Anne Rabbitte (Galway East, Fianna Fail)
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324. To ask the Minister for Children and Youth Affairs the households in receipt of subsidies under the affordable childcare scheme by gross income bracket (details supplied). [17203/18]

Katherine Zappone (Dublin South West, Independent)
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Under the Affordable Childcare Scheme, a family will be able to benefit from either a universal or a targeted subsidy. The basis for determining the level of targeted subsidy will be a family's net income, rather than gross income. Given the variation in tax situations between families, it is therefore not possible to state definitively the subsidy that will be awarded to a family with a given gross income, nor is it possible to provide detailed forecasts of the number of families that will receive subsidies under the Scheme by gross income bracket.

Basing the level of subsidy on a family's net income rather than their gross income provides a fairer reflection of the resources available to a family, as well as ensuring an equitable approach as regards the assessment of income that is taxable and income that is not taxable. Basing the income assessment on net income also reduces the risk of high effective marginal tax rates as subsidies are withdrawn in line with increasing income. As such, the approach is supportive of equity and labour market activation policy objectives and should ensure that the scheme is helpful to working families on low to moderate incomes.

The Regulatory Impact Assessment of the scheme included analysis by the ESRI of the impact of the scheme on families at different points in the income distribution. The table, which is extracted from the Regulatory Impact Assessment and attached as part of this answer, shows the impact of the scheme by income decile, demonstrating that the benefits of the scheme will primarily go to those in the lower half of the income distribution, but that the universal element of the scheme will give some benefits to families at all levels of the distribution. (Please refer to the attached document.)

Finally, some examples of the targeted subsidies for which different families on different net incomes will qualify are set out below.

Affordable Childcare Scheme Case Studies

(all based on illustrative example fees of €4.80 per hour for 1 year olds, €4.60 per hour for 2 year olds, and €4.40 per hour for school-age children)

A.A lone parent on net annual income of €22,700, with one child aged 2 years and in need of 40 hours of childcare per week, will qualify for a weekly subsidy of €167 and might be expected to have a corresponding co-payment of €17.

B.A family with a net annual income of €25,000, with two children aged 1 and 2.5 years and in need of 25 hours of childcare per week, will qualify for a weekly subsidy of €214 and might be expected to have a co-payment of €21.

C.A family with a net annual income of €35,000, with two children aged 1 and 2.5 years and in need of 25 hours of childcare per week, will qualify for a weekly subsidy of €149 and might be expected to have a co-payment of €86.

D.A family with a net annual income of €47,500, with two children aged 2 years (40 hours childcare per week) and 5 years (17 hours out-of-school care per week) will qualify for a weekly subsidy of €52 and may have a co-payment of €207.

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