Marie Sherlock (Dublin Central, Labour)
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399. To ask the Minister for Children, Disability and Equality when exactly early years services will receive the additional supports committed to them on foot of the reduction in the fee cap from 1 September 2025; and if such support will be backdated to 1 September. [52809/25]

Norma Foley (Kerry, Fianna Fail)
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In June, I confirmed the introduction of maximum fee caps for all Partner Services in Core Funding from September 2025. These new maximum fee caps will place a limit on the fees that can be charged across all types of provision. This will reduce costs for families who are facing the highest fees across the country, while promoting fairness in the market by addressing fee income disparity.

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 allocation has since risen to over €390 million in year 4, which is inclusive of €45 million in State funding to support services to meet costs of increased minimum rates of pay in the sector. This ring-fenced funding will be made available to services once the new rates, proposed by the Early Years Services Joint Labour Committee, are approved and the new Employment Regulation Orders (EROs) are given effect.

The Department has no control over the process by which EROs are given effect, though officials are hopeful that this will occur in the coming weeks, and when the EROs are in effect the associated funding will flow.

Fee caps were first introduced in September 2024, applying initially only to First-Time Partner Services, meaning services that were contracting to the scheme for the first time in year 3. It was clearly signalled in the July 2024 announcement of fee caps on First-Time Partner Services and in the 2024/2025 Core Funding Partner Service Funding Agreement that fee caps would apply to all Partner Services from September 2025.

Under these new fee caps for year 4, the maximum fee for a full day place – of between 40-50 hours per week, the most common full day care operating hours – can be no more than €295 per week (before State subsidies under the National Childcare Scheme and the ECCE programme are deducted), which remains significantly (49.7%) higher than the average fee for a full day place which is €197. Any fee which is impacted by the fee caps will still be significantly higher than the average fee, with this applying across all Fee Bands.

Approximately 10% of services will have at least one fee impacted by the fee caps, however it should be noted that in most cases impact is clustered around the lower Fee Bands A-C, which are typically not primary income drivers in an early years service. The fee freeze will remain in place for all Partner Services with fees that fall below the caps.

The new maximum fee cap and increased State investment are important steps towards the Government’s commitment to progressively reduce the cost of early learning and childcare to €200 per month per child during the lifetime of the government.

Supports are available from the Department where a service is experiencing financial difficulty or has concerns about their viability, accessed through Pobal and local CCC. Any service who would like to avail of advice or supports on a concern regarding their sustainability, is encouraged to reach out to their local CCC. Contact details for their local CCC can be found at www.myccc.ie.