Senior civil servants are to give the Government detailed options to bring about an overhaul of childcare policy, including substantial child-benefit increases and tax credits, writes Liam Reid, Political Reporter.
The proposals, which will also examine the possibility of enhanced tax reliefs and a reform of regulations for creches, will be presented next month to Taoiseach Bertie Ahern and senior Ministers at a special meeting of the Cabinet committee on social inclusion.
The initiative, which is in its early stages, comes as all political parties seek to develop proposals to ease the financial burden on working parents. This has been identified as a key issue for the next general election.
The Taoiseach and his Ministers will be given estimates which show that a parent returning to work would have to earn €16,000 just to cover the average weekly cost of childcare in Dublin of €130.
Six possible options of financial aid to working parents have already been developed by the Government's key tax advisory group, and these are to be given to Ministers to examine.
The cost of each option ranges from between €160 million to €713 million a year.
Childcare has emerged as a potential key election issue, with the Green and Labour parties having already outlined their proposals.
Last September, as part of preparations for last year's budget, a discussion paper was prepared for the Government's tax strategy group outlining the options, and this is to form the basis of options to be outlined to the Government.
The document effectively ruled out direct tax relief for childcare as being against Government policy and would only benefit a small proportion of families whose children were in formal childcare.
The alternative six options outlined included a payment of up to €120 per child under the PRSI system for working parents, at a net cost of up to €140 million per annum.
A second option is a tax credit of up to €1,000 to working parents with children, combined with a direct income payment to low- income families, at a potential cost of €195 million. The difficulty of both payments is that they do not target assistance at parents who decide to stay at home.
A third option of giving a €50 per week subsidy per child to creches is also outlined, although this would cost up to €470 million.
The fourth option is a universal payment on the same basis as child benefit of up to €120 per month per child - of both working and non-working parents - at a cost of up to €713 million, dropping to €572 million if it was taxed.
Because of the high cost, a fifth option also proposes this universal payment, but suggests it should be means tested to exclude high earners.
A final option is to give a tax credit and social welfare payments to all parents, regardless of work status, which could cost up to €322 million.
The options will be included in a series of proposals to be collated by a group of secretaries general from six Government departments who currently have an involvement in childcare policy and payments.
This group has been asked to report to the Cabinet sub-committee next month as the first stage in drawing up the childcare package.
It is understood that most Ministers believe a major childcare package is needed, although there is believed to be discussion among some Cabinet members about the timing of its launch.
Ministers also believe there is considerable work to be done, and it could be next year before definitive proposals emerge.
The Cabinet sub-committee will also examine proposals relating to easing regulations relating to the construction of creches. A reform of current tax incentives for creches will also be looked at.
Minister for Social and Family Affairs Séamus Brennan has also asked for proposals for a "carer payment" for family members who care for children.