James O'Connor (Cork East, Fianna Fail)
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272. To ask the Minister for Children, Equality, Disability, Integration and Youth if he will examine the possibility of a higher subvention under a scheme (details supplied) for childcare providers offering baby services to assist them in meeting the 1:3 ratio required; if he will examine the possibility of allowing providers who have had their fees frozen, per requirement of their contract under core funding scheme, renegotiate their rates with his Department to ensure they are on a par with newer entrants to the scheme who are charging higher fees; and if he will make a statement on the matter. [38354/24]

Roderic O'Gorman (Dublin West, Green Party)
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The National Childcare Scheme (NCS) is applied to a preexisting fee thereby supporting families to access early learning and childcare through the offsetting of fees. The NCS income assessed subsidies are higher for younger children reflecting the differing costs of early learning and childcare. The current maximum subsidies by age are:

The introduction of Core Funding in 2022 brought a significant increase in investment for the sector, with €259 million of funding paid directly to services in year 1 of the scheme, of which €210.8 million was entirely new funding.

This funding, which increased by 11% (to €287 million) in year 2, will increase again by another 15% in year 3 (to €331 million).

The majority of Core Funding will still be distributed to services via the base rate, based on a service's staffed capacity - the operating hours, opening weeks and the age group of children for whom services are provided as well as number of places available.

A key priority for the Department in 2024 is to support improved accessibility, with a particular focus on the expansion in capacity for children under three years of age within Partner Services. The Base Rate under Core Funding allocates higher levels of funding to places for these ages to support services in meeting the higher costs associated with this type of provision.

Up to now, services availing of Core Funding have not been allowed to raise their fees above what was charged to parents on 30 September 2021 (or at the point of first signing up for Core Funding if the service did not exist on 30 September 2021).

The fee freeze will remain in place for the majority of these services for year 3 of Core Funding, though there are two new developments:

Services whose fees have been frozen at a level that may not be sufficient to sustain their business even with increased funding available through Core Funding, will have the opportunity to apply for a Fee Increase Assessment. Only services currently charging low fees (fees below the average in their county) will be eligible to apply and the onus will be on the provider to demonstrate a need for a fee increase. Any approved fee increases will not go above the increased universal NCS subsidy that a parent would be receiving for the full hours offered within the fee. This means that parents receiving the universal NCS subsidy for the full hours offered in these services will not face higher costs.

A cap on fees is being introduced for services joining Core Funding for the first time in the third year. A fee cap will apply to all services in Core Funding from September 2025. This change will improve affordability for parents, as very high fees will be reduced.