Written answers

Tuesday, 8 December 2020

Department of Children and Youth Affairs

Childcare Costs

Photo of Eoghan MurphyEoghan Murphy (Dublin Bay South, Fine Gael)
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443. To ask the Minister for Children and Youth Affairs if he will examine information (details supplied) regarding childcare costs; and his views on the figures. [41224/20]

Photo of Roderic O'GormanRoderic O'Gorman (Dublin West, Green Party)
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The introduction of the National Childcare Scheme (NCS) in late 2019 was a landmark moment for making high quality childcare more affordable and accessible to families in Ireland. The NCS is designed to be highly inclusive and to meet the needs of those families who need it the most. The NCS is based on the principle of progressive universalism and has regard to the best interests of children.

By making this fundamental shift away from subsidies grounded in medical card and social protection entitlements, and by tangibly reducing the cost of quality childcare for thousands of families, the NCS aims to improve children’s outcomes, improve labour market participation and reduce child poverty. It is a central policy component of the NCS to poverty proof and assist people in exiting the poverty trap.

The NCS includes two types of financial subsidies towards the cost of quality childcare:

- A universal subsidy payable for children aged between 24 weeks and 36 months who are availing of childcare from an approved childcare provider. The subsidy rate is €0.50 per hour and covers a maximum of up to 45 hours per week. It’s payable for children older than 36 months who do not yet qualify for the Early Childhood Care and Education Programme (ECCE). This subsidy is not means-tested and is available to all qualifying families at any income level.

- An income-related subsidy payable for children aged from 24 weeks to 15 years who are availing of childcare from an approved childcare provider. The level of subsidy paid for the child is determined by the family’s reckonable income (gross income minus tax, other deductibles and any applicable multiple children discount). The reckonable income must be between €26,000 and €60,000. The enhanced hours available are up to a maximum of 45 hours per week and the standard hours available are up to a maximum of 20 hours per week. The NCS acknowledges that childcare needs differ widely across families, offering subsidies at an hourly rate allowing for flexible childcare arrangements to be made based on parental needs. 

Under the NCS higher subsidies are awarded to families with younger children, to reflect the higher cost of providing childcare for younger children because of the higher adult-child ratios required by the Early Years Regulations. Subsidies taper downwards from a maximum of €5.10 per hour for children between 6 months and 1 year, to a maximum of €3.75 for school aged children. The number of hours a child is eligible for depends on whether the parent is engaged in work, training or study.

Please note that in the examples provided by the Deputy insufficient particulars were supplied, including the child’s age/education stage, the net income of the family and the hours of childcare required.These criteria affect the level of subsidy that can be allocated to an applicant. The assumptions required to finalise an estimate are noted in the examples below.

Where the Deputy notes “person”, we assume this to mean “household” where all assessable individuals are in work or study. That is we assume the noted income is for the entire household.

There are also many variables in the calculation of net income. We have estimated a net income to enable the calculations as noted below.

Example 1: In the case of a household with one child aged 2 and with household earnings of approx. €30,000 gross (assume €27,000 net), the applicant would receive a weekly subsidy of €190 for 45 hours childcare per week.

Example 2: In the case of a household with earnings of €30,000 gross (assume €27,000 net) with two children - a 7 year old (in first class) and an 11 month old, the applicant would receive a weekly subsidy of €297 during term and time and €398 out of term for 45 hours childcare.

Example 3: In the case of a household with earnings of €40,000 gross (assume €34,000 net) with a 3 year old and 5 year old child, the applicant would receive a weekly subsidy of €195 during term time and €327 out of term for 45 hours childcare. To note the family would receive an additional 15 hours free childcare per week during term time whilst the 3 year old was in the ECCE scheme.

Example 4: In the case of a household on a wage of 80,000 gross (€57,000 net) with three children - a child aged 10 (in fifth class), a 7 year old (in first class) and a 2 year old, the applicant would receive a weekly subsidy of €134 during term time and €197 out of term time for 45 hours childcare per week.

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