Dáil Éireann Debate, Tuesday - 30 September 2025
789. Deputy Emer Currie asked the Minister for Children, Disability and Equality the estimated cost of granting every recipient the maximum rate of subsidy available under the national childcare scheme; and if she will make a statement on the matter. [51733/25]
View answerThere are two types of subsidies available under the NCS.
• A universal subsidy which is available to all families with children under 15 years old. This subsidy is not means tested and provides €2.14 per hour towards the cost of a registered childcare place for a maximum of 45 hours per week.
• Income Assessed Subsidies are available to families with children aged between 24 weeks and 15 years. This subsidy is means tested and will be calculated based on individual circumstances. The rate will vary depending on the level of family income, child age and educational stage, and the number of children in a family.
It is assumed that the Deputy is requesting a cost estimate for every recipient, regardless of their subsidy type, to receive the maximum income-assessed subsidy available. As the maximum rate is based on age, we have used a rate of €4.35, as this is the highest rate available for children over 1 year old. Although the rate for under 1s is higher, there is a proportionally lower number of children of that age in the system. As this would affect the results of this request, children under 1 are assumed to continue receiving a subsidy of €5.10, and all other children would receive a subsidy of €4.35.
Officials in the Department used the ESRI SWITCH model to estimate the quantum of this proposed change and then applied it to the Department's Budget 2025 allocation for the NCS (€529.8 million).
According to the SWITCH model, the estimated cost of granting every recipient the maximum rate of subsidy (€4.35 per hour) would be €426.22 million per year. However, as the figures above are calculated using estimates, a number of caveats apply. The costing is on the basis of a static system; that is, the model assumes that the level of usage of eligible early learning and childcare does not increase or decrease but remains static. Any changes to subsidies would likely create a change in behaviour of families, for example, return to/increased labour force participation and use of formal ELC for the first time.
Any growth in the size of the sector in response to this behavioural shift would result in a corresponding increase in the cost to the government of National Childcare Scheme subsidies. It would also result in corresponding increases in the cost of some other funding schemes, e.g. Core Funding, Equal Start and AIM. In the absence of behavioural response estimates, these impacts have not yet been modelled.
To ensure the supply of places rises to meet the likely additional demand, the Department would need to ensure sufficient supply of ELC and SAC places which would require expansion of existing services, establishment of new services and workforce supply. These may require significant increases in public investment in (a) capital funding to support the creation of additional places, and (b) measures to support increases in staff wages (e.g. via Core Funding for example) to strengthen recruitment and retention of early years educators and school-age childcare practitioners.
Work is currently under way to develop an Action Plan to build an affordable, high-quality, accessible early learning and childcare system, informed by stakeholder consultation. This will set out future steps to reduce the cost of early learning and childcare further to €200 per month over the lifetime of the Government. This work will include detailed analysis of the costs of achieving these reductions, over time.
