I am pleased to have the opportunity to introduce the Childcare Support Bill 2017 to the Seanad. In March, the Bill completed its passage through the Dáil, following positive and constructive engagement with Deputies. There was cross-party support for the Bill and cross-party collaboration on a number of amendments which have strengthened the Bill and resulted in the text we now have before us. I look forward to working with Senators to examine the Bill further over the coming weeks.
The cost of childcare places a huge financial burden on many families, especially on parents who are trying to get out of poverty, or who want to take up job opportunities or take part in education but who cannot afford to do so because of the financial barrier of childcare fees. The high cost of childcare is also a barrier to the participation of young children in high quality early care and education, which we know from international research can make a lasting difference to children’s life chances.
Making childcare more affordable for families will bring many benefits. It will improve outcomes for children. It will also support parents to transition from welfare to employment and support lifelong learning for parents. It will advance gender equality, supporting women's labour market participation and helping to close the gender pay gap. It will also help to tackle child poverty and support economic growth. These benefits are why I am so proud of the progress we have already made in making childcare more affordable, and why the Bill is so important.
The Bill provides the legislative underpinning for a new affordable childcare scheme, which will replace all existing targeted childcare subvention schemes with a single, streamlined scheme. It is a scheme that will provide the framework for sustainably increasing public investment in childcare over the years ahead. The scheme will make childcare more affordable for parents by providing subsidies which will be paid on the parents' behalf to their chosen registered childcare provider. The provider must use the subsidy to offset the fees it charges.
The scheme will provide income-related financial support, which targets support towards parents who face the greatest financial difficulty in affording childcare. It will also provide non-income related, or universal, financial support, which allows a level of support for all parents of children of a prescribed age who use registered childcare services. The Bill also allows for additional support for families where there is an identified need for childcare on the grounds of child development or child welfare. It names five statutory bodies that may make referrals for free or additional childcare support. This, for me, is one of the most important aspects of the Bill, intended to help ensure we can meet the needs of the most vulnerable children and of families that may be a long way from participation in the labour market and that would otherwise benefit from only limited childcare support.
The Bill marks the first time that any of our childcare funding schemes will have a statutory basis. The Bill is critical for good governance in a number of ways. It will establish clear eligibility and scheme rules, it will create clear procedures, including an appeals process, and it will ensure the Department and the scheme administrator have adequate powers to ensure that public funds are being used efficiently and to take action where public funds are misused. Crucially, the Bill will enable the introduction of a streamlined, automated income-assessment process, providing a statutory basis for data sharing between the scheme administrator, the Revenue Commissioners, and the Department of Employment Affairs and Social Protection. This new income assessment process will allow the targeting of childcare supports towards those with the greatest need, in particular families seeking to enter the labour market but that have a low or moderate level of income. It will also allow us to move away from the current reliance on social welfare payments and medical cards as the only means of assessing financial need for childcare. It will be quite monumental when we get to that point and will impact everyone positively, providers as well as families.
The IT-driven approach at the heart of the affordable childcare scheme will also improve administrative efficiency and streamline the application and registration procedures for parents and childcare service providers. My goal is the creation of a world-class system that is user-friendly for parents, efficient for childcare providers, and excellent value for money for the public Exchequer and society. While I am keen to introduce the scheme as soon as possible, the IT system required is complex and I want to be sure it is robust and long-lasting. The development of the IT system, which is being carried out in close co-operation with the office of the chief information officer, is well under way. A request for tenders for the IT development was published in January and the evaluation process is ongoing at present. Earlier delays regarding the IT system are, indeed, regrettable. However, the improvements I introduced last September involving the introduction of a universal childcare subsidy for all children under three years of age and increases of up to 50% in the value of existing childcare subsidies mean that more than 71,000 children and their families are already benefitting from increased childcare subsidies. These important measures allowed me to fast-track many of the benefits of the affordable childcare scheme without compromising on the rigour and time needed to develop and launch this landmark new scheme.
An important aspect of the Bill, and one that has so far been underestimated, is its importance for raising quality standards in childcare. We know that childcare must be of high quality if it is to improve outcomes for children. While the primary focus of the affordable childcare scheme is affordability, the approach embodied by the scheme reflects the international evidence that supply-side funding gives the Government greater leverage to improve quality standards than demand-side approaches such as tax credits. It does this in several ways. The Bill limits participation in the scheme to childcare providers registered with Tusla, including registered childminders, providing assurance that critical quality standards must be met by all providers in the scheme. All childcare providers who wish to participate in the scheme will have to sign a contract with the Department. Section 8 of the Bill allows quality conditions to be specified in the contract that are more rigorous than those required by the early years services regulations. The Bill allows for future development of the scheme, with section 13 allowing the possibility of quality-raising incentives to be built into the formula for determining how much funding the scheme provides. More broadly, the flexibility of the Bill allows us to change the subsidy rates over time, enabling the Government to adjust the scheme in response to the findings of the independent review of the cost of quality childcare, as well as in response to the ongoing professionalisation of the early years workforce.
