James Reilly (Dublin North, Fine Gael)
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My Department currently administers four targeted childcare programmes to support low income families. These are:

1. Community Childcare Subvention (CCS) Programme

2. Childcare Education and Training Support (CETS) Programme

3. After-School Childcare (ASCC) Programme

4. Community Employment Childcare (CEC) Programme

The combined budget for 2016 of these programmes is €70m.

The recent Report of the Inter-Departmental Group (IDG) on Future Investment in Childcare considered these targeted childcare programmes as part of their work. As these programmes are very complex to administer and have differing access and eligibility rules, the IDG made recommendations for their reform. It was recommended that these programmes be merged into one single targeted childcare programme. The Report proposed that parents will apply for a childcare subsidy if both parents (and one parent in the case of a one-parent family) are either working, studying or on an approved training course with eligibility for a childcare subsidy under the new programme being determined by income only. It also proposed that childcare subsidies provided under this programme would be available, through registered childcare providers only, to children from birth - 12 years of age, thus covering pre-school, after school and out-of-school childcare.

The Inter-Departmental Group set out a number of options which are detailed in the following tables. In option 1-4 the hourly fee structure is €4.25 for basic services or €5.00 for services meeting higher qualification requirements. In options 5-8 the hourly fee structure is €4.50 for basic services and €5.50 for services meeting higher qualification requirements.

Table 1: Indicative fees and parental contributions

-		Fee Charged					Maximum Hourly Parental Contribution
-	Basic Capitation	Higher Capitation	Band A	Band B	Band C	Band D	Band E
Fee structure 1: Option 1	€4.25	€5.00	€1.00	€2.00	€3.00	€4.00	€4.25
Option 2	€4.25	€5.00	€0.75	€1.50	€2.25	€3.00	€4.25
Option 3	€4.25	€5.00	€0.75	€1.50	€2.25	€3.00	€4.00
Option 4	€4.25	€5.00	€0.75	€1.50	€2.25	€3.00	€3.75
Fee structure 2: Option 5	€4.50	€5.50	€1.00	€2.00	€3.00	€4.00	€4.50
Option 6	€4.50	€5.50	€0.75	€1.50	€2.25	€3.00	€4.50
Option 7	€4.50	€5.50	€0.75	€1.50	€2.25	€3.00	€4.00
Option 8	€4.50	€5.50	€0.75	€1.50	€2.25	€3.00	€3.75

The number of children assigned to Bands A, B, C, D and E represent the number of children at or below 60%, 70%, 80%, 90% and more than 90% of the median equivalised disposable nominal household income respectively. An administrative cost of running the scheme is also included at 1.5% of the overall cost.

Table 2 sets out the cost of each of these options based on Stage 1 (targeted and tapered provision) and Stage 2 (tapered but some subvention for all families) for each of the above options.

Stage 1:

- Option 1: has a tapered contribution from parents in Bands A-D starting at €1 per hour to €4 per hour.

- Option 2: has a tapered contribution from parents in Bands A-D starting at €0.75 per hour to €3 per hour.

- Options 5-6 set out similar parental contributions with a higher fee structure Fee Structure 2.

Stage 2:

- Option 1:has a tapered contribution from parents in Bands A-D starting at €1 per hour to €4 per hour. Band E parents pay the full basic rate i.e. price cap but no subvention.

- Option 2:has a tapered contribution from parents in Bands A-D starting at €0.75 per hour to €3 per hour. Band E parents pay the full basic rate i.e. price cap but no subvention.

- Option 3:has a tapered contribution from parents in Bands A-D starting at €0.75 per hour to €3 per hour. Band E paying €4.00 per hour (i.e. €0.25 per hour subvention and price cap).

- Option 4:has a tapered contribution from parents in Bands A-D starting at €0.75 per hour to €3 per hour. Band E paying €3.75 per hour (i.e. €0.50 per hour subvention and price cap).

- Options 5-8 set out similar parental contributions with a higher fee structure (Fee Structure 2).

Table 2: Costs of each option

-		Band A-D (Stage 1) €m		Band A-E (Stage 2) €m
-	Total Cost	Additional Cost	Total Cost	Additional Cost
Option 1	€150	€79	€156	€86
Option 2	€188	€118	€195	€124
Option 3			€236	€166
Option 4			€244	€174
Option 5	€167	€97	€176	€106
Option 6	€206	€135	€214	€144
Option 7			€271	€200
Option 8			€279	€208

Note that costs indicated include administration costs.

This recommendation of the Inter-Departmental Group was considered by Government during the Estimates process for Budget 2016 and funding to convene a dedicated Design Team to develop a single affordable childcare programme was allocated, with the intention that the single affordable childcare programme will be in place in 2017.