Sunday 22 July 2018

Explainer: Who gets the childcare subsidy top-up and how does it happen?

Katherine Zappone Picture: Tom Burke
Katherine Zappone Picture: Tom Burke
Kevin Doyle

Kevin Doyle

Children's Minister Katherine Zappone is demanding an increase in the new childcare subsidy for parents from Budget 2018.

The minister has sought money to increase the new childcare subsidy which launched this week, as well as extra funding for social workers.

Parents are entitled to a subsidy worth €80 per month for each child aged between six months and three years who attends a registered childcare provider. Fine Gael is understood to favour increasing this universal payment by €15-€20 a month, but Ms Zappone is more focused on increasing targeted payments for families with incomes up to €47,000.

It is understood she has formally asked the Department of Finance for a total budget of €1.6bn next year, up from €1.3bn in 2017.

Here is everything you need to know about who is getting the money and how much is it?

Who is entitled to the universal childcare subsidy?

It is a non-means tested payment so all children between six months and the point at which they become eligible forthe free pre-school programme (around the age of three) can benefit if they are in registered childcare.

What does registered childcare mean?

All childcare services in Ireland are compelled to register with Tusla, the Child and Family Agency. This ensures they are subject to regulation and inspection. Some childminders are also registered and can participate in the scheme. In cases where grandparents mind children but haven’t formally registered the subsidy will not be available.

Where do I apply?

There is no application form. Parents need to supply their name, PPSNs and date of birth and those of their child to their service provider.

So how much is the subsidy?

Full-time (five hours or more a day) - €20.

Part-time (3.31 to five hours) - €10.

Sessional (2.16 to 3.3 hours) - €7.

Half-sessional (1 to 2.15 hours) - €3.50.

The subsidy is available on a prorata basis if a child is only availing of a service for part of the week.

So who gets the money and how much?

The subsidy is paid directly to the childcare provider. They should then reduce your bill by the equivalent amount. For example, if you pay €170 a week, the charge should drop to €150.

Is the money paid during holiday periods?

No, the subsidy is only paid for weeks when the childcare facility is open and your child is attending.

What if my childcare provider puts up their fees?

This is a concern. The minister has promised to monitor the situation and take action if there is evidence that childcare providers are taking advantage of the scheme.

Is there anything extra for low income families?

Yes. There is also a targeted initiative where struggling parents can receive up to €145 per week. The amount will depend on how much childcare you use, and what funding you are eligible for. It can be claimed for children up to 15 years old. 

What's happening next?

However, Ms Zappone could be on a collision course with Finance Minister Paschal Donohoe as the amount being sought is equal to the total funds available for new spending and tax cuts next year.

The Irish Independent understands the two ministers met in recent weeks to set out their starting positions for the negotiations.

"Either childcare is a priority or it's not. The Department of Children will not be low in the pecking order when it comes to budget talks," a source said.

Mr Donohoe is already coming under pressure to increase the old-age pension by €5, at a cost of €148m.

And Taoiseach Leo Varadkar has promised to "find some space to have a tax package to reduce taxes on middle Ireland".

However, Ms Zappone is understood to have argued Ireland has one of the most expensive childcare systems in the world as a result of years of under-investment.

She will tell colleagues that in order to have "accessible, affordable, quality childcare" then consistent increases to funding will have to be made annually.

"The minister is ready for tough negotiations," a source said.

Have applications begun?

The Affordable Childcare Scheme, which was a centrepiece of last year's budget, began accepting applications yesterday - with almost 200 forms returned per hour. Up to 70,000 children will benefit in the coming months.

Speaking in Canada yesterday, Mr Varadkar said the Government will have to decide on budget priorities.

"It is not possible in any one budget to do everything you would like to do, or even everything you should do, because the more important thing we have to do is balance the books, and it is our intention to balance the books next year and reduce the debt, and while that might not be politically popular in the short term, it's absolutely the right thing to do in the longer term for our country.

"The budget is not yet decided and we will, of course, have to prioritise," Mr Varadkar said.

Currently Ms Zappone's department spends €466m on 'Early Years' investment but wants "something north of €600m".

"That seems like a significant increase but we need to get to €1.2bn if Ireland is to reach the OECD average," a source said.

Among the proposals submitted by Ms Zappone is a funding request to increase capital grants for providers. She also asked for an extra €5m to support youth organisations such as the scouts and Foróige. She received a similar increase last year but argues that this "just reversed cuts from previous years". Her budget application adds that her department is striving to make Tusla, the Child and Family Agency, a truly independent body.

Irish Independent

Today's news headlines, directly to your inbox every morning.

Also in this section