Daily Israel Report

Finance Ministry: Defer Child Care Tax Credit by 2 Years

Finance Minister Yuval Steinitz plans to ask the Cabinet Sunday to defer tax credits for day care costs by at least two years.
By Hana Levi Julian
First Publish: 6/14/2009, 9:13 AM

Flash 90

Finance Minister Yuval Steinitz is hoping to put off economic relief for working families with young children by at least two years in a proposal he will present to the Cabinet at its weekly meeting Sunday morning.

Steinitz said he will instead propose a gradual increase from 2011 to 2015 in the value of the existing tax credit for the costs of day care. The High Court recently ruled that working parents can deduct the expect from income taxes.

The Finance Minister's proposal is intended to prevent immediate implementation of the High Court order to extend tax credits (points) for child care to all working parents of children under age five. The new tax credit is supposed to go into effect this year.

In a statement, Steinitz defended his proposal, saying that it would help more families. The High Court decision, which requires the government to provide an exemption for child care costs, was "regressive," he said, and would not help those who needed help the most.

Advocates for the childcare exemption accused Steinitz of trying to sidestep the court order in order to save money.

"The Finance Minister is mistaken if he thinks he will be able to take the issue off the table by adding a single credit point for families with young children instead of recognizing the huge outlays for childcare by working parents, which would save much more in taxes for working families," said an official of a woman's rights group.

Talia Livni, chairperson of the Na’amat Movement for the Advancement of the Status of Women, slammed the proposal. She called it a “proposal that is embarrassing, mocks the High Court’s ruling, and doesn’t help working mothers one iota.”

Knesset Opposition leader and Kadima party chairwoman Tzipi Livni sent an alternative proposal to the prime minister and government ministers that includes a detailed program to completely subsidize daycare centers instead.