‘Crippling’ childcare costs deter return to work

THE odds are stacked against lone parents in Ireland as childcare costs eat up more than half the income of those at work, while government benefits for stay-at-home parents leave them in poverty, an international study finds.

A comprehensive study called Bosses and Babies by the Paris-based OECD puts Ireland firmly at the bottom of the league when it comes to providing affordable childcare and close to the top for children at risk of poverty.

It prescribes full-time employment as a way out of poverty for single-parent families, but acknowledges that Ireland has very large numbers of children in poverty, even among working parents.

It recommends stopping lone-parent allowances once the youngest child reaches seven to 12 years of age, compared with 18 to 21 years at present, and encouraging mothers to look for work once their youngest is five. But it says this must be allied to more employment training and childcare support if it is to improve Ireland’s very high child poverty rates.

The cost of childcare is crippling even for families where both parents are working and have two pre-school children. Crèches or private care account for 45% of the income of those on an average wage and a third for those on above average wages, the report says.

Irish working parents have the least to gain from going out to work, even when state transfers for low-income sole parents are taken into account.

The report calculates that an average sole parent starting off in a low-paid job loses state entitlements equal to half their wage and pays almost 20% in taxes and contributions, which leaves them with 30% more money than when they were unemployed. But this extra is not enough to cover childcare costs or work-related expenses, it says.

“In Ireland the costs of childcare can be so high that, in the short term, work does not pay for many second earners in couple families and this applies to sole-parent families too,” said the report.

Ireland has the second lowest spend on childcare among the OECD countries. About 12% of working mothers rely on unpaid relatives to look after their children.

Ireland has the highest percentage of households with children at 45% — 22% of these are sole-parent families and 10% have three or more children.