The Supreme Court decided today that childcare payments are tax deductible. The court of five judges Eliezer Rivlin, Miriam Naor, Edna Arbel, Elyakim Rubinstein, and Esther Hayut dismissed the appeal by the assessing officer for the Dan area against a decision by the District Court which confirmed the deduction from income for tax purposes of payments for childcare.
The judges rejected the state's arguments that the ruling would mainly serve well to do families in which both parents worked. The judges also ruled that the decision would also apply to men.
The legal battle began with Adv. Vered Pery, who sought to deduct payments to a daycare center for her son in the tax year in dispute. The assessing officer did not allow the deduction of the childcare payments from her income, and Pery appealed to the District Court.
The Supreme Court decision was written by Judge Eliezer Rivlin. He accepted the District Court's stance, and held that if the child were not supervised, Pery would not have been able to earn any income at all. Therefore, he decided, the expense was not just a condition for going out to work, but an expense required in order to earn income.
Rivlin said he would allow the Knesset to legislate in order to regularize the matter.
MK Ronit Tirosh welcomed the judgment, saying that together with a bill now before the Knesset it would empty the opposition of the Ministry of Finance to tax deductible childcare of all content. "The Ministry of Finance's objections have all along been hard to understand," said Tirosh, "since recognizing these expenses will only encourage more women to join the workforce and bring about a situation in which they will stop being a burden on the state and the National Insurance Institute because of the need to pay them income supplements."
Adv. Talia Livni, chair of Naamat - The Movement for the Advancement of Status of Women, which runs daycare centers, said, "This is a giant step towards making the world of work suitable for mothers, but we must not forget all those women who do not reach the tax threshold, and therefore the next stage is free daycare."
Published by Globes [online], Israel business news - www.globes.co.il - on April 30, 2009
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