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Child Item

Childcare costs

Pawwed Rig

I just started looking at creche for my little boy. The cost is astronomical (€1,000 per month). It is a real disincentive to go back to work.

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Pawwed Rig

fits wrote: »

unless the government make up the shortfall

That is the point. Where the government makes up the short fall (by way of tax credit) then more people will remain in the workplace which increases the tax take and increases a families spending power further increasing the tax take through VAT/VRT etc. It also increases demand for things like public transport with a greater density of workers providing more demand. It is a win win.

The government has also allowed individuals to earn upto €15,000 per annum tax free to mind children in their own homes but there does not seem to have been much uptake on it. I would have thought any one who was on the dole or a single parent for example would have jumped on this.

RainyDay

Pawwed Rig wrote: »

They would though unless they fell outside of the tax net altogether as we start paying the 20% rate at a low level in this country.

Why should those who earn least get the least benefit out of the Govt subsidy?

Pawwed Rig

RainyDay wrote: »

Why should those who earn least get the least benefit out of the Govt subsidy?

Well they wouldn't. They could get a tax credit the same as everyone else?

ted1

RainyDay wrote: »

Why should those who earn least get the least benefit out of the Govt subsidy?

because they contribute the least.

ancapailldorcha

ted1 wrote: »

because they contribute the least.

They'll contribute nothing if they have to leave their jobs to mind their children.

RainyDay

Pawwed Rig wrote: »

Well they wouldn't. They could get a tax credit the same as everyone else?

If you don't pay tax, tax credits don't help you.

ted1 wrote: »

because they contribute the least.

Ah, I see - you measure 'contribution' as 'income tax'. I'm not sure that such a narrow view is a sound basis. Thanks for confirming why this proposal would be a bad idea.

Pawwed Rig

RainyDay wrote: »

If you don't pay tax, tax credits don't help you.

Ah ok. Well that is a different argument. The universal payment that was used the last time was just ridiculous as parents just used it as an extra income unrelated to child costs. Tax credits would be the fairest way as then those who it is not economically viable to go back to work can stay at home with no extra cost on the state. It depends how you see your social models really. A government sponsored child care system might better address your point as there would be no payments but reduced cost for each individual. But any kind of payment is going to hit the less well off harder as that is the model our economy is based on.

ted1

ancapailldorcha wrote: »

They'll contribute nothing if they have to leave their jobs to mind their children.

They will leave a vacant position in a low paid job for someone who can afford to work that position

ted1

Pawwed Rig wrote: »

Ah ok. Well that is a different argument. The universal payment that was used the last time was just ridiculous as parents just used it as an extra income unrelated to child costs. .

The actual problem was that it went to parents of kids who were not resident in the states. Plenty of migrant workers received the payout for kids living in their native country. Menace the change to ecse

ted1

RainyDay wrote: »

Ah, I see - you measure 'contribution' as 'income tax'. I'm not sure that such a narrow view is a sound basis. Thanks for confirming why this proposal would be a bad idea.

The discussion is about economics so yes I'm talking about income tax.

If your trying to be smart it's not working for you, as your implying that stay at home patents don't contribute to society which they do.

RainyDay

ted1 wrote: »

They will leave a vacant position in a low paid job for someone who can afford to work that position

I'm a bit confused. I didn't think you had to be able to 'afford to work'. I thought work was supposed to make money, not cost you money. Is work now going to be the privilege of those who can afford it? Is anyone in need of childcare to be squeezed out of work for 10 years or so?

ted1 wrote: »

The actual problem was that it went to parents of kids who were not resident in the states. Plenty of migrant workers received the payout for kids living in their native country. Menace the change to ecse

Really? The bloody immigrants were the main problem? Where did you get that from?

ted1 wrote: »

The discussion is about economics so yes I'm talking about income tax.

If your trying to be smart it's not working for you, as your implying that stay at home patents don't contribute to society which they do.

Funnily enough, economics would look at ALL taxes, not just income tax. There are many ways in which people contribute financially to the state beyond income tax.

ted1

RainyDay wrote: »

I'm a bit confused. I didn't think you had to be able to 'afford to work'. I thought work was supposed to make money, not cost you money. Is work now going to be the privilege of those who can afford it? Is anyone in need of childcare to be squeezed out of work for 10 years or so?

There's cost associated with work, travel ,lunch, clothes, child care. If these exceed the amount of payment received then 'you can not afford to work' as simple as that. no people in need of childcare don't have to take a 10 year break, they just have to find a job that they can afford.

RainyDay wrote: »

Really? The bloody immigrants were the main problem? Where did you get that from?

Yes, there's a potential of €90m-€150m that could be paid out..
It was all over the media when it came out.
http://www.irishexaminer.com/ireland/only-4-of-migrant-workers-get-child-payment-27342.html

RainyDay wrote: »

Funnily enough, economics would look at ALL taxes, not just income tax. There are many ways in which people contribute financially to the state beyond income tax.

sure there are but a person working only pays income tax, USC and PRSI. they position will be filled by someone else and these taxes will still be paid, but the state don't have to pay out childcare costs.

neris

Pawwed Rig wrote: »

There is an option to pay VAT on these. I would imagine a creche would not set up somewhere where there was VAT chargeable when they can get a location where there is none chargeable considering they are unable to recover VAT.

Unfortunatly its not that easy to find suitable Vat free premises to operate Creche's from, especially creches that were built by developers during the boom. Alot of commercial landlords charge Vat. One of the biggest problems for childcare operators is finding a suitable premises at a reasonable rate.

kippy

neris wrote: »

Unfortunatly its not that easy to find suitable Vat free premises to operate Creche's from, especially creches that were built by developers during the boom. Alot of commercial landlords charge Vat. One of the biggest problems for childcare operators is finding a suitable premises at a reasonable rate.

