Norma Foley (Kerry, Fianna Fail)
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I propose to take Questions Nos. 320 and 324 together.

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.

An allocation of €405.21 million for the Scheme was secured in Budget 2026. This is an increase of €51.97. million on the 2025 allocation of €353.23 million – representing a 15% year-on-year increase and a 56% increase over the 2022 allocation of €259 million.

A service’s Core Funding grant is designed to support the costs of:

• Staff pay and conditions, including contact and non-contact time, holiday pay, sick pay and other employer costs
• Administrative staff/time
• Non-staff overhead costs

Adherence to the Core Funding fee management system is a primary condition of receiving the significant State funding that is available through the Scheme. The fee management system requires compliance with a fee freeze and the maximum fee caps.

Fee caps were first introduced on First Time Partner Services, meaning new entrants to the Scheme, beginning in September 2024. As part of the announcement of these limited fee caps, it was clearly indicated that fee caps would apply to all Partner Services from September 2025. This was also called out in the 2024/2025 Partner Service Funding Agreement.

These new maximum fee cap on all Partner Services places a limit on the maximum fees that can be charged across all types of provision. Under these new maximum fee caps, the highest possible fees will be no more than €295 per week for a full day place of between 40-50 hours per week (the most common full day care operating hours) and a maximum fee of €354 per week for more than 50 hours of care.

It is important to note that these fees for parents are then reduced by State subsidies under the National Childcare Scheme and the free, universal two-year Early Childhood Care and Education (ECCE) preschool programme.

A parent being charged the maximum permissible fee of €295 per week (for the most common full day care option) would be entitled to receive the universal National Childcare Scheme subsidy of €96.30, meaning their own co-payment would be no more than €198.70 per week. Higher subsidies are available for many parents, depending on their level of income and the age and number of children in their family.

A maximum fee value applies to all six Fee Bands of the Common Fee Structure as of 1 September 2025. This will reduce the highest fees across the country in each Fee Band. This is an important step towards the reduction of childcare fees to €200 per month over the lifetime of this Government. Maximum fee caps represent a mechanism for addressing outlier fees, bringing the highest fees in the country closer to the average weekly fee for full day care of €197 and ameliorating disparity in the market.

When the maximum fees were set in the summer, 460 Partner Services (10%) were identified as having at least one fee option above the corresponding maximum fee. These services were required to reduce any affected fees from 1 September 2025 in order to continue to receive payments under Core Funding. As the fee caps were introduced to place limits on excessively high fees charged by services; while receiving State investment through Core Funding, no separate funding stream was set aside to support their implementation in year 4.

90% of Partner Services already charge far less than the maximum fee caps and are therefore unaffected. The majority of these services remain bound by the fee freeze, wherein they cannot increase their fees beyond the levels charged in September 2021, the increased investment in Core Funding is designed to offset any increases to costs services may experience.

The Department oversees a system of case management through which local City and County Childcare Committees (CCCs) assist Core Funding Partner Services. Supports can include help with cashflow, fee setting and completing and interpreting analysis of staff ratios, as well as more specialised advice and support appropriate to individual circumstances.