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Dublin: 9 °C Sunday 26 May, 2013

Working costs parents up to €400 a week – provisional study

However, the costs fall dramatically as children grow older and begin school.

Commuters at Heuston Station in Dublin
Commuters at Heuston Station in Dublin
Image: Photocall Ireland

TAKING UP A job can cost parents up to €400 a week more than being unemployed, according to a provisional study carried out by researchers at an economic think-tank.

However, the potential costs fall dramatically as children grow older and begin secondary school.

But the working paper drawn up by members of the Nevin Economic Research Institute (NERI) found that there were significant costs associated with working for parents of children of all ages.

Single parents are potentially hardest hit financially if they take up work. The paper, called The Cost Of Work and described as a “work in progress” by NERI, found that a single parent of two pre-school children would face bills of at least €400 extra each week if they took up full-time employment.

This suggests the parent would need a well-paid job in order for it to be worth giving up the One-Parent Family Payment, which is given to single mothers or fathers earning less than €425 per week.

The potential costs for single parents fell to €150 a week when both children are in primary school, and just €50 in secondary school.

The ESRI faced controversy this week when a working paper appeared to suggest that 44 per cent of parents would be better off on benefits than working. The think tank has since revised the figure to 19 per cent.

Two-parent households with two kids face additional bills of up to €232 a week in urban areas, and €219 in rural areas, before the children start school. This falls to around €70 in both urban and rural areas when children begin second-level education.

For single adults without children, the costs of taking up work are much less. In urban areas the study suggests that additional bills could be €2.77 a week, rising to €56 in rural areas to account for transport costs.

The working paper was drawn up using research on the cost of minimum standards of living.

Read: Just 10-20 per cent of people better off on dole, says ESRI>

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Comments (26 Comments)

  • paul 17/06/12 #

    couple cross the road from me don’t work, have a nicer car, sky sports and are with their kids all the time. I work 50 hours a week easy see the kids briefly during the week and am broke paying creche fees. its bullshit. I get hit for working while they get free money for staying at home. that’s how it looks to me folks. totally unfair system but I expect nothing else from the so called leaders of this country.

    Reply
  • At the end of the day it’s all about the cash left in your wage packet after all the deductions that a working persons is responsible for, and when I see my wage slip I sometimes wonder why do I bother? If I want to make any kind of purchase I know I’ll have to earn nearly twice that ie if something cost me €500 I’ll have to earn nearly €1000gross to come out with €500 net

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  • Here in sweden i have two kids in pre school 45hrs per week.the combined cost per month for both……….117 euro,funnily enough i take it for granted unless reading articles like this.btw i’ve never paid more than 32% tax here..used to pay 48% back home not to mention prsi.swedens not perfect but maybe a leaf outta of the swedish book…well not withstanding the present climate.

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  • The problem is many newly created lone parents are forced to give up well paying jobs. As there is no statutory maintenance system in this country and poorly enforced maintenance orders, the remaining parent can be left carrying an unfair burden, Also there is no allowance for cost of work in calculating benefits,. Hence is someone is on a net income of €670 per week but with two pre school kids they are seen as receiving €670 when in fact they are only receiving €270. They would not qualify for rent allowance, mortgage interest subsidy, medical card or any sw help. They would be forced to give up their job and being wholly dependent on the state and trapped in poverty. This ‘all or nothing ‘ approach needs to change where real attempts are made to keep people in work. At the very least, childcare needs to be tax deductible and disregarded in terms of income calculations. A little support to struggling workers is one way of reducing welfare costs. It is not because welfare rates are too hight, but that there is no thought around supporting workers.

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    • Rent allowance in the current climate should be cut severely. Every town and village has vacant property and NAMA has its own portfolio of some 8000 assorted units.

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    • i agree in principal adam but they are terrified of the inevitable mass of mortgage defaults that would ensue, at the moment it just seems like an indirect way to bail out banks, the hypocrisy of a government when they insist it isnt governments place to create jobs but they dont mind buying private landlords’ properties for them

      Reply
    • Well thought out reply Louise benefits should assist in short term not grind down someone willing to work and make it impossible to lift oneself back to full time employment
      I could never understand why not one politician has backed state aided child minding or creche facilities to encourage women back into the work force and off state aid its a no brainer we all win is it a male v female politician priority thing ?
      Will it be up to groups in the community to look after this need yet again?

      Reply
  • I think child care costs a criminal amount of money, when my Children were young it cost £5 a week, with a lunch that was in the eighties so not that long ago, Child minders need to get with the economic climate…

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    • Totally agree. We need to introduce a Scandinavian model of child care into this country. But that would require thinking, planning and foresight. Something our leaders lack in abundance!

