Dáil Éireann Debate, Wednesday - 1 October 2025
161. Deputy Shane Moynihan asked the Minister for Children, Disability and Equality if she has considered the impact of the automatic enrolment retirement savings system on childcare providers as an additional cost; if there is guidance available for providers on this; and if she will make a statement on the matter. [52341/25]
Amharc ar fhreagraAmong other objectives, Core Funding supports the ability of service providers to meet the additional costs resulting from the EROs for Early Years Services, as it provides increases in funding to early learning and childcare service providers to support improvements in staff wages, alongside a commitment to freeze or reduce parental fees.
The base rates in Core Funding have been developed using the various components associated with the cost of delivery of service provision such as; staff pay and conditions, including contact and non-contact time, holiday pay, sick pay and other employer costs such as pension contributions; administrative staff/time and non-staff overhead costs. These components have been factored into the calculation of the budget for Core Funding since the scheme began in 2022.
Data available to the Department shows that the 2022 and 2024 Employment Regulation Orders did not absorb all of the available Core Funding signalled for staff pay and graduate leaders in previous years.
Core Funding has seen consistent increased State investment to the sector year on year, and is set in year 4 to be worth over €390 million contingent on the establishment of new minimum rates of pay in the sector through updated Employment Regulation Orders. This is an increase of over 50% since the scheme began in September 2022 with an allocation of €259 million.
This allocation includes the €45 million ring-fenced funding which is available to support providers in meeting increased costs resulting from further increases to the minimum rates of pay. The independent Joint Labour Committee negotiate new minimum rates of pay for the sector based on all the information available to them, including the full suite of existing and new funding available to the sector and the imminent introduction of auto-enrolment pensions. This measure was signed into law in 2024, in October 2024 it was announced that it would take effect in September 2025. It was announced in April of this year that this measure will now take effect in January 2026.
Although, the cost of delivery components such as improvements to staff pay have been used to derive the base rates the eligible areas of expenditure of the Core Funding grant are much broader. Partner Services can choose how to spend their Core Funding grant in accordance with the approved areas of expenditure outlines in the Funding Agreement.
The Department of Social Protection is responsible for the introduction of the auto-enrolment scheme and a range of resources for employers and employees are available.
The Department for Children, Disability and Equality is planning a bespoke online information session, in conjunction with the Department of Social Protection, on auto-enrolment for ELC and SAC service providers. Further information on that session will be shared with service providers as soon as they are confirmed.