Yeah, if only the state had a body that controlled a large portion of residential and commerical property in the state.

ted1

neris wrote: »

Unfortunatly its not that easy to find suitable Vat free premises to operate Creche's from, especially creches that were built by developers during the boom. Alot of commercial landlords charge Vat. One of the biggest problems for childcare operators is finding a suitable premises at a reasonable rate.

up to 2010 (in some cases 2012) there was great tax breaks for building childcare facilities. places that didn't receive this break find it hard to compete againest those that did. that's what is causign the problems.
***********************************************
Capital expenditure incurred on the construction or conversion of a building used for childcare qualifies for capital allowances as follows:

Years 1-6 15%
Year 7 10%
Accelerated capital allowances of 100% are available to owners and investors. For investors, the allowance that may be offset against other income is limited to €31,750. There is also an exclusion for property developers.

A minimum 15 year holding period applies where the childcare facility is first used on or after 1 February 2007, otherwise a 10 year minimum holding period applies.
******************************************************

RainyDay

ted1 wrote: »

Yes, there's a potential of €90m-€150m that could be paid out..
It was all over the media when it came out.
http://www.irishexaminer.com/ireland/only-4-of-migrant-workers-get-child-payment-27342.html

Did you read the article that you linked to?

The low number of successful applicants to date indicates the Government will only have to pay out a fraction of official estimates that the scheme could add an extra €90m a year to its social welfare budget.

ted1

RainyDay wrote: »

Did you read the article that you linked to?

yes, it says only a fraction of those eligible applied. so they closed the loop before the take up increased.

If you think that its OK to leave yourself open to a claim of between €90m-€150m well then you clearly have no business sense and aren't qualified to make any comment with regards finance.

RainyDay

ted1 wrote: »

yes, it says only a fraction of those eligible applied.

Where exactly does it say that?

K-9

ted1 wrote: »

I don't think the tax payer should subsidise child care, it's the same as contributing to someone's wages. If the job isn't paying enough, then don't do it.

In our case the misses stays at home to mind our two kids. Because it's not worth her while. Should the tax payer give her the subsidy that you expect hem to give to working people?

A subsidy or credit would make work more viable for her. I see Child Benefit as a universal payment for all children, this would be a tax credit for a considerable expense, sometimes more than mortgages.

K-9

Pawwed Rig wrote: »

They already subsidise childcare to the extent that it is exempt from VAT. They also introduces a universal payment a few years ago which was subsequently scrapped. My main issue is the difference between the costs in Ireland and the rest of Europe. Why are Irish people being disadvantaged relative to their peers? It is not a small difference either.

The problem was introducing the universal payment in the first place and also giving big increases to the basic payment. We probably have missed the chance to introduce it, when we did have money to do it FF went down the populist route.

It seems it's VAT Exempt because it is classed similar to education and health type services.

pwurple

kippy wrote: »

Yeah, if only the state had a body that controlled a large portion of residential and commerical property in the state.

Wahoo, let's convert Carlow ghost estates into boarding creches! . :pac:

kippy

pwurple wrote: »

Wahoo, let's convert Carlow ghost estates into boarding creches! . :pac:

Do you realise how much commerical property Nama has been in control of?

Pawwed Rig

You would imagine when the councils were providing planning for all these new estates about the place that consideration would have been given for allocating commercial premisis for creche facilities or am I being too naive

pwurple

I know commercial property on patrick street in cork or in random industrial estates are not exactly convenient to children.

And ghost estates are typically mostly empty, seeing as they are built in completely ridiculous places where no-one with half a brain ever wanted to live.

neris

Pawwed Rig wrote: »

You would imagine when the councils were providing planning for all these new estates about the place that consideration would have been given for allocating commercial premisis for creche facilities or am I being too naive

It was and the buildings came with tax breaks for investors who then charged the high rents of the time to the operator.

kippy

pwurple wrote: »

I know commercial property on patrick street in cork or in random industrial estates are not exactly convenient to children.

And ghost estates are typically mostly empty, seeing as they are built in completely ridiculous places where no-one with half a brain ever wanted to live.

Ah look, yeah I know its not always practical.

pwurple

kippy wrote: »

Ah look, yeah I know its not always practical.

Yes, I don't think it's actually a lack of spaces, it's just very very expensive. My two will be in 5 half days a week, and that's costing us 1400 euro a month. And we are very lucky that our parents can look after them in the afternoons. I have friends paying over 3k per month for childcare.

I know the argument is Stay at Home, but when you work in something that goes out of date if you are missing for 5 years until the child goes to school (like IT), it effectively means packing it in for good.

And the country is short qualified experienced IT people. I know it myself, because i'm sometimes on the other end of recruiting them. I'd love if my sister-in-law would come back to work, she was a ridiculously good Oracle DBA, but childcare is too expensive.

There should be a tax credit. That is by far the fairest. There's nothing wrong with enabling people to work. That's what keeps all the wheels turning.

Pawwed Rig

Even with a tax credit we would still be in the most expensive 2 or 3 places in the EU for childcare (assuming a standard rate credit rather than a marginal rate and marginal rate credits don't really happen anymore).

RainyDay

pwurple wrote: »

There should be a tax credit. That is by far the fairest.

How did you work out that a tax credit is 'fairest' given that it benefits high earners more than middle/low earners, and creates a further poverty trap for those who can only access low paying jobs?

K-9

RainyDay wrote: »

How did you work out that a tax credit is 'fairest' given that it benefits high earners more than middle/low earners, and creates a further poverty trap for those who can only access low paying jobs?

True enough, the UK has a payment like working families tax credit for childcare, or at least used to anyway. Would be an option to cover lower paid families.