The International Monetary Fund (IMF) wants the Government to give women with small children a five per cent tax credit to encourage them back into the workforce.

According to a report authorised by Ajal Chopra, the man leading the IMF delegation to Ireland, such a tax credit would be designed to help them pay for expensive childcare.

The report echoes comments made in August by the Organisation for Economic Cooperation and Development (OECD) suggesting that Ireland is now the most expensive country in which to get child-care.

According to the survey, which looked at 32 industrialised countries, a double income couple with two children can pay up to 45 per cent of their net income on childcare.

However, a CSO survey has revealed that only a small minority of parents use full-time paid day-care. Most parents rely on relatives, or else the mothers work part-time which is the preferred option of some 60 percent of women, according to surveys.

The IMF report suggests that helping more women into the workplace would boost Ireland’s GDP by one and three quarter per cent.

Ireland’s tax individualisation scheme, however, already acts as a strong incentive for women to return to the workplace after having children.

Stay at home mothers are effectively penalised by the policy. Families where only one spouse is in paid employment pay up to €6,240 per year more than a double-income couple on the same income.

The CSO report on childcare showed that only 11 per cent of children of primary school age are in child care. Most of these are looked after either in their home by an au pair or nanny, or by a paid relative and not in an outside location, the report showed.

The vast majority of primary school children are looked after either by a parent (81 per cent), or by an unpaid relative (nine per cent), during day-time hours.

The OECD suggested that the average Irish bill for childcare is €7,500 p.a, where children are full-time in child-care, and up to €10,000 for couples living in Dublin. However, the study showed that the bill was smaller for single income families.

Other CSO figures also show that married women with children are much less likely to work full-time than men. For example, a third of married women in their 40s don’t work at all. Most of these will have children under 12. Another 127,000 women work fewer than 20 hours per week compared with only 32,000 men.