Kathleen Funchion (Carlow-Kilkenny, Sinn Fein)
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713. To ask the Minister for Children, Equality, Disability, Integration and Youth the estimated first- and full-year cost of increasing the affordable childcare subsidy for children under three years of age by €1 per hour; and if he will make a statement on the matter. [24958/23]

Roderic O'Gorman (Dublin West, Green Party)
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It is assumed the Deputy is referring to an increase in the income assessed rates for under 3 year olds under the National Childcare Scheme (NCS). Income Assessed Subsidies are available to families with children aged between 24 weeks and 15 years. This subsidy is means tested and is calculated based on individual circumstances. The rate varies depending on the level of family income, the child’s age and educational stage, and the number of children in the family.

Currently the maximum income assessed subsidy for children age 24 weeks to 12 months is €5.10 per hour and for children age 12 months to 35 months it is €4.35 per hour.

At Budget time I allocated a total of €358 million under the National Childcare Scheme (NCS) for 2023. This figure is based on an additional €121 million being made available as a result of the estimated full year costs of a number of amendments to the Scheme:

• The removal of the practice of deducting hours spent in school pre-school or school from overall NCS hours reward as of May 2022.

• The increase in the upper age eligibility for the NCS universal subsidy from 3 years to all children under 15 years as of August 2022.

• An increase in the NCS minimum subsidy from €0.50 to €1.40 as of 2 January 2023.

Given the recent nature of these changes, full year data is not available on claimants under the Scheme on which to provide an exact cost for the Deputy's proposed change.

Using the ESRI SWITCH model, my officials have been able to simulate a €1 increase in the maximum income assessed subsidy for under 3s to generate a percentage increase in the full year costs of NCS. These changes are then applied to the current expenditure estimates for 2023.

The proposed changes are estimated to result in a 3 per cent increase in the cost of the scheme, which based on the allocation of €358 million for the scheme would mean an additional cost of €11 million per annum.

These estimates come with a number of caveats. Firstly, the ultimate impact of the changes from Budget 23 are yet to fully realised and as such extensions to the scheme are based on estimates. In addition, these costing are on the basis of a static system; that is, the model assumes that the level of usage of eligible early learning and childcare remains static. Any changes to subsidies may create a change in behaviours in families, for example, women returning to workforce and using formal early and childcare for the first time