Barry Andrews (Dún Laoghaire, Fianna Fail)

That is contradictory and shows the lack of any coherence in the Labour Party in Opposition. One wonders what it would be like in Government. I wish to address the House on the Financial Emergency Measures in the Public Interest Bill 2009 as it includes provision under section 17 to effect changes to the early child care supplement. The early child care supplement was announced in the 2006 budget, as was the decision to create the Office of the Minister for Children, now the Office of the Minister for Children and Youth Affairs. The establishment of that office has been an important development in the delivery of Government policy and services for children and young people because responsibility for all the key areas which affect children and young people, other than school education and health, have been brought together in one office with ministerial input at Cabinet.

Deputies will be aware of the constituent elements of my office which include the former national children's office and the area of child welfare and protection. The child care directorate and the youth justice service, both of which were areas previously under the Department of Justice, Equality and Law Reform, and the areas of early years education and youth affairs from the Department of Education and Science are also located within my office. Maintaining a general strategic oversight of bodies with responsibility for children's services is also a key area of responsibility for my office.

As Minister of State with responsibility for these areas, I am aware of the benefits and coherence which the office brings to putting children and young people at the centre of our service delivery. However, the role of my office in harmonising policy issues that affect children in areas such as early childhood care and education, youth justice and other areas is not the object of today's debate. I have referred to it briefly to set the background against which the early child care supplement was introduced in 2006.

The early child care supplement was introduced as a direct, non-taxable, quarterly payment of €250, equivalent to €1,000 per annum. The purpose of the payment was, and continues to be, to assist parents with the higher costs associated with caring for preschool children. Payment of the early child care supplement is administered on my office's behalf by the Department of Social and Family Affairs.

When introduced, the early child care supplement was paid in respect of all children eligible for child benefit who were under six years of age, the rationale being that six is the age at which school attendance becomes compulsory. The approach taken at that time was the most generous possible to ensure no child would lose eligibility for the payment before starting school. The payment was increased by 10% in 2008 to €275 per quarter, equivalent to €1,100 per annum.

As we are aware, the economic environment has changed radically in recent months and it is necessary to reduce public expenditure and realise savings where possible. This process began in the 2009 budget which introduced a package of targeted interventions to contribute to the responsible management of the public finances. Included in these measures was a reduction in the age limit for eligibility for the early child care supplement from six years to five and a half years. At the same time, the step was taken to change the payment frequency from quarterly to monthly. In setting a monthly rate, the payment was rounded upwards to €92 per month, bringing the annual payment to €1,104.

The changes to the early child care supplement as a result of the budget will result in savings of some €93 million this year and €54 million in a full year. A greater level of savings arises this year owing to once-off savings of €39 million as a result of the change from quarterly to monthly payments. The changes to the early child care supplement were made with a view to continuing to target additional support to parents of preschool children. The same rationale underlies section 17 which provides for further amendments to the early child care supplement to achieve the additional savings required. In effect, the period of eligibility for the payment will reduce to children aged up to five years, the point at which the majority of children have started school.

In addition to providing for a reduction in the age limit for eligibility from five and a half years to five years, section 17 provides for a reduction in the rate of payment from €1,104 per annum to €996 per annum, to be paid in monthly instalments of €83. The changes to the payment proposed will result in savings of the order of €57 million this year and €77 million in a full year.

When it was first introduced in 2006, the supplement was payable in respect of all children eligible for child benefit who were less than six years of age, but the reality is that most children start school at the age of four or five, well in advance of their sixth birthday. In addition to continuing to oversee the early child care supplement, my office will also continue to provide significant levels of funding to support targeted interventions for disadvantaged children and young people. Funding in this regard will amount to almost €88 million this year. Taking account of this investment in children and young people together with the continued payment of the early child care supplement, I am satisfied the necessary amendments proposed in the legislation are targeted to the greatest possible extent given the major challenges facing the economy.

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