# Insovency Service guideline "give up work to mind children"



## Brendan Burgess (27 Mar 2013)

According to the Examiner...



> After days of confusion over whether parents would have to surrender  jobs if their childcare costs were greater than their take- home pay, Mr  Varadkar said such a situation could not be ignored.
> 
> “I know  one or two women who probably don’t make very much money at all from  working, but they do it to keep their position on the career ladder, if  you like, and that is a legitimate thing to do.
> 
> “But if you  can’t pay your mortgage as a result, or buy your groceries as a result,  then that is something that needs to be taken into account in any  insolvency arrangement.



How often will this arise in practice? 

How many cases are there of 
       1)  childcare costs exceeding take-home pay
and   2) the mother, for it is usually a mother, wanting to return to paid       work? 
and  3) they will be in a Personal Insolvency Arrangement or Debt Settlement Arrangement? 

If a woman has two chidren under 5 in child care, it will cost her maybe €1,500 a month or €18,000 a year. 

If she is married and her husband is already paying top rate of income tax, this could be a net pay of €36,000 a year. 

If she is single, it will pay her to work as long as she is earning around €20,000 a year which is not much more than the minimum wage. 

*There will be far more cases of women with children having little or no incentive to return to work if they are in a Personal Insolvency Arrangement

*A woman with two children in a Personal Insolvency Arrangement will have no financial incentive to look for work.  Her net salary will go towards paying childcare costs. Any excess will go to her creditors.  

I assume that the attraction of work for most people is that they gain financially from it. 

The Personal Insolvency Practitioner may well tell a mother with one child who is capable of earning €50k gross that they should be looking for work to earn more to pay their creditors.


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## Nige (27 Mar 2013)

Brendan Burgess said:


> According to the Examiner...
> 
> 
> 
> ...


 
No, with the way individualisation works, she will only have to earn €22,750 per annum to pay the €18,000 child care costs.


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## Brendan Burgess (27 Mar 2013)

Thanks Nige

So that makes for much fewer people again in this category


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