Robert Troy (Longford-Westmeath, Fianna Fail)
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145. To ask the Minister for Children, Disability and Equality if she will clarify the elements of the recently announced core funding changes & employment regulation order in relation to the childcare sector; and the percentage of core funding announced which will be ringfenced for wage increases focusing on the level of training and experience. [57546/25]

Robert Troy (Longford-Westmeath, Fianna Fail)
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146. To ask the Minister for Children, Disability and Equality if she will clarify whether holes in funding have been identified in the community childcare sector as a result of the recently announced employment regulation order and the new round of core funding; if she will confirm if core funding will cover the entirety of the enforced wage increases across all community childcare settings; and, if not, if she will confirm the way in which these services will be supported further. [57547/25]

Norma Foley (Kerry, Fianna Fail)
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I propose to take Questions Nos. 145 and 146 together.

Budget 2026 sees an allocation of €405.45 million to Core Funding. This is an increase of €52.12 million on the 2025 allocation of €353.23 million – representing a 15% year-on-year increase. The additional funding allows for the continued implementation of the Core Funding scheme for the fourth programme year (September 2025 to August 2026) and continuing into the fifth programme year starting September 2026 with strengthened support.

The increases secured in Budget 2026 will translate into a record full-year cost of €437 million for the 2026/2027 programme year, an 11% increase on the current programme year. This is an unprecedented level of funding and will ensure that services can continue to operate within fee management conditions and new maximum fee cap thresholds. This will support the sustainability of the sector while maintaining Core Funding affordability measures for families. Full details of Core Funding 2026/2027 will be made available to the sector in 2026.

In the 2025/2026 programme year, a new pay element of the grant calculation, the Staff Funding Additional Contribution or SFAC, was introduced to centre-based Partner Services to facilitate the distribution of this ringfenced funding, for which purpose €45 million was secured in Budget 2025.

The calculation of the SFAC per service is linked to the staffing requirements set out by the regulations, and the minimum staffing hours required to operate a service’s staffed capacity.

Minimum staffing hours are the minimum contact hours that a service must staff in order to satisfy the regulatory adult to child ratios. Distributing SFAC allocations to services based on minimum staffing hours means that the significant funding ringfenced for staff pay can be spread across the entire sector rather than absorbed by staff hours in excess of those required to satisfy the regulations.

Where such staffing is required, alternative funding streams are in place to support services in meeting these costs. Level 7 funding of the Access and Inclusion Model pays for an extra-ratio staff member where there are children with additional needs in the room. Equal Start funding contributes towards extra-ratio staff members or non-contact time in services caring for high concentrations of children experiencing disadvantage.

The details of the SFAC – including linking the SFAC calculation to minimum staffing hours – were communicated to the sector in June 2025 in both the overview of Core Funding Year 4 and the Core Funding Partner Service Funding Agreement 2025/2026, which can both be found .

The SFAC was designed to support Core Funding Partner Service providers to meet the costs of increasing minimum pay rates as a result of new Employment Regulation Orders (EROs) negotiated by the independent Joint Labour Committee.

I acknowledge the important role the Joint Labour Committee and its members play in improving wages and working conditions in the Early Learning and Care and School-Age Childcare sector.

Although the Government is the primary funder of the sector, it is not the employer and cannot directly set wages or conditions. The Joint Labour Committee is the formal mechanism established by which employer and employee representatives can negotiate minimum pay rates for ELC and SAC services, which are set down in Employment Regulation Orders.

In line with the provisions of the Industrial Relations Acts, the Joint Labour Committee is independent in its functions, and neither I nor the Department have a statutory role in its processes.

As recently announced, the Minister of State for Employment, Small Business and Retail Alan Dillon has signed a new Employment Order for Early Years Educators and School-Age Practitioners. The Orders commenced on 13th October 2025. They provide for an average of 10% increase to minimum hourly rates of pay. It is estimated that 67% of those working in the sector will see their wages increase as a result of the new minimum pay rates.

Earlier in the year, I and officials from the Department met the Joint Labour Committee during their negotiations before they agreed recommendations on new minimum rates of pay. I outlined the Government’s continued support for the sector as a whole and, as outlined in the Programme for Government, for the Joint Labour Committee. Department officials provided substantial statistical data as requested by the Joint Labour Committee members including a detailed outline of how the ringfenced funding for staff wages would be dispersed. It is important to note that the Department is not privy to the total amount of monies available for Joint Labour Committee negotiations as there may be additional revenue streams beyond the Government's Core Funding allocation and the additional ringfenced funding to support the outcomes of negotiations to improve wages for staff in the sector.

My Department sees a role for both private and community in the childcare sector and accordingly it does not differentiate between community and private services in the eligibility/pre-requisites of services for Core Funding, nor in the calculation and distribution of Core Funding.

In addition to the increased level of Core Funding for year 4 of the scheme and in Budget 2026, there are wider financial supports available from the Department where a service is experiencing financial difficulty or has concerns about their viability, which can be accessed while remaining within Core Funding.

The Department offers Sustainability Funding to services where issue/s have been identified through the Case Management process that have the potential to have serious consequences for their viability. As part of the Case Management process, in which local City or County Childcare Committees (CCCs) assist services with issues and difficulties that arise, the CCC may refer Core Funding Partner Services facing difficulties to Pobal and the Department to be considered for Sustainability Funding.

Sustainability Funding is intended to prevent significant issues that threaten the viability of a service from occurring in first instance, and any service seeking these supports should contact their City or County Childcare Committee.