Kathleen Funchion (Carlow-Kilkenny, Sinn Fein)
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711. To ask the Minister for Children and Youth Affairs the estimated additional cost in 2019 of increasing the universal minimum subsidy across the affordable childcare scheme if the minimum targeted subsidy is increased so as never to be below the universal subsidy, in 50 cent intervals up to an additional €4.50 reaching €5.00, assuming a start date of September 2020; the estimated cost for a full year; and the number of children that would benefit. [18229/20]

Roderic O'Gorman (Dublin West, Green Party)
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The table summarises the estimated ascending costs within the scenario described where the universal minimum subsidy is increased in 50 cent intervals up to €5.00 across the National Childcare Scheme, assuming the minimum targeted subsidy is increased so as never to be below the universal subsidy. September to December 2020 and January to December 2021 costs are provided.

The cost estimates are arrived at by:

- establishing the number of families with children under 15 years by income bracket (data supplied by CSO) and

- profiling these families by reference to the age of their children and

- estimating the proportion of children in each income bracket and age range using centre-based care and

- calculating estimated subsidy rates based on income levels and age profile and

- applying estimates of the average hours used by age group for term time and non-term time.

The scheme’s cost model is based on key assumptions around the preferences and behaviours of parents relating to working hours and childcare choice, rates of growth in demand, and certain metrics are extrapolated from available data. As such, all estimates remain heavily caveated insofar as the scheme represents a considerable departure from existing schemes and this renders estimates inherently challenging.

It is particularly difficult to estimate the behavioural changes that will result from significant increases in the level of subsidy available. The greater the increase in subsidy, the less reliable are the estimates. It is therefore possible that the total costs – and numbers of children benefiting – may be significantly greater than indicated in the table below, especially for the larger increases in subsidy rates.

It should be noted that the figures in the table for the number of children benefiting relate only to children whose parents claim the universal subsidy. As increases in universal subsidies automatically result in increases in targeted subsidies for most or all beneficiaries of targeted subsidies, a larger number of children would benefit whose parents claim targeted subsidies.

People who qualify for enhanced hours are always better off on targeted subsidies, so people with children who qualify for the universal rate will receive higher targeted subsides.

With the significant level of rate increases costed above, the volume of applicants could increase in large numbers, hence, annual review and re-costing will be required as investment increases.