Childcare payment for under-threes and a subsidy for low-income families
THIS year's budget has introduced "radical" new childcare supports for families.
Children's Minister Katherine Zappone has secured funding for a universal childcare payment for children under three, and a subsidised childcare scheme for lower-income families.
The universal scheme applies to all families who have a household income of less than €47,500, if there is just one child. This threshold rises to €51,300 for a household with two children under 15 and €55,100 for a family with three.
The scheme is payable for children aged between six months and three years, which the minister has said is the most expensive period for childcare.
It will be paid on a pro-rata basis of €0.50 per hour (to a maximum of 40 hours).
This means families with a child under three in childcare for 40 hours a week will get a subsidy of €80 per month.
It is payable only to childcare providers who are registered with the Child and Family Agency Tusla, including childminders who are registered providers.
The payments will be made directly to the crèche, and the Department of Children and Youth Affairs hopes this will ensure quality services.
Funding has been provided to develop an IT system which will allow parents to log on and fill out their details, including income and number of children. They will then be able to see a list of childcare providers in their area.
What parents will be left to pay will depend on the fees charged by their crèche or after-school service.
A review of the cost of childcare is due to be carried out shortly, but when asked if the new funding would cause providers to drive up their fees, Ms Zappone said it would be a "challenge".
"Maybe this will mean childcare providers ultimately will want to raise their fees... we don't think so initially," she said.
The percentage of childcare costs that this will cover will vary widely between cities and rural areas, where demand can often push up the cost of childcare.
Ms Zappone said that the review of the cost of childcare may look at linking the payments to geography.
Meanwhile, the second childcare support that was included in this year's Budget is designed to pay towards the childcare costs for lower-income families for all children up to 15 years of age.
The subsidies for childcare which will come on stream in September 2017 are weighted towards lower-income families on a sliding scale.
The subsidies are available for all children aged between six months and 15 years of age.
An hourly subsidy rate will be available for people which will be based on the age of the child being cared for and the income after tax of their parent(s).
Families with a net income of €22,700 will benefit from the highest rate of subsidies per hour. These are:
- €5.38 for a child under one
- €4.60 for a child aged 1-2
- €4.40 for a child aged 2-3
- €4.16 for a child aged 3-5
- €3.96 for a school-aged child
Further details on the scale will not be available for a number of weeks.
A memo is due to be brought to Cabinet which will outline the subsidy rates for families who earn between €22,700 and the threshold of €47,500.
At the moment, using the maximum subsidies available, a low-income family with a two-year-old in childcare will be eligible for a subsidy of €176 per week.
The Department has suggested that this will leave the family with a bill of just €4 per week, but that is based on an "average fee" of €4.50.