Erin McGreehan
Question:163. Deputy Erin McGreehan asked the Tánaiste and Minister for Finance if he is exploring the potential of a tax credit for children; and if he will make a statement on the matter. [39409/26]
View answerTuesday, 26 May 2026
Questions (163)
Written answers
The previous personal income tax packages implemented have made significant progress on increasing the entry point to income tax for all income earners, including those with children, and increasing the point at which the higher rate of income tax takes effect.
Over the lifetime of the previous Government, the main tax credits increased from €1,650 to €2,000 representing an increase of €350 or 21.2 per cent. The standard rate cut-off point was increased from €35,300 to €44,000 representing an increase of €8,700 or 24.6 per cent.
These measures are expected to be in line with wage growth.
In addition, the USC ceiling of the band for the 2 per cent rate was increased in line with the increases to the National Minimum Wage. There was also a significant reduction in the middle rate charge from 4.5 per cent to 3 per cent.
As the Deputy will be aware the most recent Budget provided a range of support to individuals, families and businesses. In particular, the Rent Tax Credit, introduced in Budget 2023, has proven to be a very meaningful support for renters. The credit was extended for a further three years to the end of 2028.
In addition, the following measures are provided to assist offset the costs of early learning and childcare:
• The Accelerated Capital Allowances scheme for Childcare Services encourages employers to develop childcare facilities onsite for their employees. It allows for 100% wear and tear allowances in respect of the capital expenditure incurred on childcare equipment for the year in which the equipment is first used. An accelerated industrial buildings annual allowance of 15% over 6 years and 10% in year 7 can also be claimed for capital expenditure incurred on the construction of a childcare services facility.
• Individuals who provide child-minding services in their own home may claim childcare services relief each year, provided that they do not receive more than €15,000 income per annum from the child-minding income.
It also important to keep in mind the decisions which have been taken to permanently reduce costs on families including
• an increase the subsidy under the National Childcare Scheme, reducing the cost of childcare,
• the free schoolbooks scheme, and
• the introduction of hot school meal.
Finally, as the Deputy will appreciate, decisions regarding taxation measures are made in the context of the annual Budget and Finance Bill processes, at the appropriate time, and having regard to the sound management of the public finances. It is a longstanding practice of the Minister for Finance not to comment in advance of the Budget on any tax matters which might be the subject of Budget decisions.
Question No. 164 answered orally.