HIGH childcare costs are putting a quarter of parents off returning to the workplace, with most low-income families finding them impossible to pay.
A shocking new study has revealed the prohibitive costs of childcare and the extent to which it prevents people returning to work or taking up new jobs.
It showed that a two-child family faces an annual bill of €16,500 for full-time childcare and the costs in Ireland are the second highest in the OECD.
It called for tax breaks and childcare payments to help low-income families get back to work.
The study by Indecon consultants on behalf of Donegal Childcare Committee (DCCC) finds that full-time monthly creche places throughout Ireland cost between €730 and €1,100 per month per child.
It found that the average fulltime cost over a 10-month period is €9,150 for one child and €16,470 for two.
Indecon managing director Alan Gray said that while many children were in less formal childcare settings with childminders or au pairs, the costs of these were still very significant and often insurmountable for those on low incomes.
Nearly 26pc of parents with children at nine months said difficulties with childcare had prevented them looking for a job or training, or made them leave employment.
This rose to 56pc among families on low incomes who said childcare costs prevented them looking for a job.
Indecon said that this tallied with figures showing that parents with dependent children are twice as likely to remain unemployed on the Live Register in any given month as childless claimants.
The report, "Supporting working families – Releasing a brake on economic growth", proposes a number of specific measures to tackle the childcare cost barrier.
It wants a tax incentive to assist low-income families to fund the cost of childcare.
It also wants a direct payment of up to two-thirds of childcare costs for working families on low incomes who receive the Family Income Supplement (FIS). Mr Gray said that these measures would ultimately save the State tens of millions by increasing tax revenues, reducing social welfare and curbing the black economy.
The net cost to the exchequer of funding these schemes to benefit around 20,000 children was estimated at around €19m.
However, the wider economic benefits of encouraging more people to work and therefore increasing tax revenues and reducing social welfare spending would amount to over €28m, the report found.
Children's Minister Frances Fitzgerald, who launched the report yesterday, said she would consider the proposals as part of a review of existing childcare schemes planned for early in the new year to see how incentives could best be targeted.
She said that as employment prospects improved it was vital to make sure families could afford to work.
"What's very clear as well is that when you look at this with an economic lens, that for the country as a whole, affordable, accessible, high-quality childcare is essential for economic growth," she said.
The report found that there are 405,000 households in Ireland with children under 10, and 266,000 of these are families with children under five years of age who face the highest childcare costs.
Childcare costs in Ireland are the second highest in the OECD as a percentage of average wages, it noted. For lone parents, they add up to 45pc of average wages.
DCCC manager Avril McMonagle said research had shown there would be strong interest in such schemes, with close to 60pc of people believing that childcare incentives would allow parents work or increase their hours.
"By facilitating unemployed parents to return to work or remain in employment, these initiatives would see an economic benefit to the taxpayer in the long run," she said.
DCCC commissioned this research because they encountered so many parents and childcare providers for whom childcare costs were a serious barrier to working, she said.
The report uses new cost research as well as existing sources of data such as 'Growing Up in Ireland' surveys.