Carey wants childcare support to be exempt from tax

CLARE Fine Gael General Election candidate Leonora Carey has said that childcare support provided by employers should be exempt from benefit in kind (BIK) tax.

The Clarecastle woman explained that, under current regulations, childcare support offered by employers is treated as a taxable benefit in kind. Removing the tax liability would benefit workers, employers, and the broader economy.

“When employers provide childcare support, whether through onsite facilities or financial contributions, Revenue treats this as taxable income for employees. That means income tax, PRSI and USC are levied on essential childcare benefits, as if they were extra salary.

“Childcare is not an optional perk and it’s essential that it is recognised as a crucial component of a well-functioning labour market.

“Employers who recognise this and offer childcare support shouldn’t be penalised – they should be encouraged. By taxing these benefits, we’re discouraging employers from stepping up and contributing to a functioning, buoyant labour market.

“Certain employee benefits, like the Cycle to Work Scheme and health supports, are exempt from BIK tax. If we can exempt those, why are we still taxing childcare, which is even more fundamental to our economic growth and workforce stability?

“This policy change should complement broader efforts to create a public childcare model. A cohesive public-private approach – where employer incentives go hand-in-hand with a robust public childcare system – is the sustainable solution that working parents need.

“The State needs to adjust its policies to reflect the needs of a modern economy. Childcare is critical infrastructure and treating it as a taxable benefit holds back our progress. We must make these changes if we want to create a fairer, more inclusive Ireland.” Ms Carey declared.