The information required to give an accurate figure on the number of families on enhanced National Childcare Scheme subsidies that were negatively affected by the fee adjustment process in 2024 is not currently available to the Department.
1145 applications to the Fee Increase Assessment process were received by the Department, of which 898 (78.48%) were granted permission to increase at least one fee up to an approved level.
Only services with fees below the average in their county were eligible to apply, and approval to increase was subject to clear demonstration of need through Departmental evaluation of key financial and operational information relating to each business. Most of these services had seen their fees frozen at September 2021 levels, as per the effective fee freeze which has been in place since the launch of Core Funding, with many others having had their fees frozen for even longer periods. It’s vital that the Department support the viability of these services with the lowest fees to ensure fairness and balance in the market.
At the same time, the Department remains committed to the goal of actively promoting affordability for parents through the phased progression of the Core Funding fee management system, and I am confident that the introduction of maximum fee caps for all Partner Services in year 4 of Core Funding has been of great benefit to families who are facing the highest fees across the country.
Under the new fee caps, the highest possible fees will be no more than €295 per week for a full-day place of 40-50 hours per week. Once the National Childcare Scheme subsidy is taken into account, the maximum fee for a parent in this situation will be less than €200 per week.
This latest measure builds on a range of supports already in place.
The Early Childhood Care and Education (ECCE) Programme provides two years of pre-school without charge and has participation rates of 96%. Over 70% of families on low income report they could not send their child to pre-school without it.
The National Childcare Scheme (NCS) complements ECCE, giving universal and targeted subsidies to reduce costs to parents. Recent improvements include the extension of the universal subsidy to children under 15 and two increases to the minimum hourly subsidy, now worth €96.30 per week for 45 hours.
Almost 220,000 children benefited from a subsidy in 2024. Since last September, children in childminding settings can also benefit from National Childcare Scheme subsidies.
In addition, the fee management system introduced through Core Funding has made sure the investment in affordability is not absorbed by unnecessary fee increases. Core Funding has enjoyed high participation rates to date, with 93 per cent of services taking part.
Core Funding has seen consistent increased State investment to the sector year on year. An allocation of over €420 million was secured in Budget 2026 for Core Funding – representing an 18% year-on-year increase on the 2025 allocation, and a 62% increase over the initial Core Funding allocation of €259 million secured in 2022. Within the 2026 allocation, €20.6 million in brand new full-year funding will go toward supporting Partner Services in meeting fee management conditions in year 5, including further reductions to the maximum fee caps.
The recent publication of Shaping the Future, the Early Years Action Plan Phase 1 Report sets out the next steps for building an affordable, high-quality, accessible early learning and childcare system, informed by stakeholder consultation. 2026 actions on affordability will include further reduction in some of the highest fees paid by parents through Core Funding; and reduced fees for lower-income families through the National Childcare Scheme, to ensure that families with incomes below the relative income poverty line receive the maximum subsidies.
The base income threshold for the NCS will be increased from €26,000 to €34,000 from September 2026. This will mean that applicants with a base reckonable income of €34,000 or below will qualify for the maximum subsidy rate. This change will improve the affordability of childcare for up to 47,000 children from lower income families.
Additionally, the upper income threshold will increase from €60,000 to €68,000.
Through increasing the NCS Income-Assessed thresholds, families whose reckonable income falls within the new thresholds will receive a higher subsidy, as they will move to a higher income-assessed rate, according to their individual circumstances. Increasing the Multiple Child Discount will further reduce the reckonable income for families with 2 or more children, allowing them to receive a higher subsidy, thereby reducing the cumulative burden of cost.
Most families currently receiving an income-assessed subsidy will see an increase in their rate, due to these changes. This investment will also support additional families to move from their existing universal rate to an income-assessed subsidy.
During 2026, work will be undertaken to inform the development of Phase 2 actions including affordability measures. Phase 2 actions will be published later in 2026 and which will relate to the period 2027 to 2029. This includes the long-term goal of reducing the cost of early learning and childcare further to €200 per month over the lifetime of the Government.