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    • child minders have bills also. tax to be paid employee prsi etc. my local creche costs 125 a week. thats 25 quid a day. a five hour day means a fiver an hour. now take away tax etc and tha hourly rate for each child is quite low. why should a crech worker bother with college if they cant expect to be paid. im not talking about ur unquallified nxt door neighbour minding ur kids but a skilled trained individual. why should crech workers take more of a pay cut than any one else.

      Reply
    • paul 17/06/12 #

      Swedish model all the way. will happily pay higher tax for good social policy

      Reply
    • and what about the workers who have no kids why should they pay higher tax. then should some one in dublin pay more tax because child care costs are higher.

      Reply
    • They charge that because they need to pay their staff who all have to have qualifications, there is a premises to run, with rates. They have strict regulations on how many children are per minder, etc.

      The fair way to account for this is not to tax everyone to subsidise it, but to do like most other countries do, and have a tax credit for childcare.

      Full time childcare for where I am costs 16,000 euro per year, per child, for their first three years, which drops as she goes to school to just after school rates. University is about 2,000 a year, an eigth of the cost. Only 17 more years to go til it gets cheap. Yay!

      Reply
  • It seems as though either low end wages need to rise or welfare to parents needs to be cut and put into direct childcare services instead. Alternatively some combination of both. We need to incentivise parents to stay working when they are or get back to work when and if they want or choose to . The problem is childcare cost in this country are still quite high and services are still underfunded by the governement, we need something a bit more like the scandinavian model where childcare and pre-school facilities are a right for children and where working hours are made more family friendly.

    Reply
  • I am a single parent. I’m nearly finished my masters so I’m hoping I’ll get a job after. If not I will move with my daughter. It’s about more than just money, it’s so degrading being on social welfare. I struggle on the money I get. Peoples attitudes towards people on welfare is horrible. They wouldn’t be saying the same thing if they were in that position. The fact is unless you live at home rent free or in a council house where you pay 20 a week or whatever, you just don’t have the quality of life people seem to think welfare recipients have. Things I used to take for granted when I had a job like getting my hair done, has become a once yearly thing. I reckon ANYTHING is better than being on welfare. I personally can’t wait to be free of it for good. Even if I end up not earning that much. At least I’ll have my dignity back.

    Reply
    • paul 17/06/12 #

      wasn’t directing my comment at people in your position where your trying. the other lot.

      Reply
    • mattoid 17/06/12 #

      Good on you Fiona and best of luck with it.
      Luxuries that you took for granted when you were working (you used the example of the hairdressers, others have mentioned sky sports and a nice car) aren’t supposed to be freely available to people on welfare though!

      Reply
    • A nice car.. No. But usually parents need a car. You don’t get free tax and insurance that’s for sure. If they can afford a nice car and sky sports… I hate to say this… Cash in hand job?

      Reply
  • With not enough jobs to go round, why harass parents to work, when it is obvious that young children especially will benefit from being with a parent rather than in an institutional setting. It is a tragedy that mothers of babies have to go back to work before a year is up, even if they do not want to. What kind of society is that? As for costs of childcare, if you are handing over care of your child to somebody to be loco parentis, I assume you would want them to have the best training (eg in child development) so they can give your child what they need in terms of a nurturing, loving learning environment? They have to learn so much and they are professionals – why should they not get paid for it? They are certainly not overpaid. As for Rent Allowance, it is gone down to about €107 max a week for a couple. Try to find a dwelling for you and your children for that! It is documented that landlords are not putting their rents down (many cannot afford to because their mortgage payments have not gone down), and there is evidence that many low income and unemployed people are already having to top up their rents because they have no choice.

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    • Please stop moaning. People in this country want everything for nothing.
      Hard work never killed anybody. We should ban the dole unless you can prove that you are actually trying to find work.We are a nation of moaners and wringers.

      Reply
    • P Wurple 17/06/12 #

      Not enough jobs to go around so women should give up their hard earned careers to the local layabout? What fresh stinking pile of crap is this I am reading.

      Cos just anyone can do everyone elses job right?

      You need some specialised qualifications and experience for most roles above minimum wage. The unemployed dimwit drugdealer next door to me could not, under any circumstances, do my job.

      Reply
  • My suggestion. Let’s remove tax individualisation and bring things back to single income households so that a parent can stay at home, look after the house and mind the children whilst a single earner has enough income to raise a family. This would free up jobs for more single income families and solve unemployment.
    Dual income living is a con.

    Reply
  • Child benefit should be only paid to those that actually need it! My wife’s sister and her husband are teachers with three kids, and they save the child benefit for the kids! It’s completely crazy!!

    Reply

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