If we are to support the move to a professional workforce with wages and working conditions that reflect the importance of the work carried out by early years educators, inevitably the cost of delivering childcare will rise over the years ahead. Subsidy rates will, therefore, also have to rise if childcare is to remain affordable to parents.
Finally, by requiring all participating childcare providers to register with Tusla, I am very aware of the historical anomaly that school-age childcare remains unregulated. To address this anomaly, I announced last December that I would introduce regulations later in 2018 in advance of the childcare scheme's introduction to enable school-age childcare services to register with Tusla and, thus, participate in the scheme. In the first instance, these new regulations will be limited to registration requirements. Work will then commence on the drafting of full regulations that will cover quality issues such as qualification requirements.
I turn to the Bill itself. Senators will recall that I published the heads of a Bill and general scheme in January 2017. In February 2017, the Oireachtas Joint Committee on Children and Youth Affairs carried out pre-legislative scrutiny. The recommendations made by the committee were very useful and have helped to shape the Bill that I am presenting today. During the Bill's passage through the Dáil, a number of important amendments were made. I greatly appreciate the positive contribution of Deputies from all parties who worked together with me on those amendments.
In setting out the main provisions of the Bill, I will briefly highlight some of the key amendments that have been made since the Bill was published. Section 1 provides definitions of key terms. In particular, it ties the definition of "childcare services provider" to the list of registered providers maintained by Tusla, the Child and Family Agency. Throughout the Bill, the term "childcare services provider" therefore includes registered childminders. The definition of "parent" in the Bill includes a person acting in loco parentis and, therefore, includes guardians.
Section 2 provides for the establishment of the scheme which will be funded out of moneys provided by the Oireachtas each year and states that the scheme will be operated by the scheme administrator. Sections 3 to 6, inclusive, provide for the appointment of the scheme administrator and describe its functions and governance arrangements. Section 6 allows for the scheme administrator to outsource certain functions while retaining responsibility for administration of the scheme.
Section 7 sets out the eligibility criteria for parents seeking to apply for financial support under the scheme. The residency requirements allow for applications not only from parents who are ordinarily resident in the State, but also from EU and EEA citizens who are not resident in the State and from other categories of parents who are formerly employed or self-employed in the State. However, financial support will be limited to childcare services registered under the Child Care Act 1991, and these must be located in the State. Where parents are separated, section 7 allows both parents to receive financial support, but each parent may only receive support for the days or times that he or she has care of the child. Section 8 limits participation in the scheme to "approved" childcare services providers, which must be registered with the Child and Family Agency and also have signed a contract with the Minister for Children and Youth Affairs to participate in the scheme. As such, I assure Senators that the wording of the Bill provides that registered childminders will be able to take part in the scheme.
Section 9 specifies the process by which parents may make applications for financial support, including the information they must provide. When applications are for income-related financial support, in most cases the income-data will be gathered through an automated process involving the Revenue Commissioners and the Department of Employment Affairs and Social Protection. Income data will be gathered with the consent of the applicant and on the basis of PPS numbers supplied by the applicant. The Bill allows for the maximum number of hours of income-related financial support to vary depending on the parents' participation in the labour market. As a result, section 10 requires employers, education and training providers to verify information provided by an applicant on his or her labour market status when asked to do so by the scheme administrator. Section 11 provides for the income-assessment process, which must use the definitions of "income" and "allowable deduction" in Schedule 1.
Section 12 specifies the information that the scheme administrator must provide to the applicant after determining the amount of financial support, if any, for which the applicant qualifies. It also stipulates that a determination may be valid for 12 months at most, after which the application must be renewed. Section 13 provides for the calculation by the scheme administrator of the amount of financial support for which an applicant qualifies and sets out the factors to which the Minister must have regard when making regulations on the calculation of financial support. Amendments made to section 13 in the Dáil require the Minister, when making regulations on the number of hours of childcare to be subsidised, to have regard to parents' availability to care for a child, and also to have regard to transition periods between work and study, namely, those brief but crucial bridging periods before a parent's employment, self-employment or study commences or after it ends.
