Roderic O'Gorman (Dublin West, Green Party)
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The National Childcare Scheme (NCS) is a subsidy provided to help parents to meet the cost of childcare and allow children to access Early Learning and School Age Childcare. The subsidy is progressive and depends on a number of factors including the age of the child, the income of the household and the number of children in the family. Those with the lowest incomes receive the highest subsidies. The subsidy is subtracted from the fee and the balance (if the fee is not entirely offset) is then charged to the parents. These subsidies can be as much as €229.50 per week.

I understand that the Deputy has specified that she is seeking data in relation to the income assessed awards under the National Childcare Scheme. The table below shows the number of unique children with at least one successful claim (i.e., eligible for payment), the total value of successful claims and the average value of successful claims per child in each year since 2020.

The figures presented above refer to successful claims under income assessed applications from each period with reckonable income of up to €60,000. For this query, the value of successful claims was used as an indicator of cost of the NCS in each year rather than the total value paid to providers in each year. This was due to two main reasons. Firstly, not all claims from a given year will be paid for in that same year. Secondly, many factors affect the value of each payment to providers, therefore the value cannot be linked back to specific children. For these reasons, the value of successful claims is the most accurate metric for the cost of the NCS relating to a specific period of time, and for the average cost of the Scheme per child.

A successful claim is a weekly claim that has become eligible for payment following submission of attendance returns by the service provider and parental confirmation (where applicable).The yearly breakdown is based on the start date of each weekly claim. The 2024 figures relate to successful claims for weeks up to 14th April that have become eligible for payment by the same date. The total number of children, the total value of claims and the average value claimed in the year per child will increase as the year progresses.

It is important to note that the hourly subsidy awarded to each family under the income-assessed scheme varies depending upon a number of factors including the age and number of their children, and their household's reckonable income. This award can then be used to off-set the cost of up to 45 hours of care a week, but the number of hours used is a matter for the individual family and their provider. This variability in family claims should be borne in mind when considering the figures above.

Roderic O'Gorman (Dublin West, Green Party)
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The Deputy has requested the savings to the Exchequer through reducing the average fees using the National Childcare Scheme (NCS). It should be noted that the NCS reduces out of pocket costs, rather than reduces fees, at a cost of the Exchequer.

My Department does not hold individualised fee data for parents as these are local agreements between parents and providers; instead a reduction in the average out of pocket cost to parents is examined using data from Pobal on average weekly fees across the country.

To achieve the desired reductions in out of pocket costs, increases in the NCS minimum (universal) subsidy were used. Assuming a 45-hour week for all children, a new hourly minimum (universal) subsidy of €1.43 was derived to effect a 1% reduction in out of pocket costs.

The ESRI SWITCH model was used to estimate the cost of this increase to the minimum (universal) subsidy, the estimate from SWITCH was then applied to the Department's baseline cost of the NCS for 2024. Using this method, the cost of this change was estimated at €4.13 million.

As fees can vary from service to service and depending on parent’s usage, impact estimates must be made as an average of the overall parental financial contribution to fees for their early learning and childcare.

The impact of this change will also vary based on the income level of the applicant. Parents on the maximum subsidies under the income assessed subsidy, that is those on annual income of €26,000 and below will see no change in their fee, as they are already in receipt of the highest available subsidy. For remaining parents, with income above €26,000 under the income assessed subsidy, reductions in fees will vary according to income levels, with those currently in receipt of the lowest subsidies benefiting the most.

This estimate comes with some important caveats. Firstly, the above costing is based on the NCS as it operates currently and the subsidy rates as time of this PQ being asked. As part of Budget 2024 I announced an increase to the NCS universal subsidy from €1.40 per hour to €2.14 and an increase in the NCS sponsorship rate for children over 1 to €5.30 per hour from September 2024. As these are not yet implemented, the impact of these changes have not been factored into the above costing.

Finally, the costing is made 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 learning and childcare for the first time.