Dáil Éireann Debate, Thursday - 4 July 2024
430. Deputy Richard Boyd Barrett asked the Minister for Children, Equality, Disability, Integration and Youth the estimated full-year cost of increasing childcare subsidies to 100% of fees paid by parents availing of childcare subsidies. [28843/24]
View answerThe Deputy has requested the full year cost of increasing subsidies to 100% of fees paid by parents availing of early learning and childcare subsidies.
It is assumed that the Deputy is referring to the National Childcare Scheme (NCS) which is provided by my Department to offset the cost of early learning childcare to parents.
My Department does not hold individualised fee data for parents as these are local agreements between parents and providers; instead an average weekly full time fee derived from the Annual Early Years Sector Profile 2023 is used in the below calculations.
Assuming a 45-hour week for all children, officials in my Department estimated the cost of increasing the NCS hourly minimum (universal) subsidy so that all fees are covered by the NCS. The below new NCS minimum (universal) subsidy was calculated to achieve the desired outcome.
|
- |
NCS Minimum subsidy rate |
|
Current |
€1.40 |
|
100% fees covered by NCS |
€4.38 |
The ESRI SWITCH model was then used to estimate the quantum of this change and applied to the Departments baseline cost of the NCS for 2024. The results are given in the below table.
|
- |
NCS Minimum Subsidy rate (€) |
Cost of change (€m) |
|
Baseline |
1.40 |
0 |
|
Change |
4.38 |
442 |
As fees can vary from service to service and depending on parent’s usage, impact estimates must be made as an average of the overall parental financial contribution to fees for their early learning and childcare.
The impact of this change will also vary based on the income level of the applicant. Parents on the maximum subsidies under the income assessed subsidy, that is those on annual income of €26,000 and below will see no change in their fee, as they are already in receipt of the highest available subsidy. For remaining parents, with income above €26,000 under the income assessed subsidy, reductions in fees will vary according to income levels, with those currently in receipt of the lowest subsidies benefiting the most.
These estimates come with some important caveats. Firstly, the above costings are based on the NCS as it operates currently and its rates as time of this PQ being asked. As part of Budget 2024 I announced an increase to the NCS universal subsidy from €1.40 per hour to €2.14 and an extension of the NCS to a larger cohort of childminders from September 2024. As these are not yet implemented, the impact of these changes have not been factored into the above costing.
Finally, the costings are on the basis of a static system; that is, the model assumes that the level of usage of eligible early learning and childcare remains static. Any changes to subsidies may create a change in behaviours in families, for example, women returning to workforce and using formal early learning and childcare for the first time.
