Thomas Pringle (Donegal, Independent)
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157. To ask the Minister for Children, Equality, Disability, Integration and Youth the estimated first year 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. [24146/24]

Roderic O'Gorman (Dublin West, Green Party)
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There are two types of subsidies available under the National Childcare Scheme:

• Universal Subsidies are available to all families with children under 15 years old. This subsidy is not means tested and provides €1.40 per hour towards the cost of a registered childcare place for a maximum of 45 hours per week. This rate will be increased to €2.14 per hour from September 2024.
• Income Assessed Subsidies are available to families with children aged between 24 weeks and 15 years. This subsidy is means tested and will be calculated based on the applicants individual circumstances. The rate varies depending on level of family income, child’s age and educational stage, and the number of children in the family.

The maximum NCS income assessed subsidy for children under 3 are in the below table, along with the proposed increases.

Officials in my Department used the ESRI SWITCH model to estimate the quantum of these changes and applied to the Departments baseline cost of the NCS for 2024. Using this methodology it was estimated that the first year cost of this change would be €2.9m, the full year cost of this change was estimated at €8.78m.

The above estimates come with a number of caveats.

Firstly, it should be noted that due to the nature of the NCS income assessment, families on the maximum income assessed subsidy (i.e. those on the lowest income) would benefit the most from increases to the maximum income assessed subsidy. This effect would taper downward as applicants reached the higher income threshold for the Scheme (€60,000) however all families not at this threshold would benefit.

Additionally, the above costing is based on the NCS as it operates currently and it 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 extension of the NCS to a larger cohort of childminders from September 2024. As these are not yet implemented, the impact of these changes have not been factored into the above costing.

Lastly, 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.