Childcare centre costs prohibitive for single parents

Clarification on taxable income added (26 January, 2010).

A price survey carried out by Illum among Malta’s day care centres reveals that the average cost for eight hours of day care stands at €246 each month, or €2,954 annually. For two children, a 5 per cent discount is normally granted – bringing the total to €480 per month or €5,760 annually.

But the price does not include food, drink, medicines or even nappies – any additional costs that the children incur while at day care must be paid for by the parents or guardians.

Even those with an annual salary of €18,159 (the highest average wage in Malta –  in the financial services sector) find it difficult to make ends meet and be able to enjoy an annual holiday after having paid for childcare.

However for families with two income-earners, it’s a different story. At the same time, couples where both parents earn minimum wage still means that these need to struggle to even send one child to child care and make ends meet at the same time.

Illum also reports that if a parent declares the day care costs each year as part of that household’s expenses, they are eligible to a tax refund of €1,000 on each child, from their taxable income.

In 2009, it was reported that Malta has 11,000 workers on minimum wage, currently standing at €7,870 taking into account benefits.

The figures below illustrate the impact of day care expenses on Maltese monthly wages:

Annual Wage             €7,870            €12,077           €14,466           €18,159

Monthly Wage           €656                €1,006             €1,205.5          €1,513

Money in hand after paying day care expenses. This does not include NI and other taxes paid.

One child                   €493                €845                €1,043            €1,350

Two children             €343                €693                €892               €1,200

(Figures include the reduction of €1,000 per child on income tax)