VAT rise to increase cost of childcare

CHILDCARE providers warned last night that the VAT increase announced by Finance Minister Charlie McCreevy yesterday will dramatically increase the cost of childcare.

Angry parents and women's groups also hit out at the average €23 monthly shortfall in the promised child benefit increases that were to help pay for childcare.

The National Women's Council (NWC) said the €8 to €10 monthly increases in child benefit were grossly inadequate. NWC chairwoman Grainne Healy said: "These increases would not even buy you 15 minutes of childcare, it is far worse than we expected."

Childcare providers accused Mr McCreevy of pushing up the operational costs of creches by increasing VAT and commercial property stamp duty, which would be passed on to parents.

The National Children's Nurseries Association said the child benefit increases would do nothing to help parents pay for the increasing costs of childcare. Their director of services, Mary Lee Stapleton said: "They are absolutely atrocious and will do nothing to help increase the number of childcare places."

Mr McCreevy had promised to pump €1.27 billion into the child benefit programme over a three-year period to help parents pay for childcare. This was the final year of that pledge and €423 million should have been put into the child benefit.

Instead the minister has allocated just €105m to child benefit next year because of budgetary circumstances. Mr McCreevy said he would not deliver the promised increases for another two years.

The NWC also sharply criticised the major drop in promised child benefit increases. It will increase by €8 a month for the first and second child a €24 shortfall on what was promised, according to the NWC.

The €10 monthly increase for the second and third child is a €22 shortfall on what was promised.

Mr McCreevy has promised to increase child benefit to help parents pay for childcare.

"It is an absolute joke for Minister McCreevy to say that this Budget will do anything to help parents pay for childcare or tackle child poverty," Ms Healy said.

Parents struggling to pay the average childcare bill of €500 a month for one child do not even get any tax breaks in this Budget to help them.

"By the time Minister McCreevy delivers his promised increases in two years time they will be worthless because the cost of childcare and inflation will have eaten into them completely," Ms Healy said.

More in this section

Puzzles logo
IE-logo

Puzzles hub

Visit our brain gym where you will find simple and cryptic crosswords, sudoku puzzles and much more. Updated at midnight every day.

Puzzles logo
IE-logo

Puzzles hub

Visit our brain gym where you will find simple and cryptic crosswords, sudoku puzzles and much more. Updated at midnight every day.