Section 14 allows for additional support where there is an identified need for childcare on grounds of child development or child welfare. It builds on existing arrangements under the administrative schemes being replaced. Additional support may take the form of higher rates of payment, such as the provision of childcare at no cost to parents, or additional hours of financial support each week, or provision of financial support for children who would otherwise be too young or too old to participate in the scheme. This section allows for agreements between the Minister for Children and Youth Affairs and certain statutory bodies. These agreements will set out the procedures by which those statutory bodies may refer children for additional childcare support as well as the additional support to be provided. An amendment made to section 14 in the Dáil requires the Minister and statutory bodies, when making those agreements, to have regard to the objective of stability for children attending childcare services.
Schedule 2 lists the relevant statutory bodies and the purposes for which they may make referrals. An amendment to Schedule 2 of the Bill strengthened the wording regarding the purpose of referrals for childcare support from Tusla, which will be a key source of referrals for families in need of additional care. Section 15 provides for procedures relating to the payment of financial support to approved childcare service providers and for conditions to be prescribed in respect of those payments. Section 16 requires an applicant to notify the scheme administrator if he or she is no longer eligible for financial support under the scheme or if he or she ceases work or study. Section 17 allows for parents and childcare services providers to request reviews of decisions made by the scheme administrator. In cases where an application has been assessed through an automated process, a review allows a parent to request an administrative officer to examine the application. A review is the first stage of the appeals process. This section also allows the scheme administrator to carry out reviews on its own initiative, for instance to verify information provided by a parent or by a childcare service provider.
Sections 18 and 19 allow for the appointment of authorised officers who may enter the premises of childcare service providers in order to examine attendance records, financial records and other documents relevant to the scheme to ensure the proper use of public funds. Section 20 establishes the appeals process which follows completion of the review process under section 17. The Minister's consent is required for the appointment of appeals officers who will be required to be independent in the performance of their functions. Parents and childcare service providers will also have recourse to the Ombudsman and to the High Court on a point of law. Section 21 allows the scheme administrator to recover money from parents and from childcare services providers, both in cases of fraud or misrepresentation and in cases of overpayment.
Section 22 amends the Child Care Act 1991 to address issues arising from the regulation of school-age childcare which, as I stated earlier, will commence in 2018 in order to allow school-age providers to take part in the scheme from the outset. The amendments to the Child Care Act clarify the purpose of school-age childcare and ensure that the definition of "school-age service" covers services for children up to the age of 15. The amendments also set a limit on the number of school-age children for whom a childminder can care while remaining exempt from the requirement to register with Tusla. I stress that these amendments are an immediate necessity to enable the registration of school-age childcare services in advance of the introduction of the scheme.
However, at the same time, I will be advancing an action plan on childminding which I intend to publish in the year ahead. This plan will build on the recommendations of the working group on the childminding sector, which published its report in March. The action plan will set out reforms and supports to provide a pathway for a progressive increase in the number of registered childminders over the years ahead. This is consistent with my broader policy goal to continually drive quality improvement across the early years sector, including by supporting ever-growing numbers of childminders to come within the scope of regulation.
Section 23 amends the Social Welfare Consolidation Act 2005 to refer to the affordable childcare scheme as a “relevant purpose” for which specified bodies may share information on the basis of a PPS number. This amendment will allow the Department of Employment Affairs and Social Protection to transfer information on an applicant’s income to the scheme administrator on the basis of the PPS number provided by someone who applies for income-related financial support.
Section 24 allows for the sharing of data between the bodies named in Schedule 3 for specified purposes, which include assessing an applicant’s income, registering a child, making payments, verifying children’s attendance, and carrying out a review, an appeal or the prosecution of an offence.
Section 25 describes the regulation-making powers under the Act. Following an amendment made in the Dáil, section 26 requires a review of the scheme to begin 12 months after the first payments under the scheme are made.
Section 27 allows beneficiaries of the existing administrative schemes to continue receiving the same level of financial support for a transitional period after those schemes are replaced by the new scheme. This would arise in circumstances where existing beneficiaries choose not to move over to the new scheme.
Section 28 provides for expenses incurred by the Minister in the administration of the scheme to be paid out of moneys provided by the Oireachtas. Section 29 creates sanctions for persons guilty of offences under the Act. Section 30 allows commencement of different provisions of the Act at different times.
I look forward to hearing the views of the Members of the Seanad and to working with them to formulate the best possible legislation to help families to access affordable, quality childcare. I commend the Bill to the House.