Norma Foley (Kerry, Fianna Fail)
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I can confirm that officials in my Department have acknowledged receipt of correspondence from the service provider in question, and that they are in the process of responding to the provider.

The State is providing Core Funding to promote the interests of children and their families and workers in a privately operated sector.

In the 2025/2026 programme year a new Core Funding element, the Staff Funding Additional Contribution, has been introduced to centre-based services to facilitate the distribution of funding that was ringfenced for staff pay and conditions in Budget 2025. The Staff Funding Additional Contribution is intended to support early learning and childcare services to meet the increased minimum rates of pay in the sector as a result of new Employment Regulation Orders (EROs) negotiated by the independent Joint Labour Committee.

The EROs provide for increases in new minimum hourly rates of pay for the following staff:

• Early Years Educators and School Age Childcare (SAC) Practitioners - from €13.65 to €15.00 per hour;
• Early Years Lead Educators (Room Leaders) and School Age Childcare (SAC) Coordinators – from €14.70 to €16.00 per hour;
• Early Years Graduate Lead Educators (Room Leaders) and Graduate School Age Childcare (SAC) Coordinators – from €16.28 to €17.50 per hour;
• Deputy/Assistant Manager – from €16.49 to €18.00 per hour;
• Centre Manager - from €17.33 to €19.00 per hour;
• Graduate Centre Manager from €18.11 to €20.25 per hour.

The EROs do not apply to administrative staff, kitchen staff, and other ancillary workers.

The calculation of the Staff Funding Additional Contribution 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. For example, a service offering between 12 and 22 places for the Early Childhood Care and Education programme must always have two staff members in that session at a minimum to comply with regulations. For such a session, the minimum staffing hours would be 1,140 hours (2 staff members for 15 contact hours a week for 38 weeks per year).

Multiple methods for distributing this funding to individual services were modelled and explored, and basing the distribution on minimum staffing hours was selected as the one which most efficiently supports as many services as possible in meeting increased staff pay costs as a result of updated Employment Regulations Orders. That is, linking the Staff Funding Additional Contribution to minimum staffing hours is the approach where the greatest number of services have the full costs of modelled pay increases met by the funding.

Where extra-ratio 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. Additional capitation, provided through the Access and Inclusion Model (AIM), increased by 10 percent on 13 October to match the average 10 percent increase in the minimum rates of pay provided for in the new Employment Regulation Order. 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 Staff Funding Additional Contribution – including linking the Staff Funding Additional Contribution 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 at: earlyyearshive.ncs.gov.ie/downloads/download-corefunding/

The calculation per service reflects that the funding available for graduate-led provision for the previous three years can, and should, be facilitating higher rates of pay for graduate leaders in the sector. For this reason, room hours attracting a graduate lead educator premium under Core Funding are not eligible for the additional funding from the SFAC.

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 €45 million to support the outcomes of negotiations to improve wages for staff in the sector.

Core Funding is a supply-side grant and therefore designed to account for non-contact time, training, and flexibility. The contribution towards staff pay and conditions under Core Funding takes account of both contact time and non-contact time.

With regard to the Scheme’s fee management system, a cap on fees, which was introduced for First-Time Partner Services in Year 3, has been reduced and extended to all new and existing Partner Services in Year 4. Under these new fee caps, the fee for a full day place – of between 40-50 hours per week, the most common full day care operating hours – can be charged at no more than €295 per week (before State subsidies under the National Childcare Scheme (NCS) and the ECCE programme are deducted), with a fee cap of €354 for more than 50 hours of care.

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, ameliorating disparity in the market by placing a ceiling on the fees that can be charged by services while in receipt of Core Funding.

Further improvements are planned for the year ahead, with €20.2 million in brand new funding secured in Budget 2026 to support providers in adhering to Core Funding fee management conditions, including reductions in the maximum fee caps in the 2026/2027 programme year. This will guarantee that Core Funding’s monetary protections will continue to be passed on to families while ensuring sustainability and stability for the sector.

Within the 2025/26 Core Funding contract, the Department also committed to a new Fee Increase Assessment type exercise. The details of this undertaking are being developed by the Department, with the aim of identifying and supporting those services whose fees remain at very low levels.

As Core Funding is an optional scheme, this service has the autonomy and business freedom to choose to withdraw from Core Funding, even though this will result in the loss of significant financial support it offers them and the substantial benefits and certainty it brings to the families accessing the services.

However, the Department has made changes to improve the sustainability of providers through, for example, targeted measures for small and sessional services, and a fee increase assessment process for services with fees frozen at unsustainably low rates last year. Partner Services facing sustainability concerns can also avail of supports through the Department’s established case management process, through which local City and County Childcare Committees and Pobal work together to assess and provide support including financial support to services experiencing difficulties.

All services have been encouraged to avail of these supports as an alternative to withdrawing from Core Funding and removing the benefit of Core Funding to children and their families.

As of 28 October, 92% of eligible providers have signed up to the fourth year of Core Funding, which equates to over 4,500 services and an increase of over 5% on this point in time last year. Core Funding remains open to all Tusla-registered providers, subject to their agreement to the terms and conditions of the Core Funding Agreement.