Róisín Shortall (Dublin North West, Social Democrats)
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593. To ask the Minister for Children and Youth Affairs to outline the changes in 2019 in the amount of benefit parents can enjoy under the universal element of the affordable childcare scheme. [42278/18]

Katherine Zappone (Dublin South West, Independent)
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In September 2017 I introduced a range of measures to lower the cost of childcare while the new Affordable Childcare Scheme was under development. These included raising the level of childcare subsidy available for families that need it most by up to 50% (from a maximum of €95 to €145 per week for children up to the age of fifteen). I also introduced a brand new universal subsidy of up to €1,040 per annum for children under three in registered childcare. Over the past year these measures have reached the families of more than 84,000 children.

In Budget 2019, rather than adjusting the existing schemes, which will continue to be available until the Affordable Childcare Scheme is in place, I announced changes to the income thresholds that will operate as part of the Affordable Childcare Scheme when it is introduced later next year.

Under the scheme’s original policy proposals, income-based subsidies would have been available to all families with a net annual income of up to €47,500. This threshold will now increase by 26% to cover all families with a net annual income of up to €60,000. The scheme’s lower income thresholds have also been adjusted, meaning that maximum subsidy rates will now be paid to all families with a net annual income of up to €26,000 (the previous proposed threshold stood at €22,700). These increased thresholds will mean that thousands more families will benefit from the new Affordable Childcare Scheme once launched at the end of 2019 and will see their childcare costs tangibly reduce.

It is my view that making these changes is a more progressive use of available resources than merely adjusting the universal element of the scheme. Because of these changes, an estimated additional 8,000 children will be eligible for the scheme for the first time. Another 8,000 will move from a universal subsidy to a higher targeted subsidy. 44,000 other children will continue to access a subsidy, 34,000 of whom will see increases to their subsidies.

The new measures ensure that families with, in some cases, a gross income of €100,000 will benefit from subsidies.

The increase in the lower net income threshold to €26,000 from €22,700 is important in terms of benefitting people at the lower end of the income spectrum. The measure ‘poverty proofs’ the scheme by ensuring that families at, or below, the relative income poverty line will benefit from the very highest subsidy rates under the scheme.

For those above the net income threshold of €60,000, but with a child under 3 in regulated childcare, the scheme will continue to make up to €1,040 per annum available.