Budget plans to give parents vouchers to cover the costs of childcare
Similar UK scheme left some taxpayers worse off
PARENTS will receive money to pay for creches and other childcare facilities in the form of vouchers, the Irish Mail on Sunday has learned.
The Department of Children has got agreement from Public Expenditure Minister Paschal Donohoe that payments will go to working parents to subsidise their income, with the most going to lower paid workers. The upper threshold for payments will be between €50,000 and €55,000 net per household.
The move could prove controversial. Britain has moved away from a voucher system to a tax break system. Childcare vouchers in the UK were only offered through employers so the self-employed missed out. The scheme was a £930 annual saving for parents. They could write off 20% of childcare costs, up to a limit of £2,000 a year per child.
The original UK childcare voucher scheme benefited larger families and the selfemployed but some basic-rate taxpayers ended up worse off.
It has also emerged that Health Minister Simon Harris has secured a €14bn budget for the Department of Health for the first time in the history of the State.
There will be no changes to prescription charges however.
The MoS revealed recently that Finance Minister Michael Noonan had intended instituting a 0.5% cut to the middle band of USC. This is now being expanded to a cut of 0.5% in all three bands.
Children’s Minister Katherine Zappone, after marathon negotiations, has secured her plan to begin the move to have fully subsidised childcare package for all families.
The MoS has also learned that there is no provision for the abolition of water charges. If the government removed the provision for charges the Budget would immediately be limited by €200m.
Water charges are currently suspended into next year.
A senior Government spokesman confirmed that the Government was waiting for the expert report.
They noted that ‘in the event of the permanent abolition of charges the Government will then have to make choices in order to fund infrastructure and services’. The Department of Social Protection expects to raise the old age pension by €5, but a rather unseemly row has broken out over the timing. Social Protection Minister Leo Varadkar decided to increase the pension by €5 – but did not want to be seen to be forced into the move by Fianna Fáil, which is supporting the Government from the opposition benches. Fianna Fáil’s Willie O’Dea had announced that €5 for pensioners was the least that his party would accept. However, Mr Varadkar decided that if he delayed the rise then he could accommodate other groups that have seen their social welfare cut. But last night Fianna Fáil leader Micheál Martin insisted to reporters that his party would not accept a payment in the second quarter of the year.
However, Minister Varadkar told the MoS yesterday that payment would have to be deferred. ‘This time the recovery needs to be for everyone: employed, self-employed, people who can’t work, rural and urban, young and old. Everyone needs to feels it in their pockets, even if it’s modest.’
‘These groups had their payments cut by €16 a week by FF and have had no restoration. The only way we can possibly afford this is to defer the payments until after January.’
A source close to Mr Varadkar said: ‘It comes down to the time. We’re looking to do it at the moment in Quarter 2, which is the three months from April to June. So the sooner that we can do it the better – we just need the money.
‘We need money to pay for it earlier.
‘It comes down to negotiations with officials at the Department of Public Expenditure and at the Department of Finance whether we have enough money to get it earlier in the year than June. It could potentially be earlier than April. It looks to me that Fianna Fáil is open to delaying the payments if it means everybody is taken in.
‘The discussions will continue with the departments of Public Expenditure and Finance over the weekend, because what this boils down to is if we did the pensions in January nobody will get anything.’
Defer payments until after January ‘Recovery needs to be for everyone’
Fianna Fáil is holding out for payments to begin in March, but the matter increasingly looks like an unseemly battle for the high moral ground. Negotiations will continue over the weekend. Meanwhile, at last night’s Cáirde Fáil dinner, Micheál Martin claimed that his party had helped to change Fine Gael’s ‘right-wing approach’.
He told the assembled party faithful: ‘What we did was to take the edge off their ideology and to secure a complete reorientation of government policy on critical areas.
‘Most importantly we stopped efforts to implement unfair tax cuts weighted to the wealthiest and secured a substantial increase in funding for critical public services like education, pensions and health.’