: “If we design childcare subsidies without putting the quality of care at their heart, we risk encouraging further practice of the type revealed in the Prime Time investigation. Unfortunately, the only quality-related proviso in Indecon’s proposals is that a service must be tax-compliant and registered with the HSE.”

* Read the full report at www.donegalchildcare.com


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