Rise in tax limit good news for childminders

CHILDMINDERS were given a financial boost in yesterday’s Budget announcement, but only those who look after one or two children.

Childminding Ireland welcomed the decision by Finance Minister Brian Cowen to raise the income tax exemption for those minding the children of others in the minder’s own home from €10,000 to €15,000.

However, it pointed out that it officially excluded those minding more than three children. In addition it said in reality, at an average cost of €125 per child per week, those looking after more than two children at the average rate would be earning above the exemption rate anyway. In raising the exemption limit Mr Cowen admitted there had been a slow take-up of the tax incentive since it was introduced last year.

Childminding Ireland said that reluctance among the estimated 40,000 childminders had been because there was not an awareness of the scheme and because it would all be taxable after the €10,000 limit was passed, meaning many childminders were better off writing off legitimate expenses as they were entitled to do as self-employed business people.

The organisation said it welcomed Mr Cowen’s increase to €15,000 as an acknowledgement of the “vital contribution” played by childminders in the childcare sector.

“However, we regret Minister Cowen did not implement our recommendation that the relief be based on net profit, thereby extending the relief to all childminders, spokeswoman Mary McGrath said.

“The childminding relief is a measure not just to increase supply, but also to enhance quality, and should be available to all childminders who are minding five or less children.”

Elsewhere in his childcare initiatives, the minister increased child benefit by €10 per month for all children to €160.

He appeared to make a mistake when he said that, taken in conjunction with the €1,000 per year under the Early Childcare Supplement, it would mean direct tax-free payments for families with two children under six years of €5,780.

The Department of Social and Family Affairs confirmed that it should be €5,840.

Also in yesterday’s budget, Mr Cowen increased the length of paid maternity leave by four weeks, bringing the total amount of paid leave to 26 weeks.

“Along with the changes in maternity benefit I announced earlier, these changes will help to ease the burden on working families,” he said.

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