Net income method best way of providing childcare support, says Zappone

The net income method was the fairest way of providing childcare support, Minister for Children Katherine Zappone told the Seanad.

“Basing the assessment on net income should also reduce the risk of high effective marginal tax rates, as subsidies are withdrawn in line with increasing income,’’ she added. She said the approach was supportive of equity and labour market activation policy objectives and should ensure the scheme was helpful to working families on low to moderate incomes.

Those on low incomes were prioritised, which she hoped would be particularly effective for the children of lone parents and those children living in households below or close to the poverty line, said Ms Zappone. She said subsidies would be available for children aged from six months to 15 years and would meet families’ full-time and part-time childcare needs, including outside of school hours and during school holiday time.

“International research confirms that access to high-quality and affordable childcare is particularly important and beneficial for children from lower income families,’’ Ms Zappone added.

“Employment is the best route out of poverty, and affordable childcare supports parents in lower-income families to access the labour market,’’ she said.

She said the benefit would be greater for children from disadvantaged backgrounds. There would, she added, be a subsidy of about €8,000 a year available at the highest rate, based on the maximum of 40 hours childcare a week.

“This will help families to overcome disadvantage and contribute to a reduction in child poverty,’’ she said.

She said under the initial terms of the scheme households earning up to €47,500 net income would be able to avail of subsidised childcare.

“I hope that future budgets will enable me increase this threshold year-on-year,’’ she said.