Irish Mums are among the worst off in Europe when it comes to work, according to a new EU-wide study, with many gaining just €6 out of every €100 earned.
The study’s authors used a “Participation Tax Rate” (PTR) to calculate how much earnings are lost through tax, loss of social welfare benefits, and childcare costs.
It focused on women returning to work as second earners, and found that for an Irish couple with two children and paying childcare costs, there was a PTR of 94%. In other words, for every €100 the mother earns, €94 is spent on tax and childcare, leaving just €6 net disposable income.
That we have the highest childcare costs in Europe is well-known, but to see it in such stark terms is well, eye-opening.
And of course, in real life, families don’t necessarily calculate and budget the way the study does. Childcare is usually treated as an outgoing that’s just like a mortgage (well, exactly like a mortgage) or any other household expense – it’s not normally down to the mother to be responsible for covering it with her salary.
But for women who have been at home for some time – either on maternity leave or career breaks or having given up work while kids are small – it’s impossible to weigh up returning to work without looking at it in those terms – asking if potential salary cover childcare.
Going back to work means more income and more outgoings. If the difference between the two is just €6 - and that’s without factoring in commuting, food or other work-related expenses – it’s not hard to see why some families would decide it’s not worth it.
One person who wondered if it was all worthwhile was Sarah*, who was made redundant a number of years ago. “When I found myself on the job market with two small children I spent hours ‘running the figures’ to see if it was actually financially worth my while finding another job and how much I needed to earn to break even,” she says. “At that stage I transferred all my tax credits to my husband and could easily see what I was contributing to the family by working. Now I have three kids, and once childcare and commuting costs are taken into account, I'm left with €26** out of every €100. I definitely think that there are huge numbers of mothers who simply can't afford to return to work, especially those with more than one child or who work in lower paid roles. I also know families where the father has adopted the role of stay-at-home parent because the mother earned more. Parents really need some help with childcare costs to keep mothers in the workforce.”
Sarah admits that her PTR of 26% isn't at the lower end of the scale and is conscious that crèches are more expensive in Ireland’s cities than in her hometown, which helps keep her costs down. But it’s nevertheless disheartening. “My husband works too, and we pay the mortgage and bills jointly, but I find it very frustrating that I work hard and commute, and so little of my salary belongs to me.”
For some, the PTR sounds reasonable on paper, but because of part-time hours and relatively high childcare costs, there’s very little left over each week. Niamh, a mum of two pre-schoolers, has a PTR of 37%, which is a lot more than the 6% reported in the study. But in real terms, this equates to just €100 per week total earnings after childcare. This goes towards mortgage payments and household bills. As a part-time worker, her tax is low, but childcare costs a huge 61% of her net pay.
“It was my choice to change my hours to five mornings,” says Niamh, “So I'm not complaining. I will have no childcare for my older daughter once she starts school next year.” Like so many parents around the country, she is trying to ride out the crippling childcare years in the hope of still having a career on the other side.
Another mum-of-two, Lisa, was in a similar situation until recently. “When I had two in full-time crèche I was left with about €50 a week, which barely covered my petrol costs for getting to-and-from work,” she says. At that point, her PTR was 13%.
“The crèche-going years are definitely crazy-expensive, and it eases as the children move on to school. If you have to pay for after-school care though there is still a high-cost factor involved.” Lisa currently has one child in school and one in ECCE pre-school, and she works part-time. Her PTR is now a much better 74%.
Jane, who has two children, was at one point gaining just €19 for every €100 she earned. This was due to high crèche fees and working part-time hours. “While the pay was not what I wanted it to be, I felt the part-time aspect and flexibility made up for it,” says Jane. “There was never any problem taking time off if the kids were sick or changing my hours around school times, which to me was almost like a form of payment.”
So like Niamh, she was just about breaking even by working, but doing so to maintain a career.
If however childcare was subsidised by the state, instead of eating up almost 80% of Jane’s net pay, she would have had something more to show for her time spent at work.
Elaine has three children and has calculated that when she employed a childminder in her home, she was gaining €28 for every €100 she was earning. She hasn’t included the additional costs that come with hiring a childminder – food, heating and electricity, meaning the real gains were less again. So why did she do it?
“Well, I did it for other financial reasons, for example, we wouldn't have got a decent mortgage based on one salary. Also to keep my toe dipped in the working world – I worked three days a week. I'm not sure I could have ever been a full stay-at-home Mammy. I also had the foresight to know that this childcare situation wouldn't last forever, that someday they would all be in school - maybe not foresight, I'm sure some wise person told me! It's not so bad now, since my youngest started school. I can fit in a few more hours of work, and some at weekends. Now I hold onto about €53 of every €100 I earn.”
Of the five contributors here, only two have PTRs under 20%, and nobody is close to the rate of 6% that was highlighted in the survey. The figures would be lower if Job Seeker’s Benefit of €188 per week were included – Niamh, Lisa and Jane would all have doubled their weekly income if they gave up work and applied for social welfare assistance instead. But they wanted to maintain careers, so working to pay childcare was the choice they made.
And perhaps this isn’t a representative sample; maybe there are many women around the country with a PTR of 6%. Or perhaps women in lower paid jobs just can’t avail of expensive childcare – they may rely on grandparents or extended family, or sharing the responsibility with a partner who works at different times of the week.
Whatever the answer, one thing is very clear – we have the highest childcare costs in Europe and the current situation is completely unsustainable. We need state investment to provide high-quality childcare places at a reasonable cost, or we will continue to lose talented women (it’s almost always women) from the workforce. Everyone should have the option to work or stay at home, but far too many people are having that choice removed. Nobody should be working just to cover childcare.
*all names have been changed
**PTRs calculated here are based on tax and childcare – possible social welfare benefits haven’t been included as respondents wouldn’t qualify for long-term means tested social welfare.
Andrea Mara is a shoe-obsessed, coffee-loving mother of three from Dublin. When she’s not working or looking after her three kids, she’s simultaneously making tomorrow’s school lunches, eating Toblerone and letting off steam on her blog.
