Written answers

Tuesday, 11 July 2017

Department of Children and Youth Affairs

Child Care Costs

Photo of Kathleen FunchionKathleen Funchion (Carlow-Kilkenny, Sinn Fein)
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703. To ask the Minister for Children and Youth Affairs further to Parliamentary Question No. 656 of 23 May 2017, the estimated number of children for the targeted scheme between six months and three years of age for 2017 (details supplied). [32130/17]

Photo of Katherine ZapponeKatherine Zappone (Dublin South West, Independent)
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The Affordable Childcare Scheme (ACS), once introduced, will include both universal and targeted elements. It is currently estimated that when the scheme is initially introduced approximately 16,000 children aged between 6 months and 3 years of age will benefit from targeted subsidies within the ACS.

Of the total number of children who benefit from targeted subsidies within the ACS, it is estimated that approximately 21% will benefit from the maximum subsidy rates available within the scheme, which will be awarded to families with net incomes below €22,700 per annum. The maximum subsidy rates will vary by the age of the child, and will range from €5.11 per hour for children less than 1 year old to €3.76 per hour for school-age children. The maximum subsidy available for any child under the scheme will be €5.11 per hour. The minimum subsidy under the targeted portion of the scheme for children aged between 6 months and 3 years will be €0.50 per hour. This minimum subsidy-rate will apply to families with a net income of €47,500 or above per annum.

The minimum subsidy-rate under the targeted portion of the ACS is set to be the same as the universal subsidy-rate. If the universal subsidy-rate were raised, the minimum subsidy-rate under the targeted portion of the scheme would therefore rise by the same amount. For example, whereas it is currently proposed that the universal subsidy-rate for 2 year olds will be €0.50 per hour and the targeted subsidy-rate for 2 year olds will range from €0.50 per hour up to €4.18 per hour, if the universal subsidy-rate were raised to €3 per hour then the targeted subsidy-rate for 2 year olds would range from €3 per hour up to €4.18 per hour. Raising the level of the universal subsidy would therefore not create any incentive for a parent to switch from receiving a targeted subsidy to receiving a universal subsidy.

Increasing the universal subsidy-rate (as well as the resulting increase in targeted subsidy-rates described above) would, however, lead to a likely increase in the demand for childcare, because it would reduce the net fees paid by parents. Such an increase in subsidy-rates would therefore increase the expected number of beneficiaries of both the universal and targeted portions of the scheme.

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