Parents get tax-free childcare boost

The Government is to give €1,000 each year to the parents of every child under six as part of a major childcare package.

The payment will be tax-free and will be made on a quarterly basis from next summer.

Minister for Finance Brian Cowen said it would help pay for the childcare costs of more than 350,000 children under six.

“By any standards, that’s a significant contribution from the taxpayer towards the cost of childcare,” he said.

The total cost of the measure will be €265m in 2006 and €353m in 2007.

But the National Women’s Council said the €1,000 per child grant would only pay for 10% of parents’ childcare costs.

“In terms of making choices about whether you want to stay in employment or do you want to take time out and care for your children, that’s not going to do that,” said its head of policy Orla O’Connor.

The total cost of the five-year National Childcare Investment Programme will be 574 million euro. This is in addition to the €215m being spent under the final two years of the existing Equal Opportunities Childcare Programme.

Mr Cowen said he was conscious that the pressure was greatest on parents in the first year of their child’s life.

He announced that mothers of newborn children would be entitled to six months paid maternity leave by 2007.

The current entitlement to paid maternity leave is 18 weeks. An extra four weeks will be added from March next year, and a further four weeks in 2007.

Mr Cowen said unpaid maternity leave would also be extended by four weeks in 2006 and by four weeks in 2007.

Under the five-year childcare strategy, a total of €317m will be set aside to create 50,000 extra childcare places and employ 17,000 additional childcare workers. The grant limit for private facilities will be doubled to €100,000 and grants of up to €1m will be provided for public childcare facilities.

The size of child benefit payments will be increased to €150 per month for the first and second child, with 185 euro for third and subsequent children.

Mr Cowen said the five-year plan was designed to be fair to both working and non-working parents.

“We can only do so much in one budget. A complete solution will take time but the structured medium term approach I am announcing will, I believe, increase the options for parents in a balanced way.”

“I hope it will be recognised as a constructive step forward in this area.”