VAT on child care raises fears about unqualified minders

PARENTS' and women's groups and trade unions have called on the Government to suspend the imposition of VAT on child care services, and have raised fears that more children will fall under the care of cheaper, unqualified minders.

The National Women's Council of Ireland has warned that the VAT burden, of up to 21 per cent, will undermine the limited creche and child minding services available.

"There is an understanding that we need to be moving towards a well structured, regulated and high quality range of services to support families. A move on VAT now will simply reduce the already limited options," said chairwoman Ms Noreen Byrne.

"Undoubtedly some parents will be forced out of the labour market and some others may have to opt for cheaper services which are not of the standard they want for children."

The council has requested a meeting on the issue with the Minister for Finance, Mr Quinn. The Minister should refer the matter to an expert working group on child care being established under Partnership 2000, said Ms Byrne. This group has been charged with considering the financing of child care provisions by different means.

The National Children's Nurseries Association has warned that creches could be forced to close if the charge is enforced retrospectively. "It's a very labour intensive business. The overheads are quite high and the margins are quite low. People just don't have this sort of money to pay," said association chairwoman, Ms Martina Murphy.

Accusing the Government of "paying lip service" to the issue, she said she could not understand how child minding could be classified as a luxury item under the VAT system.

Ms Elizabeth Quinn, co ordinator of the National Association for Parent Support, said the Government should be encouraging rather than discouraging parents to use recognised child care services.

She said the need for proper child care training had become more apparent in the light of cases such as the recent death from "shaken baby syndrome" of an American infant in the care of a teenage au pair.

"If costs are going up people are going to find less satisfactory arrangements and that will inevitably mean, resorting to the black economy, she said.

The association last year made a submission to the Government's Commission on the Family calling for tax deductions for parents using child care services.

Ms Fionnuala Kilfeather, of the National Parents Council, said recognition should be given to the role parents played in creating employment in the child care sector.

Tax relief for parents would help lift the quality of these services, she said. "Minding children is far too important to be in the black economy.

The Irish Congress of Trade Unions also called on the Government to exempt child care services from VAT. The ICTU equality officer, Ms Rosaleen Glackin, said that Partnership 2000 committed the Government to abolishing VAT as part of the policy of creating affordable child care services. Such services were crucially important for families and the promotion of equality for women, Ms Glackin said.

A spokeswoman for the Revenue Commissioners confirmed that any creche or child minding service with an income exceeding £20,000 a year was liable for VAT at 21 per cent. Centres found by inspectors to be educational services were exempt, she added.

The Oireachtas Joint Committee on Women's Rights has also criticised the collection of VAT on creche and child minding services as "anti family and anti women in the work place".

Its chairwoman, Ms Mary Wallace, said the committee was appalled" at the imposition of 21 per cent VAT on non educational creche and child minding services which would "place many parents under serious financial strain".

Ms Wallace was speaking at yesterday's publication of the committee's annual report for 1996. The committee is conducting research on the provision of childcare facilities and Ms Wallace said she expected it would address the question of tax free allowances for child care when the research was finished.